This year, the UK Committee on Climate Change (CCC) presented a Net Zero report saying that is not only possible for the UK to be carbon neutral (the famous ‘net-zero’ target, which means that all the CO2 emitted in the UK minus the CO2 sequestered should be equal to zero), but that it has to be done by 2050!

Both the UK and Scottish Government have agreed to the CCC recommendations and are taking important steps to this end. For instance, decarbonising heat has been identified as a priority, and the Scottish Government have announced that from 2024 all new homes must use renewable or low-carbon heat. 

Are we in the right track?

Unfortunately, it does not look like it.

Currently the majority of Scottish households rely on gas to heat their homes. It is a relatively cheap, safe and reliable fuel that people know and trust. Therefore, the challenge is to ‘convince’ people to move away from the status-quo to new clean technologies and fuels. It might not sound like a big problem, but considering the level of change required this would be a colossal task.

New builds are the ‘low-hanging fruit’ in decarbonising residential heat. For the potential buyer, a new off-gas grid house today might be less appealing than a gas-connected one, but as more and more developments move towards to heat pumps heating (using electricity); people will be more willing to accept it. Also, new builds, with high levels of energy efficiency, are the perfect place to install heat pumps as they could be more economical than oil or gas boilers.

The existing housing stock is a completely different story. In a less-efficient building, heat pumps and other electric heating technologies could be considerably more expensive to run than gas. In addition, the replacement of the old system and installation of a new one could represent an important upfront cost. If you are already going to do mayor house renovations, adding retrofitting to the mix sounds sensible, but it will increase the bill even more. Most experts agree that the system will pay for itself in less than a decade, but not everyone has that level of cash available.

How can we make it happen?

A key issue here is to make low-carbon heating solutions more economically competitive. One part of this is to produce more clean electricity in a cheaper way, which is a big challenge in its own right (we have looked into how to make electricity more competitive in this CEP policy brief). Another part of the issue is to make the low-carbon technologies, such as heat pumps, more appealing to the public. As the market grows, new skills and supply chains will be developed, and the consumer will benefit from competition and economies of scale. However, we need to create/grow that market first.

Looking into examples from renewable technologies, we see various mechanisms that promote its rollout. Subsidies, tax breaks, 0% (or very cheap) loans, etc. have been effective to promote low-carbon technologies around the world. In the case of the UK, feed-in tariffs have created an important boost in the rollout of PV systems, and when the feed-in tariff was announced to be ending, the installation of new PV capacity slowed down considerably.

The target of these mechanisms and the way to financing them is of extreme importance, as they can become ‘regressive’ policies, where the lower-income households subside the higher-income ones. For instance, if increasing energy prices is the way to finance the new technologies, those in fuel poverty would find it even harder to heat their home and they might not even benefit from the low-carbon systems which they are indirectly financing. Therefore, a ‘just transition’ should be in the core of any policy.

Join us at our next Energy Conversation

We invite you to join a discussion about the alternatives, and whether people are ready to swap their gas boilers to low-carbon solutions. Join us at our next Energy Conversation as we explore:

• What does a move away from gas mean for households in terms of comfort and efficiency?
• What are the cost implications and how does the public perceive these costs?
• What are the barriers to making these changes and how can they be overcome?
• What role can local and national government play in supporting the transition?

Free registration here.

Dr Christian Calvillo Research Associate, Centre for Energy Policy christian.calvillo@strath.ac.uk  @chris_calvillo