Decarbonising home heating, currently responsible for around 18% of the UK’s greenhouse gas emissions, is arguably the biggest challenge the energy sector faces over the coming decades, a new report has said.
The Ofgem decarbonisation action plan pitches electric heat pumps and the replacing of natural gas with hydrogen as two alternatives for future home heating – while acknowledging uncertainty as to their relative roles.
Heat networks are also seen as having a role to play, where heat is provided by heat pumps, hydrogen, biomass, waste heat or other low carbon fuels.
This year, the government plans to publish a Low Carbon Heat Roadmap, and while this will provide some direction for the future, Ofgem recognises that “fundamental technological uncertainty” means many questions will remain.
Already, government is considering a proposal from the heating industry to set a date by which all boilers on sale would be “hydrogen ready” for conversion from natural gas.
But the Ofgem report recommends “sensible low regrets” actions that can be taken now to ensure the UK is set up for the “huge task” of heat decarbonisation.
In particular, developing evidence on the feasibility and cost of different routes to decarbonisation is seen as critical to enable the sector to deliver a timely transition at lowest cost.
The Clean Growth Strategy has already noted the need to make decisions about low-carbon heating for homes connected to the gas grid in the first half of the 2020s – with the large-scale deployment of low carbon heating seen as having to begin before 2030.
To Ofgem, the current key considerations are:
- How low carbon heating can be rolled out cost-effectively
- The role of the energy sector in delivering household energy efficiency measures
- How the Fuel Poor Network Extension Scheme could be updated with low carbon alternatives in the future
Ofgem will take related findings into account in regulatory policy making, developing and implementing new programmes of low regret measures within core competencies.
What follows is work with government and devolved administrations at the earliest stage to inform the scope, delivery and compliance processes of new environmental schemes they may propose, and to determine if Ofgem has a role in administering such schemes alongside those existing.
The report, then, sees the future of heating as “less certain”, with a range of possible different pathways to decarbonise.
In 2017, just 4.5% of the energy used for heating the UK’s 29 million homes and other non-residential buildings was from a low carbon source.
Ofgem says this number needs to rise significantly by 2050; with related analysis proposing 90% of homes should be heated from a low carbon source.
But the report acknowledges there is unlikely to be one single solution across GB, with different areas better suited to different approaches due to resource availability and housing types.
To Ofgem, greater energy efficiency is a low regret option that can be taken in the knowledge that it will be beneficial regardless of what technologies come to the fore in the future.
Ofgem expects that heat pumps will be needed to heat many homes, regardless of the future of hydrogen, with related research saying a switch to low carbon heating will require annual investment by 2050 of around £15-20bn (in 2019 money) up from just £100m in 2018.