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NETWORK / 30 / JUNE 2016 Decarbonising heat H eat is an issue. It represents almost half of UK energy use and a third of UK carbon emissions. The UK won't meet its carbon-reduction targets set out in the Climate Change Act – or fulfil its commitments made in the Paris Agreement – without a long-term plan to move to low-carbon heating. A recent report into the ways in which the UK might manage decarbonisation of the heat system, undertaken by the Centre for Energy Policy and Technology at Imperial College, says formulating a plan should be a pressing concern for the UK government. Early planning and preparation will make the transformation of this significant sector as cost-effective as possible, and keep unavoidable disruption in both streets and homes to a minimum. It will also allow the mass rollout of low-carbon technologies to get started in the 2020s. The government appears to be attuned to this need. In November it announced that the budget for the Renewable Heat Incentive (RHI) is to increase to £1.15 billion in 2020/21 – from £430 million in 2015/16 – and, in the Budget, heat networks received £320 million of support for the next five years. How this money would be best spent is now being discussed. No silver bullet As well as calling for a plan, the Imperial College report also concludes that there is "no silver bullet" – no single low-carbon solution to replace natural gas. The key problems are meeting the huge seasonal variations in demand and the required ramp rate, both currently addressed by the UK's significant capacity to store natural gas. The electrification of heat, once considered "the silver bullet" for decarbonisation, has largely been abandoned because the peak heating load would be five to six times what it is today, requiring huge increases in generating capacity. The report concludes that to deal with the variation in geography, housing types and occupancy, three solutions will have to be deployed to different extents. Electrification, alongside repurposing the gas grids for hydrogen and installing heat networks, will be the main solutions for heat. But none of these solutions is the perfect fit. A major element of the report is weighing up the attractiveness of each approach, bearing in mind the cost and disruption implementation will cause. None of the solutions is without drawbacks, as the diagram below shows. Each solution will be applicable within suitable properties if pilot schemes and further preparatory work is done to address the problems that have been identified. One important area of concern is managing the disruption to homes and businesses – either through streetworks or the replacement of appliances – during the transition. The report warns that if the transition is not well managed "it could become a major social and political issue, even where the technical and economic justification is favourable and the end outcome itself is uncontroversial". The choice of solution and the rate at which it is deployed may well be determined by customer acceptance rather than cost. The report recommends that decisions should be made locally rather than seeking a single approach at national level, but government should at the earliest opportunity establish a system of governance for heat. The relevant parties are likely to be the National Infrastructure Commission and Ofgem because the current governance arrangements are "not fit for purpose". It is also vital that a national infrastructure programme for energy efficiency is started, because investment in this area can reduce the scale of the space heating challenge for all options. Repurposing gas grids The main benefit of reusing the existing gas grid over other options is that most of the infrastructure is already in places. But there will still be plenty of disruption because domestic appliances will have to be replaced with hydrogen-ready ones. This disruption could be minimised by regulating for the installation of such appliances in advance. Hydrogen has similar storage requirements to natural gas, so it should be able to meet the demand peaks and ramp rates, albeit at three times the pressure of natural gas. The main difficulty with using hydrogen is that it is expensive to produce, either through the electrolysis of water or through steam methane reformation of natural gas. This is dependent on carbon capture and storage, which the government is no longer supporting. It scrapped its £1 billion CCS competition last year. However, one potential source of gas for conversion to hydrogen in the future could be hydraulic fracking. This took a major step forward last month when North Yorkshire Council approved Third Energy's plans to frack near the village of Kirby Misperton, the first time such an application has been approved since the ban on fracking was ližed in 2012. The company will fracture the well in multiple places over an eight-week test period. Electrification Decarbonising the electricity sector is well under way, and once sufficient low-carbon generation is operating, it could meet the extra requirements of the heat sector. Highly efficient heat pumps are suitable for less densely populated environments where traffic disruption is less of an problem, and are particularly effective for well-insulated properties such as flats in high-rise buildings where gas-fired boilers are not used. But the cost and disruption required to install the equipment could put many customers off the technology. Any penetration of heat pumps is likely to require upgrades for local networks to avoid short-term fluctuations in service quality. Budget cap mechanism On the announcement of the increase in funding for the RHI, the government also proposed a raž of changes to the mechanism. These included a new budget cap and changes intended to promote the deployment of technologies "likely to be strategically important in the long term", such as heat pumps. As a consequence of these changes, government is reviewing the current air-to- water heat pump tariff and will potentially amend the ground source heat pump tariff. It is also seeking to drive up the performance of heat pumps installed under the RHI. Urban and suburban properties Repurposed gas grids (hydrogen) Electrification (heat pump) District heating Cost/impact of decarbonised heat supply Cost/impact of network activities Cost/impact of activities in customer premises Need for new regulation Cost and impact of each approach