Fairness needed in farewell to fossil fuels

Public acceptance of measures to transition to cleaner heating must form part of government proposals. Those property owners with off-grid heating are in the front line

Across Great Britain, all Governments – both at Westminster and devolved – are determined that the days of fossil fuel heating must be numbered. A major transition is required in the way our buildings – commercial, public, residential – are heated. And, increasingly only as an afterthought, how energy wastage in them is minimised.

Given the substantial size of the changes required, a transparent commitment to fairness must beat its heart.If the transition is to succeed, public acceptability is vital, preferably avoiding disadvantaging any discrete group. Like those living or working currently unattached to the gas grid.

Under current proposals, it will be off-grid buildings with fossil fuel heating systems that will be forced to transition earliest. The underlying presumption is that replacing oil boilers will be forbidden from 2025 in Scotland, 2026 in England, much earlier than other households with gas. The presumption is that this requires putting in heat pumps, as it is assumed that hydrogen fuels (of any colour designation) will still be at experimental stage.

There are now over 1.1m oil-fired boilers in use in Britain. Each year, around 60,000 are replaced. As we now stand, no Energy Performance Certificate (EPC) survey of a building heated by an oil boiler has recommended replacing it with a heat pump. This is on cost-effectiveness grounds, simply because, even at the current high price of oil,there is still a 4:1 differential between the outlay upon equipment plus running costs. A year ago, when the cost per barrel was lower, running an oil-fire system would have engendered a price differential closer to 6:1.

Last year, there were around 30,000 heat pumps installed in British buildings. Prime Minister Johnson has set a target of increasing twenty-fold the current market by 2028. There is a bland presumption that heat pump prices will drop precipitately. But even before the installer base is fully developed and experienced, the intention is nonetheless to start eliminating oil-fired boilers well before cost reductions have been achieved.

As compulsory “early adopters”, those with oil-fired systems risk being used as guinea pigs -ending up paying a high price for the government’s “learn by doing” approach. And completely undermining the government’s commitment to fairness. Helpfully, the UK government has retained a requirement of “reasonable practicality” when assessing homes for heat pump conversion. It is vital that this is framed in a way that really protects consumers from excessive costs, permitting other heating and energy saving options.

It is essential that decisions are based on credible evidence that takes full account of the diverse nature of the building stock. I share the deepconcern about the efficacy of data being cherrypicked. According to page 7 of last autumn’s Heat & Buildings Strategy, the UK government now considers that 81 per cent of off-gas grid homes in England now heated by fossil fuels will be able to switch to low temperature heat pumps without any need for any energy efficiency improvements. A further 4 per cent will be able to do so by spending just an average of £1,000 on energy efficiency measures. The reliability of this startling new thesis is unclear.

This is strikingly at odds with countless previous reported Government statements. For example, in 2018, Climate Minister Claire Perry stated in Parliament that 65 per cent (765,000) of oil-heated homes in Great Britain were in EPC bands E, F or G. These are all bands that Government policy is seeking to outlaw. Installing heat pumps doesn’t help. More recently, in September 2020 her successor Greg Hands told Parliament that, based on the Business Department’s own research, the investment required to upgrade a band E home to the acceptable band C was reckoned to be on average £12,300. Moving from bands F and G would average £18,900.

The new Heat Strategy also seems to have excised accurate memory of a detailed study that the Business Department published just three years ago. Entitled the ‘Technical Feasibility of Electric Heating in Rural Off-Gas Grid Dwellings’, this study stressed that, during colderwinters, the proportion of rural homes that would be satisfactorily supported via just an air-source heat pump would be just 41 per cent. Curiously, it is this same study that seems to underpin too much of the Economic Impact Assessment attached to the new Strategy, tacitly dismissing much need for better building-fabric energy efficiency measures.

Overall, there is increasingly a lack of meaningful support for technologies uninvolved with electric heat generation. This despite the Climate Change Committee’s Sixth Carbon Budget (December 2020) identifying that around 900,000 off-gas-grid homes will need a solution other than a heat pump. And despite the most recent National Grid Future Energy Scenario report (2020) stating categorically that renewable liquid fuels would be needed for over 1m rural homes, due to a limited capacity to achieve cost-effective grid upgrades to support heat pumps. Last autumn’s Strategy offers little or no support for their deployment.

The drive towards the electrification of heat and the focus on Johnson’s 2028 heat pump growth target, means that the off-grid challenges are being significantly underplayed. Rural residents and workers risk being greatly disadvantaged. This blinkered approach will end up undermining any chance of maintaining that vital political consensus required to achieve such dramatic changes.