Heating accounts for more than a third of the UK’s CO2 emissions, with 85% of homes heated by natural gas and just 5% using low-carbon alternatives. Although proposals to decarbonise heating are not in short supply, the UK Government has yet to make any firm decisions about which pathways it prefers.
Moving away from gas boilers to heat pumps is one solution.
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By GlobalData“If you burn gas in your boiler, you emit 205 grams of CO2-equivalent per kilowatt-hour,” says Jan Rosenow, director of European programmes at the Regulatory Assistance Project, a think tank dedicated to the clean energy transition. “Over the past decade, gas used to be quite clean compared to electricity, but now electricity has become so clean because of all the renewables, [that] using electricity makes a lot more sense than gas.”
A heat pump uses electricity to extract heat from the air, water or ground, providing between three and five units of heat (depending on its efficiency) for one unit of electricity.
“In energy terms, you are using about a third or a quarter of what you would use from gas and because the electricity [also] has a lower emissions intensity, you have massive carbon savings – that is why heat pumps are so attractive,” explains Rosenow.
With the nation’s electricity grid becoming greener year-on-year, households can secure huge energy and cost savings by converting to heat pumps, says Rosenow. They can save as much as 60% of energy compared with using a gas boiler. That includes taking advantage of time-of-use tariffs, or using electricity outside of peak hours, when it is cheaper.
Small step forward
The UK Government took a tentative step to encourage homeowners to move in this direction with its summer budget announcement on 8 July 2020. Chancellor Rishi Sunak unveiled a £3bn energy efficiency plan for homes and public buildings, with £1bn for public sector buildings and £2bn-worth of grants for homeowners. Heat pumps are listed as one potential measure to make buildings “greener”.
Financial support is important given that the purchase and installation of an air source heat pump costs between £8,000 and £18,000. A ground source heat pump can cost from £13,000 to £35,000, depending on the size of the system. In contrast, the purchase and installation of a new gas boiler tends to cost around £1,400 to £3,500.
“There is no reason why heat pumps need to be so expensive,” says Rosenow. “The only reason is because the market is currently small and hasn’t had enough innovation and uptake.”
About 1.6 million gas boilers are installed in Britain each year compared with just 22,000 heat pumps. About one million heat pumps would need to be installed annually until 2050 to reach the UK’s net zero emissions target.
In addition to government support, the UK could follow the example of countries such as Sweden that have opted to make fossil heating more expensive by implementing a carbon tax on gas. Another option would be to impose a regulatory backstop preventing households from replacing a broken fossil fuel heating system with another. Loans or grants could help lower-income households replace an old boiler with a renewable alternative.
Key to getting the most out of a heat pump is ensuring that houses are well insulated. Unfortunately, this is far from a given in the UK, which has some of the draughtiest homes in Europe. The government wants to tackle this problem with its new £2bn grant to help “green” homes.
Starting in September, the UK Government will provide vouchers to homeowners and landlords to help cover the costs of improving insulation and applying other energy efficiency measures. For every £1 spent on energy efficiency, the grant will provide at least £2, with up to £5,000 available per household. Some lower-income households will get the full cost of retrofits paid, up to a value of £10,000.
Hybrid heat pumps
A hybrid heat pump system, where a smaller heat pump provides heat for 85% of the time but switches to a gas boiler during colder periods, is being touted by gas companies as a better solution than just a heat pump.
Centrica, the parent company of British Gas, has confirmed its near-term domestic focus will be on hybrid heat pumps as the best route to reducing emissions and providing “better customer outcomes”. British Gas will roll out a two-year trial of the technology later this year in 75 homes. It says it will subsidise the £10,000 installation costs of hybrid heat pumps and offer them to households for about a third of that price.
Rosenow believes it is right to test out hybrid heat pumps, but only where there is no potential for full electrification. About 1.5 million buildings have no connection to the gas grid and it would be “prohibitively expensive to have a hybrid system in place”, he says. New buildings are “efficient enough” to have heat pumps and should not require hybrid systems.
Energy efficiency first
Gas companies in particular believe that hydrogen has a role to play in decarbonising the UK’s heat networks. Hydrogen, if produced from natural gas with carbon capture and storage (CCS) or from wind and solar power via electrolysis, is touted as a low-carbon or even fully renewable alternative to natural gas in future.
Various pilot projects are under way across the UK, but the timelines are long and the way forward uncertain. Centrica believes hydrogen is “part of the mix” but admits the technology to produce it cleanly is more than ten years away from domestic use and its costs are unknown.
“That is the biggest gas supplier in the UK,” says Rosenow. “If they say that, we can’t have hydrogen feeding UK homes in 2025. It is a fantasy.”
“Even within the hydrogen and fuel cell community [the general feeling is] that the fix can’t be to keep British housing stock the way it is and simply replace natural gas with hydrogen,” admits chair of the UK Hydrogen and Fuel Cell Association Chris Jackson. “That doesn’t solve the problem. There needs to be significant improvements to energy efficiency first.”
Putting energy efficiency first is a point on which all stakeholders agree. The UK should “focus full speed ahead on energy efficiency and electrification” over the next ten years, says Rosenow.
“Yes, do some research on hydrogen and do pilot projects, but it is a big bet to say hydrogen will solve our problems in 2040 and then not do anything in the meantime. I think that would be irresponsible.”
