Is the UK ready to transition to low carbon heat?

19/12/2017

Tom Graham - Commercial and Infrastructure Solicitor

Thomas Graham

Solicitor

Given the social and political imperatives around reducing carbon emissions, one would expect government policy to be fully supportive of low carbon heating, as demonstrated by its recent Clean Growth Strategy. However, the challenge is now on industry to deliver with a significant barrier being the economics associated with the different low carbon heating technologies.

So can how can the UK make the transition to low carbon heating?

Some useful insights came from a recent report by the Energy Research Partnership (ERP) and the implications for both customers and industry in making the transition to low carbon heat:

  • Heating domestic and commercial buildings accounts for almost a quarter of UK greenhouse gas emissions.  Heat will need to be decarbonised if the 2050 target to reduce emissions by 80% is to be achieved. 
  • A range of different low-carbon heating options should be pursued now in parallel, including: decarbonised gas supply (hydrogen, biogas and BioSNG); decarbonised heat networks; electrification with heat pumps; and technologies like biomass and solar thermal.
  • There isn’t one "silver bullet" solution for decarbonising heat – a combination of options will be required as no option may dominate in the way natural gas currently does.
  • "Low regret" options should be taken now, such as improving energy efficiency of housing stock, implementing strong new build standards and incentivising all existing households to make energy efficiency improvements
  • The capital investment required for decarbonisation means the public will face increased costs – in terms of unit energy prices; replacing existing appliances and implementing energy efficiency measures.  This will be a difficult political message to convey given proposed caps on energy bills and fuel poverty issues.
  • Early engagement with the public and a clear narrative will be essential so that householders understand what changes are being made to the energy system – all 25 million homes in UK will be affected.
  • The transition to decarbonised heat will occur alongside other major changes in the energy system, as transport, industry and the power sector will be looking at similar energy sources.

The transition to a decarbonised heat system will require investment and long-term planning, which is supported by clear policy guidance.  There are both opportunities and challenges associated with each of the proposed low carbon heating options, which need to be examined in more detail.

While a natural gas fired combined heat and power (CHP) solution has been regarded as the best option for decarbonising heat, this view may now be challenged in light of the increasing supply of electricity to the National Grid by renewable energy sources.  Similarly, there is a debate about the extent to which government policy should support gas CHP as the most economically viable technology for decarbonising heat compared to other power sources.

Bevan Brittan has a dedicated Energy team which advises on low carbon heating options like heat networks, renewable energy infrastructure and energy from waste facilities.  We have worked with property developers, funders, energy generators, infrastructure providers, ESCOs and public sector organisations.  If you would like further information on this topic, please contact a member of our team.

A copy of the ERP's report can be found here.

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