Hybrid heating systems could save £200bn from net zero bill

Managing ‘peak heat’ is the biggest innovation challenge on the path to net zero, according to new decarbonisation modelling from Energy Systems Catapult (ESC).

As a result, the organisation has urged government to explore the use of hybrid heating systems – combining heat pumps and natural gas – in the energy transition. However, it also caveats that hybrid heating systems may not be suitable for all properties, for example because of space constraints.

The ESC said all its scenarios show most domestic heat being provided by heat pumps and pointed for the potential for district heat networks to provide up to 29% of space heating and hot water demand by 2050. Its new report says it is “unlikely that hydrogen will play any significant role in heating buildings in the future”, except in communities close to industrial clusters.

However, the report warns that the electrification of heat could pose challenges around meeting demand at peak times, citing the ‘Beast from the East’ storms in 2018, which saw gas heating demand rise by 50%. Therefore the report poses multi-vector heating systems as a subject worthy of consideration.

The Catapult’s modelling suggests that the removal of all hybrid systems could increase the total system costs of reaching net zero by up to 7%, equivalent to £200 billion. The report goes on to say this cost, while “meaningful”, could be seen as “worth the avoided challenges associated with making these systems work for net zero, such as ensuring the safety of an extensive gas system that is increasingly rarely used, ownership and regulation of gas infrastructure, and managing in-home operation of hybrid systems”.

The report suggests there may be innovative alternative approaches not yet realised that could better mitigate challenges around peak heat, such as local combined heat and power (CHP) systems, gas driven heat pumps or the use of gas bottles post- 2050 for the 1-in-20 peak events instead of maintaining large parts of the gas network.

While the report stresses the continued need for natural gas in the energy transition, it states “a transition away from natural gas must be actively planned and managed over the coming decades”.

The suggestions form part of ESC’s Innovating to Net Zero 2024 report, its second “state of energy innovation” review, based on 3,600 different pathways to net zero in 2050.

The headline recommendations from the report are that an urgent acceleration of pace is needed both in the deployment of mature technologies and innovation around novel solutions, notably small modular reactors, long duration energy storage and bioenergy with carbon capture (BECCS).

ESC chief executive Guy Newey told Utility Week that “progress over the next five to ten years is absolutely essential” on both these fronts. He added: “If we’re sat here in 2035 having the same discussions, even we, who are as techno-optimistic as you can  be, would say ‘you’re out of time’.”

If a proactive approach is taken, ESC estimates the cost of net zero is still within 1% of GDP by 2050. This is equivalent to £16 billion per year in capital from the public and private sectors, adding up to £600 billion in total system costs over the next 25 years (in 2020 values). The report says this is roughly 9% more than would have to be spent on the energy system by 2050 without a net zero target.

Newy said: “2050 is just 308 months away and while the path to net zero has narrowed, innovations in mature and novel clean tech gives us cause for optimism. Our modelling has demonstrated that we have credible pathways to net zero available to us. But we need to accelerate the pace and scale of deployment to levels not yet seen. There has never been a more exciting time to be a clean tech innovator, it will take unparalleled levels of innovation, combined with targeted investment to make net zero a reality.”

He added that innovation would also be needed in consumer-facing products and services to make low-carbon options a desirable choice for households and businesses. He added: “If we fail to take consumers along the journey with us, net zero will not happen.”

The report also calls for greater focus on the delivery of new energy network infrastructure, including integrating decisions across statutory bodies with responsibility for air, land, water, agriculture, transport, digital and telecoms.