Net Zero Strategy plays up renewable energy links to clean heat switch

The UK’s Net Zero Strategy has set out a vision for creating a carbon neutral nation able to generate clean heat from sources such as the North Sea. These ambitions will be backed by development of hydrogen production and carbon capture and storage systems to underpin the wider decarbonisation of business and the UK economy.

Among the broad commitments in the plan are a focus on more efficient homes and buildings and a shift away from using fossil fuels in the country’s power and heating systems.

Publication of the plan has followed on from the release this week of the delayed Heating and Buildings Strategy that has garnered a mixed reaction from the HVAC sector over its aims to deliver low carbon heat and energy.

Although the basic provisions of the plan have been welcomed, there is some concern from environmental groups that the UK’s heat strategy is not ambitious enough on legislating a set time for ending sales of natural gas boilers, as well as supporting building efficiency improvements.

The Net Zero Strategy meanwhile aims to prioritize what the government identifies as ‘no or low regrets actions’ that would include efficiency improvements. It said this would allow for a reduction in energy bills through a fabric-first approach to improving building thermal efficiency that would include insultation, draught-proofing and more efficient technologies.  No mention is made in the strategy of a successor to the short-lived Green Homes Grant that was launched in 2020 to subsidise heat pump and energy efficiency improvements. The grant was abruptly scrapped earlier this year due to concerns about its administration, with some funding continuing to be provided to local authorities to fund efficiency and low carbon heat projects.

Another key commitment will be to reduce electricity costs to expand reliance on a planned extension of the UK’s renewable energy generation capabilities over the next two decades.  HVAC and energy experts have argued that cheaper electric bills will be a major incentive for consumers to adopt heat pump technologies going forward.

Options to address electricity costs, which are higher than natural gas prices at present, could include shifting or rebalancing energy levies such as the Renewable Obligation or Feed-in Tariffs away from renewable power over the course of the 2020s.

The strategy stated, “This will include looking at options to expand carbon pricing and remove costs from electricity bills while ensuring that we continue to limit any impact on bills overall. We know that in the long run, green products are more efficient and cheaper, and we are putting fairness and affordability at the heart of our approach.”

“We will launch a Fairness and Affordability Call for Evidence on these options for energy levies and obligations to help rebalance electricity and gas prices and to support green choices, with a view to taking decisions in 2022.”

Other energy commitments with implications for low carbon heat include the Industrial Decarbonisation and Hydrogen Revenue Support (IDHRS) scheme. The project, valued up to £140m, is intended to support the production of 250MW of electrolytic hydrogen in 2023, alongside solutions for capturing and storing industrial carbon emissions.

Response to strategy

Parliament’s Environmental Audit Committee said the strategy showed promise in enabling industries to engage with decarbonisation. 

Committee Chair MP Philip Dunne said the body has continued to warn over the last 18 months about the need for strong demand signals to encourage investment in net zero carbon technologies and solutions.

He said, “There is every indication that this strategy, with its policies on electric vehicle manufacturing and charging, along with emphasis on carbon capture and storage, will indicate to the market that Net Zero Britain is an investible proposition.”

“The overarching strategy is one thing: the detail of how we deliver these objectives is critical.”

With the development of carbon capture and storage solutions underway, the committee said it would be holding hearings later this year on how they can contribute to national decarbonisation aims and where challenges may arise in meeting this aim.

Mr Dunne said, “The Committee’s work on mapping the path to net zero continues. We will be examining the detail of this substantial strategy in the coming weeks and months, and continuing our constructive dialogue with ministers and departments, as the policies outlined begin to take shape.”