What to look for in the Government’s buildings decarbonisation plan
By Jess Ralston, Analyst @jessralston2
Published:04 May 2021
Next up in the Government’s long-awaited set of sectoral decarbonisation plans is climate-proofing our homes. Expected in May 2021, the Heat and Buildings Strategy should bring a route to emission-free housing.
With heat and buildings responsible for a hefty 40% of the UK’s CO2 emissions, and a greater impact on everyday life than virtually any other emissions source, it is vital that the Government gets this one right first time.
Here’s a quick run through of what we can expect.
The Government’s Green Homes Grant scheme was, to put it mildly, a flop. Now scrapped despite soaring demand, addressing the policy shortfall to insulate millions of homes will be top of the list.
Stable decisions, clear deadlines and learning from the Green Homes Grant’s backwards application system is crucial for a successful replacement. With the North and Midlands set to benefit most – popularity was highest here once weighted for population – an effective energy efficiency scheme also ticks the levelling-up box.
The successor could also support the army of installers that saw little benefit in expensive training for such a short-lived scheme. Longer timeframes that warrant the investment could be accompanied by action on skilling up, building on the Skills for Jobs White Paper and upcoming Green Jobs Taskforce report to create a new generation of engineers, assessors and technicians.
So far the Government has outlined just £2.9 billion of the £9.2 billion efficiency spend pledged in the 2019 Manifesto. The recent Energy White Paper hints that plans for the rest of this cash will be forthcoming in the Heat and Buildings strategy, but a proper plan to carbon free homes will have eyes beyond this parliamentary term.
|Public Sector Decarbonisation Fund||1.475 billion|
|Social Housing Decarbonisation Fund Demonstrator||110 million|
|Green Homes Grant (voucher scheme)||320 million|
|Green Homes Grant (local authority delivery)||800 million|
|Home Upgrade Grants||150 million|
Central to upgrading Britain’s homes is bringing down the cost of doing so. Therefore, an acceleration of the Government’s Buildings Mission would bring forward anticipated reductions in upgrade costs.
But grants are not the only way of incentivising home upgrades. Green mortgages, stamp duty rebates, zero interest loans, reducing VAT on energy efficiency, optional salary sacrifices, council tax flexing and minimum standards backed by sufficient support all have a place in solving this puzzle. Any strategy worth its salt will lean on as many as possible.
Likely to be one of the most headline-grabbing aspects of the strategy, an end date for the sales of fossil fuel boilers is crucial to hitting net zero. Fossil fuel heating has no place in a net zero home.
From media reports one could assume that calling time on the humble gas boiler represents a political battleground, however findings from Parliament’s recent Climate Assembly show it to be an overwhelmingly popular move to curb carbon, backed by 86% of assembly members.
An end date, however, needs to be accompanied by a plan to get there. Measures to ramp up heat pump installations, building on potential in new homes in the Future Homes Standard and the Prime Minister’s pledge to fit 600,000 per year by 2028, should be accompanied by increased public engagement, extolling the benefits that clean heat brings.
It would also be a mistake to shy away from the fact that, as it stands, heat pumps are significantly more expensive than boilers; something that will be an instant turn off to the vast majority of Brits.
Therefore, we can expect a beefed-up Clean Heat Grant scheme to bring forward short-term demand, coupled with policies reminiscent of those that supported solar and wind a decade ago to kickstart a domestic heat pump sector and bring about R&D that will see costs plummet.
Similarly, as recommended by climate advisors and academics, the costs of environmental and social levies on energy bills – which bizarrely fall mostly on cleaner electricity at the moment, rather than fossil gas – could be re-distributed to encourage the move to clean heat.
Bringing the nation along with decarbonised heating presents one of net zero’s biggest headaches. With a plan to end boiler sales odds-on for inclusion, the next big test is that it is accompanied by a suite of plans, policies and pledges to make the alternative more appealing.
Hydrogen’s role in the future of buildings is currently uncertain. Proponents point to an easier transition; opponents highlight supply concerns and production emissions.
The Government has been keeping its cards close to its chest, although some clues have slipped out. One of the biggest came recently when the BEIS Secretary of State said that in ‘7 to 8 years [there] could be hydrogen distributed through the gas network’.
This statement raises more questions than it answers – will it be national? 100% hydrogen or a blend? Can we generate enough green hydrogen? However, it does suggest that the route to decarbonised heat will likely be regional.
Experts warn that waiting for hydrogen technology to come to the fore may reduce action on emissions in the short term and prove a bad bet in the long run. Some also suggest that its role may be more limited to decarbonise industry and transport and that well-established electrification is the optimum in homes.
The Government’s Hydrogen Strategy isn’t expected until later this year, bringing details on if and how we can generate the 5GW promised in the white paper and whether it will be used for home heating, but we can still expect answers in the Buildings Strategy.
What proportion of the country will be kept warm by electricity, and what proportion by hydrogen? What are the metrics that led to this decision? How will two systems with different costs and characteristics be sold to the public? The Heat and Buildings Strategy should finally give answers to these questions, allowing policymakers and industry to focus on delivery.
Lots to deliver
The Heat and Buildings Strategy will be the first of its kind in England, considering a whole house roadmap, energy efficiency and heating together.
The recent mood music from Government on net zero has been hopeful, typified by an ambitious Energy White Paper. On housing though, it is far from a done deal, as the recently watered-down Future Homes Standard showed.
The Heat and Buildings Strategy is a one-off opportunity to make decarbonised domestic life a reality; it should deliver clear signals to homeowners, landlords and the heating industry; policy backing up regulations so that the transition is fair; and an ambitious timeline that ensures our housing is put on a path aligned with net zero. We cannot get there without it.