About Nesta

Nesta is an innovation foundation. For us, innovation means turning bold ideas into reality and changing lives for the better. We use our expertise, skills and funding in areas where there are big challenges facing society.

Our sustainable future mission aims to reduce household emissions by 30% from 2019 levels by 2030.

Within the Nesta Cymru team we have the opportunity to design, test and scale projects and develop innovations that are specific to Wales and that respond to the challenges, opportunities and environment of the Welsh context.

Our team in Wales works with partners to identify opportunities to try new and different ideas that arise from the distinct political, cultural and economic landscape.

What’s the context in Wales?

Household heating accounts for 60% of gas use in Wales, so there are huge opportunities to drive forward decarbonisation in the housing sector, to focus on delivering the skills for a green workforce and to make smart use of the limited devolved energy powers Wales holds.

The ambition exists – the Welsh Government has bold targets to reach 70% of consumption by renewables by 2030, up from 56% in 2020 – but we know that achieving this goal will require innovation in technology, delivery and public engagement.

Within Wales we have some of the poorest-quality housing in Europe and high levels of fuel poverty. So it’s not surprising that devolved policy has focused on fabric retrofit and insulation, as well as gas boiler replacements within fuel poverty schemes. Most action on existing homes in Wales tends to be driven by what is within Wales’ control, including grants, regulation and rent-setting in social housing.

Climate is higher on the agenda than it has ever been, so the conversation in Wales is starting to shift. Innovations developed in social housing, with an emphasis on cutting bills and tackling fuel poverty, now need to transfer and scale to privately-owned and rented housing – where income ranges are wider, emissions are often higher and the needs of owners, landlords and tenants are different.

A combination of climate-first policies and existing schemes that prioritise tackling fuel poverty will be essential to meet Wales’ ambitious targets. Nesta believes there are opportunities to bring a focus on decarbonisation, evidence and scalable solutions to areas including policy, behaviour change and green finance.

Our focus in Wales

Given the above context, we are focusing our work in Wales in the following areas:

Low-carbon heat

Carbon emissions are cumulative, so reductions achieved in the early part of this decade have greater value than those achieved later. We should be asking what actions we can take today to achieve the greatest reduction in emissions quickly and sustainably with the resources we have.

Heat pumps are currently the best available low-carbon alternative to a gas boiler. However, we are still in the early adopter phase in the UK, despite this technology being widely used in northern Europe. Heat pumps are the best current solution to decarbonising our homes and addressing carbon emissions at scale. Replacing a gas boiler with a heat pump reduces a home’s gas use by over 70%, assuming the carbon intensity of the electricity grid remains constant.

We are working on developing insight and research that will help inform the development of a net-zero heat policy in Wales.

The heat pump market and skills sector is less developed in Wales and the UK than other nations in Europe. Nesta is targeting the key areas of cost, appeal and skills to enable the roll-out of the technology to pick up pace. Some of these challenges can benefit from made-in-Wales solutions and we should be ambitious for Wales to have a thriving low-carbon heating sector in the long term.

We will be using our methods to explore new business models for heat pump roll-out, growing the sector in Wales and exploring ground-source heat pump networks.

We will also work with partners to design experiments to test and understand what insights from the Welsh Government’s Optimised Retrofit Programme are most useful in persuading and supporting owner-occupiers and landlords to take action on decarbonisation, as well as supporting the latter to more effectively engage with tenants.

Green finance

Affordability is one of the key barriers to uptake of retrofit measures. It is clear that finance will have a huge role to play in the green transition at all levels, including in our homes. Getting this finance offer right is an area where innovation is clearly needed.

We are creating the environment and evidence base to develop, test and scale green finance products to make green home upgrades more affordable, accessible and attractive.

Using a multidisciplinary approach, we are modelling the most effective ways to design and offer green finance to create action. Our work with the Development Bank of Wales to understand assumptions, motivations and barriers is providing strong foundations to design finance products and ensure people can find suitable advice about the options for their homes and take practical steps to remove barriers to greener heating.

How will we work?

We approach these issues with a combination of scientific rigour and creative ideas. We draw on our expertise in data analytics, behavioural science, design, arts and culture and collective intelligence to tackle these problems and opportunities.

If you’re interested in finding out more about this work contact Andy Regan at [email protected]

Team

Andy Regan

Andy Regan

Andy Regan

Senior Mission Manager, sustainable future mission

Andy works within the Nesta Cymru team as mission manager for a sustainable future.

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