What to look for in the Government’s buildings decarbonisation plan
By Jess Ralston, Analyst @jessralston2
Published:25 January 2021
Next up in the Government’s long-awaited set of sectoral decarbonisation plans is climate-proofing our homes. Expected ‘imminently’, 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 has, to put it mildly, faltered in its early days. Addressing shortfalls in what remains the flagship national policy to insulate millions of homes will be top of the list.
Initially rebuked for a short window in which to get work done, the Green Homes Grant deadline was extended by a year in November. This doesn’t appear to be bringing forward an increase in eligible contractors, however, so one lever that could be pulled is more time and more cash.
An extension could well support the army of installers that currently see little benefit in expensive training for such a short-lived scheme. It could also be accompanied by action on skilling up, with the Government’s Green Jobs Taskforce set to report soon, and building on the recent Skills for Jobs White Paper to tool up a generation of engineers, assessors and technicians.
So far the Government has outlined just over £3 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 billion|
|Social Housing Decarbonisation Fund Demonstrator||50 million|
|Green Homes Grant||2 billion|
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 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 a wind a decade ago to kickstart a domestic heat pump sector and bring about R&D that will see costs plummet.
The last attempt to support clean heat, the Renewable Heat Incentive not only failed to deliver on sufficient scale, but was also mainly the preserve of wealthier households; a mistake that it would be foolish to make again.
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 has 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 this be national? 100% hydrogen or a blend? Can we generate enough green hydrogen? – but shows 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 enough carbon neutral hydrogen to make a dent on home heating demand, but we can still expect answers in the Heat 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 good, 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.