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The UK Heat And Buildings Strategy – Clade’s View

The UK’s long-awaited Heat and Buildings Strategy has been released. We already wrote about the Scottish Heat In Buildings Strategy here and, now we’ve had time to digest the UK’s paper, we’ve put together this blog discussing it.

What Is The Heat And Buildings Strategy?

The strategy is part of a raft of decarbonisation policy documents aimed at helping the UK hit its target of net zero by 2050.

Buildings in the UK account for a large chunk of carbon emissions. 14% of our carbon emissions come from heating homes, because 85% of homes in the UK rely on natural gas. It’s been clear for many years now that making our homes and industrial and commercial buildings more efficient and less reliant on fossil fuels for heating and cooling is a vital step towards general decarbonisation.

The heat and buildings strategy is therefore a desperately important part of the roadmap.

What are the key features of the UK heat in buildings strategy?

There are three key arms to the strategy that we think are worth discussing:

1) The Boiler Upgrade Scheme. The UK Government has announced a £450m boiler upgrade scheme beginning April 2022. It will allow home owners to claim a grant of £5000 to install a heat pump. The UK Government has previously set targets of hitting 600,000 heat pump installations per year by 2028, and this is clearly part of the plan to hit that target. This funding is part of a £3.9bn total including £1.9bn for public sector decarbonisation, £950m for the Home Upgrade Grant, £800m for the Social Housing Decarbonisation Fund and £338m for Heat Network Transformation Programme.

2) Re-balancing energy prices. The UK Government has indicated its intention to attempt to re-balance energy prices so that heat pumps are no more expensive to buy and run than gas boilers. Cheap, clean electricity will be essential for a net zero economy and in order to do this the government are going to look at carbon pricing, among other levers. The exact mechanisms it will use remain to be seen.

2) Phasing out natural gas boilers. Once the prices of low carbon alternatives have fallen sufficiently, the government will phase out natural gas boilers from 2035. However, it has indicated that there won’t be an outright ban.

3) Trialling hydrogen. The government has said that by 2025 they will conduct a village-scale trial of hydrogen heating to evaluate its capacity for wider rollout. At this stage, however, the strategy is much more focused on heat pumps than hydrogen.

4) Improving the efficiency of buildings. The government has said it will take a fabric-first approach which means prioritising better energy efficiency in buildings before changing the source of heat. There will also be a new rating system for energy performance in industrial and commercial buildings over 1000sqm.

Overall, there aren’t a huge amount of surprises – the government needs to make buildings more efficient, and remove their reliance on natural gas. However, the specific actions it has promised to take are somewhat underwhelming…

Clade’s View On The UK Heat And Buildings Strategy

Unfortunately, it’s clear to us that the UK Government knows what is required but isn’t prepared to go far enough.

It clearly understands that heat pumps need to be rapidly rolled out across homes, industrial and commercial buildings, but its plan for doing so doesn’t add up. The £5,000 grands will help just 90,000 heat pumps, which seems pitiful compared to the target of 600,000 installations by 2028.

It equally fails to unveil any concrete proposals for dealing with the price differential between gas and power. It acknowledges that something must be done to make green electricity and renewable heating technologies cheaper when compared to fossil fuels, but doesn’t come close to revealing what that something is. The document is called a strategy, but in some cases it really only serves to outline the problem and fails to posit a strategic solution.

The next missing element is any mention of carbon pricing. It is widely recognised that a robust carbon price is THE mechanism for driving change. Whilst carbon pricing is much wider than heating the lack of a link between the two shows a weakness in the whole net zero policy.

And oddly, after explaining how important and necessary heat pumps are, it then diverts into discussing investing in wider rollouts of hydrogen heating. It surely knows that hydrogen heating is not going to be a viable alternative in the timescales we would need it to be. We’ve written a blog comparing heat pumps to hydrogen here.

Finally, it’s not ambitious enough in terms of timeframes. It makes a welcome commitment to radically changing building regulations in order to make new houses far more efficient, but it won’t make these changes for another three years. We have the skills and knowledge to build more efficiently right now, so we should be. Time is so, so important – we have a fixed carbon budget available to us before we hit that crucial 1.5C of global warming marker. By delaying action, we will fritter away more of our carbon budget now and find ourselves in a far more difficult position down the line.