Skip to main content

Exhibitor Press Releases

Utility Week Live

Decarbonization of Heat in the UK

Guidehouse
Decarbonization of Heat in the UK

Decarbonization of heat in the UK is in a tricky spot. The Climate Change Committee (CCC) advisory body has stated that the rollout of heat pumps is lagging behind what is needed to meet the UK government’s target of 600,000 annual installs by 2028. Home insulation retrofits have stagnated since 2012. A final decision on hydrogen’s suitability for heating is not expected until 2026.

In the face of this uncertainty, consumers are anxious about choosing the most appropriate low-carbon heating solution for them. Indeed, some advocates for hydrogen heating cite presenting consumers with a range of solutions as a key reason to pursue it.

When one considers how decarbonization of heat is likely to pan out across the UK, however, there is a reasonable case to be made that consumers are unlikely to have a huge say in which overarching low-carbon solution they transition to.

Let’s consider this in more detail. At a national level, all options remain on the table, including electric heating, hydrogen boilers, hybrid set-ups, and district heating. The local picture looks completely different. Local authorities are increasingly exploring the use of Local Area Energy Planning (LAEP) as a standard tool to reach their decarbonization targets, including the transition to low-carbon heat. LAEP is done in conjunction with gas and electricity network operators, who are each considering different scenarios from full electrification of heat to a more significant role for hydrogen.

The key element of LAEP is that solutioning occurs at a granular level, for instance by postcode. It indicates the most optimal low-carbon heating solution for each postcode, which essentially then becomes the action plan. If LAEP suggests that a postcode in London needs to be converted to district heat, then that is what the Greater London Authority will pursue. Given that Distribution Network Operators and Gas Distribution Networks validate their investment cases via the Office of Gas and Electricity Markets (Ofgem), implementing the wishes of a local authority comes with its own challenges, as there is no guarantee that Ofgem will approve any new energy infrastructure investments that arise from LAEPs.

Nevertheless, with local authorities setting ambitious decarbonization targets, they will have little time to consider alternative options. Offering postcodes more than one solution—for instance by expanding electricity network capacity, building a new district heating network, and providing a hydrogen-ready local distribution network—could add prohibitive extra transition within many local areas. Indeed, Element Energy’s Balanced Pathway least-cost net zero 2050 heating scenario for the CCC finds only 14% of homes will have hybrid heat pump and hydrogen boiler set-ups by 2050.

Therefore, once local authorities sign off on their plans, householders will essentially have to accept whatever low-carbon heating solution is deemed appropriate for their home. This may lead to them losing their gas boiler or being faced with high installation costs. People could understandably find this upsetting or frustrating. As a case in point, some residents of the Hydrogen Village trial in Whitby have expressed concern about having to accept hydrogen boilers in their homes.

This situation is challenging, as there is no precedent for this—when customers converted to gas, it was often supplementary to their existing heating systems rather than at the expense of them. Successfully transitioning UK homes to low-carbon heating therefore requires a threefold approach:

  • Understanding customers: Customer needs and desires may vary greatly, even within a single postcode. These issues must be well-understood. For example, Guidehouse is a partner on the EQUINOX innovation project, which as part of its remit has uncovered customer views on heat pumps and on unlocking flexibility from residential heat. Insights from this and other projects will be invaluable in understanding what perceptions will need to be shifted, and shape innovation in product and network design. Wherever possible, community preferences should be accounted for in heating decarbonization plans.
  • Being transparent: As outlined above, many customers will have little choice in which low-carbon heating solution to accept. All relevant parties, from local authorities to network operators, will need to explain this openly, honestly, and clearly. Customers must understand why they can only be heated via a hydrogen boiler, for instance. This will likely require concerted information campaigns, including face-to-face interactions.
  • Gaining buy-in: Once they understand what changes they have to make, customers must be guided along their journey. They need clear step-by-step instructions on the longer-term pathway to low-carbon heating, how to transition to the low-carbon solution. They should be given options where possible, for instance presented with a choice of different electrical heating technologies, or a list of manufacturers and insulation retrofitters to choose from. Consumer buy-in will be predicated on trusted advice. Networks should therefore look to work with independent organizations, including consultancies like Guidehouse, local charities, and consumer groups, to provide objective support to consumers and nullify the perception of vested interest.

To conclude, decarbonizing heating is undeniably a complex task, but the strategies and roadmaps to attain it are rapidly taking shape. The key to successful implementation will be consumer buy-in, which can only be attained if customers are told honestly and transparently about what the transition will mean for them. This requires a strong understanding of customer preferences, needs, and concerns, and the availability of independent guidance throughout delivery.

Meet Guidehouse at UWL

Loading