Strategic choices on low-carbon heat
www.nesta.org.uk/feature/a-policy-library-for-decarbonising-home-heating/strategic-choices-on-low-carbon-heat/
www.nesta.org.uk/feature/a-policy-library-for-decarbonising-home-heating/strategic-choices-on-low-carbon-heat/
Making the right long-term choices to decarbonise our homes in the quickest, most affordable way
The first thing that governments in the UK need to determine is the best strategic direction for decarbonising home heating. Government should provide confidence and clarity to both consumers and the heating industry about how the transition to low-carbon heating should work.
This means being clear about what technologies are likely to be used, as well as the balance between insulation, low-carbon heating and other green home upgrades. It also means making strategic choices about reforms to markets and institutions, and about how the UK, Scottish and Welsh Governments plan to adjust policy in the long term.
Delve into our latest work on strategic choices for low-carbon heat below, or return to the main page to explore our other policy areas.
Does the wider energy market need reforms to better deliver low-carbon heating? Our paper on the Future of energy retail proposes five alternative energy models that could expedite the transition to low-carbon heat for households.
This report explores how the electricity retail market can be redesigned to support net-zero goals, focusing on customer adoption of low-carbon technologies. It identifies key issues such as insufficient financial incentives and regulatory complexities, proposing five alternative models for reform. While not endorsing any specific model, the report emphasises the need for a broader dialogue on long-term market changes to accelerate decarbonization and improve consumer outcomes.
How much insulation is needed to transition homes to low-carbon heat? Our paper Insulation impact explored the best approach to insulating homes alongside installing heat pumps.
The report argues heat pumps can be efficiently installed in less well-insulated homes, contrary to common belief. Key factors for heat pump efficiency are system design and properly sized radiators, not insulation levels. While insulation reduces heat demand and enhances efficiency, it is not essential for heat pumps. The report recommends improving 13 million UK homes to EPC C standard by 2030, prioritising fuel-poor households and social housing, and emphasises that low-carbon heating should progress alongside insulation efforts.
What is the best mix of technologies for low-carbon heating? Some of our work has considered these technology choices, and suggested a role for various types of heat pumps - but not for hydrogen boilers.
Blogs:
The blog argues air conditioning units, like air-to-air heat pumps, could significantly cut home heating emissions by replacing gas boilers. Though less common in UK homes due to the prevalence of water-based central heating, air-to-air heat pumps offer cost-effective, efficient heating and cooling. Despite their potential, UK policy overlooks them and focuses on traditional heat pump systems – potentially missing a flexible, low-carbon heating solution.
The blog challenges misconceptions about the feasibility of heat pump installations in rural settings. Despite initial assumptions, rural areas, from Cornwall to the Scottish Highlands, are spearheading the adoption of heat pumps. Data reveals that off-grid homes, typically reliant on costlier and less convenient fuels, are embracing heat pumps as a cleaner and more economical alternative.
The blog shows how hydrogen presents a promising yet complex solution for achieving the UK's net-zero goals. While it offers potential in hard-to-electrify sectors like heavy industry, its viability for widespread home heating remains uncertain. Issues such as cost, efficiency compared to alternatives like heat pumps, and infrastructure challenges suggest a cautious approach to its adoption. Green hydrogen, though desirable for its low-carbon potential, faces significant hurdles for scalability. Therefore, prioritising proven technologies alongside strategic hydrogen deployment is prudent for effective and timely decarbonisation efforts.
Reports:
The report recommends an emphasis on clear tenant support and adaptation to individual capacities, ensuring effective onboarding and ongoing engagement. Additionally, the report stresses the importance of securing appropriate energy tariffs and providing transparent information on energy consumption. Planning for potential outcomes, such as reimbursing energy costs if savings aren't realised, underscores the need for careful consideration and proactive measures in wider technology adoption within social housing.
The report examines the varied landscape for heat pump adoption across Europe. Northern European nations are the biggest adopters, favouring air-to-air models for affordability and ease of installation, but their role in heating versus cooling remains unclear. Conversely, southern Europe leans on air-to-air models for cooling needs so transitioning to air-to-water models is challenging. Despite these preferences, the study underscores the potential for air-to-air models in colder climates and advocates broader considerations for effective heat pump deployment.
Can heat pumps use energy flexibly, to reduce pressure on the grid? Our landmark pilot of using heat pumps flexibly showed what might be possible.
The report outlines findings from the HeatFlex UK pilot, focusing on heat pump flexibility and consumer response to automated energy management. Despite the small sample size limiting generalizability, preliminary results suggest the intervention effectively shifts electricity consumption while maintaining participant comfort. Feedback indicated high acceptability of automated heating adjustments, though interoperability challenges hindered broader participation.
Scotland has often led the way within the UK on energy and heat policy. Shaping low-carbon heat policy in Scotland is an important goal for Nesta, and also provides an opportunity for learning from other nations to inform our approach.
The blog underscores the urgency of accelerating home decarbonisation in Scotland through widespread adoption of heat pumps and improved energy efficiency. Despite being responsible for a significant portion of carbon emissions, the transition to cleaner heating methods like heat pumps has been slow. Proposals for mandating heat pump installations at the point of home purchase are highlighted as a groundbreaking step, potentially enhancing property values and integrating clean heating into broader renovation projects.
The feature emphasises Scotland's ambitious goals for achieving net-zero emissions through decarbonising home heating and urges proactive policies and support to foster industry expansion. Despite strong public support and available technology, a critical barrier exists: a severe shortage of trained installers. Current estimates suggest a workforce increase of 15 to 20 times is necessary to meet targets by 2045. Interviews with industry leaders reveal insights into future trends, projecting significant growth in medium and large businesses initially, with potential shifts towards smaller enterprises over time.
Explore how Scotland's varied geography, housing, and heating fuel types will impact the demand for low-carbon heating. Our analysis predicts regional differences in heat pump adoption over the next 10 to 25 years, influenced by regulations and supply chains, and provide detailed regional profiles and future trends for heat pump uptake.
The report by Energy Systems Catapult for Nesta in Scotland examines the suitability of Scottish dwellings for transitioning to ground and air source heat pumps. Findings reveal a significant energy efficiency gap, with 70% of homes rated D or C on the EPC scale, and challenges across all housing types including cost and spatial constraints. Older housing, particularly pre-1914 tenement blocks, face substantial retrofitting barriers. Achieving Scotland's net-zero target demands innovative solutions tailored to diverse housing needs and overcoming multifaceted adoption challenges.
Wales has historically focused heavily on fabric upgrades but has also made strides recently to catch up on heat pumps and low-carbon heating. Influencing Welsh Government heat policy is a priority for Nesta, as the policy landscape in Wales has shaped many of our most important projects.
In response to the Welsh Government's consultation on renewable energy targets, Nesta expressed support for the proposed 5.5GW target for installed heat pump capacity by 2030. However, we recommended a shift towards a target based on the number of homes adopting heat pump systems, proposing a goal of 400,000 homes by 2035. This approach would enhance clarity and effectiveness in planning, aligning with both ambitious goals and feasible policy measures.
The blog assesses the Welsh Government's draft Heat Strategy, which aims for the installation of 30,000 heat pumps annually by 2030. Nesta's response highlights positive aspects, emphasising urgent needs like reducing retrofit barriers, relaxing planning rules, and providing targeted financial support. With tailored strategies for decarbonisation and tackling fuel poverty, Wales could set a precedent for the UK in achieving net-zero emissions.
