Utility Week

22 | DECEMBER 2021 | UTILITY WEEK Policy & Regulation Analysis Pump up the volume? The Heat and Buildings Strategy has been published to much fanfare, but will it actually deliver the vast number of heat pumps the government would like to see? David Blackman reports. T he advocates of heat pumps and hydro- gen heating have been at daggers drawn for much of the past year. But a truce appears to have been called in the bat- tle of the boilers following the publication on 19 October of the government's long-awaited Heat and Buildings Strategy. The strategy sets out the UK's plan to significantly cut the carbon emissions of the country's 30 million homes, and for Adam Bell, former head of energy strategy at the Department for Business, Energy & Industrial Strategy (BEIS), the document is "almost revolutionary". "Compared to where we were in 2017 it's a massive step forward and will make a sig- nificant difference to our chances of getting to net zero," he says, although he adds the caveat: "Whether it's enough is a different question." The greatest angst within government cir- cles appears to have been generated by how to deal with the Climate Change Commit- tee's recommendation to ban gas boiler sales from 2033. Bell, who recently le– government to become head of policy at consultancy Stone- haven, says: "If you look at the noises com- ing from Conservative backbenches about added costs to consumers, there was no way there would be any sort of requirement before the next election to mandate heat pumps or make people buy them." The strategy's watered-down statement that the government has an "ambition" to end gas boiler installations from 2035 has le– both sides of the heat pump versus boiler debate with something to play for. Mike Foster, chief executive of the Energy and Utilities Alliance (EUA), draws comfort from what he sees as a shi– in language. "This is a real toning down of the rhetoric," he says. Meanwhile, Dr Richard Lowes, senior associate at The Regulatory Assistance Pro- ject, sees the wording as a "so– ban" on gas boilers. The "big missing element" in the strat- egy, though, is energy efficiency, says Foster. "In the whole Heat and Buildings Strategy, buildings were not really catered for," he says. Lowes agrees, describing the lack of support for energy efficiency in the strategy as a "huge gap". And that gap was not filled when the Treasury published its spending review one week later, mapping out government expenditure for the remaining three years of the current parliamentary term. Cash was earmarked for existing initia- tives to decarbonise social housing and pub- lic sector buildings, which were awarded £800 million and £950 million apiece. A further £950 million was earmarked for the Home Upgrade Grant, which is targeted via local councils at low-income households liv- ing in homes with low energy efficiency. The spending commitments outlined in the heat strategy were £450 million allocated to the Boiler Upgrade Scheme, which offers grants worth up to £5,000 for households installing low-carbon heating schemes, and £338 million for heat networks. These programmes together add up to £3.9 billion for energy efficiency and heat decarbonisation over the next three years to 2025. However, even when the sums already spent on the largely abortive Green Homes Grant scheme are included, approximately £2 billion of the amount pledged for energy efficiency in the 2019 Conservative election manifesto has yet to be allocated. Foster says: "I don't think they want to commit to a long-term government-funded [energy efficiency] scheme for England. They've shown no appetite for it to date and clearly no appetite for the next couple of years." In addition, sums pledged in the mani- festo for energy efficiency appear to have been rebadged into initiatives for supporting low-carbon heating, says David Blakemore, outgoing chair of the Committee on Fuel Poverty. Energy efficiency should be key Support for energy efficiency should be a greater priority for government spending than low-carbon heat, says Foster: "Going forward, energy efficiency is the obvious thing to address. If I had £450 million to spend, I would spend it on energy efficiency for arguably a better payback on carbon and bill savings." Making homes more energy efficient is also the best way of tacking fuel poverty, and installing heat pumps into poorly rated homes is "pointless", he says: "It's like pour- ing hot water into a cracked teapot; you've got to have the energy efficiency done first." Just because this remaining cash has not yet been allocated doesn't mean it won't be, says Bell. "There's couple of years le– in this Parliament for the Conservatives to meet their manifesto commitment. The suspicion would be that if they have something else,

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