Decarbonising home heating at risk from weakened policies, think tank warns
The UK will need to import around 20% more gas from abroad to meet home heating demand if the Government fails to effectively implement policies to drive up heat pump installations, according to analysis.
The Energy and Climate Intelligence Unit (ECIU) found households could be left more reliant on foreign gas in the 2030s and therefore exposed to volatile prices – such as the peaks seen during the energy crisis in 2022 when Russia invaded Ukraine.
With a significant amount of the UK's carbon footprint coming from gas heating of homes, the think tank looked at two key Government policies that could boost demand for heat pumps – an electric-powered heating system.
It found they could displace around 300 terawatt hours of gas by 2035 in home heating – the equivalent needed to heat nine out of 10 (26 million) homes for a year, or gas contained within around 340 LNG tankers.
But the two policies – the clean heat market mechanism (CHMM) and the future homes standards (FHS) – have been beset by delays or softened by ministers over time, the researchers said.
The CHMM, which was delayed by the previous government, came into force on Tuesday, requiring boiler manufacturers to ensure 6% of their sales are heat pumps or face a fine per installation missed.
But the Labour Government reduced the charge from £3,000 to £500 for the first year to give manufacturers – who last year pushed back against what they called a 'boiler tax' – the time they need to scale up supply chains and said it will consult on charges for further years.
Meanwhile, the FHS will require new homes built in England to produce fewer carbon emissions than those built under current regulations, with heat pumps likely playing a key role.
The proposed regulations were first announced in 2019 but the final specifications, including an implementation date, have yet to be unveiled, with the Government saying it will do so this year.
The ECIU said the decreased CHMM fine may no longer result in the policy successfully reducing gas dependence and warned the FHS must require new builds to install heat pumps.
Otherwise, the UK will still have to rely on imported gas to meet demand, the group warned.
It cited the North Sea Transition Authority's estimates for the amount of gas that could be extracted from existing and future fields, saying even the maximum figures would not cover the projected increase in demand.
The UK has seen record numbers of heath pump installations in the last year, partly driven by the Government's boiler upgrade scheme, which provides £7,500 grant funding for households replacing their gas boilers.
But the think tank said pushback from the boiler and housebuilding sector could be putting progress at risk.
It comes after some manufacturers last year dubbed the policy a 'boiler tax' and said they would hike the price of boilers to cover the costs of any penalties incurred by failing to meet the required level of heat pump sales.
Then energy secretary Claire Coutinho condemned the move as 'price gouging' and asked the competition watchdog to investigate, but delayed the scheme's introduction a year regardless.
Elsewhere, it was reported boiler industry trade body the Energy and Utilities Alliance (EUA) lobbied against heat pumps while major housebuilders lobbied against previous new home standards which led to them being scrapped in 2016, and more recently against the FHS.
Lord Callanan, former minister for energy efficiency and green finance at the Energy Department (DESNZ), said: 'Corporate lobbying from the gas boiler industry and housebuilders against the rollout of heat pumps amounts to getting in the way of our national security.
'The industry's spreading of misinformation about heat pumps and scaremongering around a boiler tax that they themselves invented clearly resulted in the Government giving in and lowering the penalties for non-compliance.'
Jess Ralston, energy analyst at the ECIU, said: 'There's no two ways about it, we need to move away from gas boilers if we want to stop the rollercoaster of bill increases that are a result of our reliance on volatile gas prices and to avoid becoming ever more dependent on gas imports.'
The Energy Department, Housing Department and EUA have been contacted for comment.
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