Too hot to handle | Labour’s heat conundrums

Home heating is clearly a topic that is too hot to handle for the main parties vying for votes in next week’s election. Both the Conservatives and Labour have pledged in their manifestos near identical pledges not to “rip out your boiler”. However, shadow energy secretary Ed Miliband has indicated that Labour could take a different approach to increasing public uptake of heat pumps. David Blackman reports. 

Ed Miliband, widely expected to be the new energy security and net zero secretary in just over a week, has finally offered a glimpse into Labour’s thinking when it comes to home heating.

With little given away in the party’s manifesto, Miliband’s interview with the Sunday Telegraph last weekend gave a brief insight into Labour’s approach to heat.

First of all, Miliband doubled down on the pledge not to “rip out your boiler”. He also said that Labour would ditch the current government commitment to end the sale of new gas boilers by 2035.

Instead, he indicated that rather than regulatory sticks Labour would focus on financial incentives to encourage uptake of heat pumps.

Tara Singh, former Number 10 special adviser for energy and climate during the coalition government, sees Labour’s stance as an attempt to mitigate Tory attacks on the party’s wider 2030 push to decarbonise the grid.

Boiler ban

Last September, Rishi Sunak announced that around one-fifth of homes would no longer have to meet the 2035 boiler ban as part of a wider backtrack on net zero measures.

Since then, the prime minister has attempted to paint the Conservatives as the financially stretched consumer’s friend by opposing potentially costly green measures that it claims Labour would introduce.

However, while Labour has said it would reverse other moves in Sunak’s September package, it has not taken the bait on home heating by coming out against the government’s announcement.

Richard Lowes, senior associate at The Regulatory Assistance Project NGO, believes that the manifesto promises not to rip out boilers are largely confected.

No plans existed to “rip out” boilers during the upcoming Parliament, which could run until 2029, he says: “It was never part of any strategy or policy. under discussion.

“It’s not a real line: it was trying to create an argument.”

Mike Foster, chief executive of the Energy and Utilities Alliance, sees the emergence of a consensus on home heating in the manifestos rather than a dividing line on the issue.

“Both of the main parties said a very similar thing. What might appear quite a bland statement has huge significance in terms of the ramifications for how you deliver clean heat.

“You either accept the fact that you are going to burn natural gas and find another way of getting rid of the carbon emissions or you go down the route of a decarbonised gas. Those are the only options in town.

“Otherwise, you’re breaking the manifesto commitment and as a recovering politician, nobody knowingly wants to break a manifesto commitment because it undermines faith in everything else that you promised,” says the former Labour MP.

In addition, he points out that Labour’s manifesto referred to ‘low carbon heating’ technologies, not just heat pumps. This could include heat networks and hydrogen boilers, he says: “In many ways it’s the status quo.”

Lowes agrees with Singh that Labour’s commitment not to rip out boilers is “purely defensive”.

But while there are “good snippets” in the Labour manifesto, such as the commitment to ‘minimum’ energy efficiency standards in the private rented sector, he is “disappointed” by the line on not ripping out boilers.

“It didn’t need to be in there because it wasn’t a thing anyway,” he said.

“There was no real leadership in the Labour manifesto, which is very, very passive and business as usual.”

He added: “Unfortunately, that doesn’t work. We haven’t got time for passive and business as usual. What needs to happen and is directly implied by both the manifestos of Labour and the Tories, who both have signed up to net zero by 2050 and meeting climate change budgets, is a transformation and it needs leadership.

“If we’re going to meet the goals that both Labour and the Tories have said that they want to meet, a lot of stuff has to happen quite quickly.”

Carrots vs sticks

The Climate Change Committee (CCC), in its 2020 advice setting out the measures required to meet the sixth carbon budget that will cover the mid-2030s, stated that the UK must be fitting 1 million heat pumps by the end of the current decade. This is an even more stretching than the government’s target of 600,000 heat pump installations by 2028.

Lowes points out that Labour’s manifesto includes an “implicitly transformative” commitment to meeting the UK’s emissions reduction targets, which of course Miliband had a hand in shaping in his previous incarnation as secretary of state for energy and climate change in the late Noughties.

Miliband’s interview shows that Labour is putting its faith in using carrots to encourage the uptake of heat pumps, praising the government’s recent decision to increase the level of grants available under the Boiler Upgrade Scheme (BUS) to £7,500.

And the shadow energy secretary praised the government’s Clean Heat Market Mechanism (CHMM), which sets targets for boiler manufacturers to sell heat pumps, in a recent speech to the Green Alliance umbrella body of environmental organisations.

However the Energy Systems Catapult, in written evidence submitted to the House of Commons energy security and net zero committee before Parliament was dissolved, criticised reliance on such ‘supply push’ interventions.

It said that “prescriptive technology-specific interventions”, like the CHMM and subsidies like the BUS, are “insufficient to drive the scale of investment and innovation required to build supply chains to decarbonise the UK’s circa 30 million domestic properties”.

All eyes on 2026

And Labour’s ability to splash the cash on building decarbonisation has been severely constrained by the decision earlier this year to slash its green investment programme from £28 billion per annum to £23 billion over five years.

An industry source, who liaises with Miliband’s team, says: “Through the green prosperity plan, they were going to have a lot of money to play with.” Having this pot of cash would have made it “much easier” to bring forward a decision on whether to rule out hydrogen in home heating from the current 2026 date, he adds.

Labour could have pointed to the “large pool of government money” available for helping people switching from traditional boilers, he says: “The difficulty now is that pot of money is considerably reduced.”

But he has little doubt that Miliband and his team are in the hydrogen home heating camp. “It makes it (the 2026 decision) harder that there’s less money available but they have to make it by 2026. They’re not going to make it in favour of hydrogen, the question is how long they take.”

A further factor potentially complicating any move to speed up this decision, which many heat pump advocates have called for following the cancellation and shelving of a series of hydrogen heating trials, is understood to be civil service concerns that the absence of evidence from such exercises may leave the government open to a judicial review (JR) by disgruntled gas companies.

But Chris Galpin, policy advisor of the UK energy team at climate thinktank E3G, doesn’t see a potential JR as “a major risk”.

The government would be “fairly safe” in the event of a potential JR, he says, pointing to the “wealth of evidence” that already exists, such as the fact that there was not enough hydrogen production to deliver the Redcar trial. “If you’re the new government and you’re going to make that decision, you want to be on the front foot setting out what happens next.”

But Bean Beanland, director for growth & external affairs at the Heat Pump Federation, says the magnitude of the decision on the future of home heating means that it will have to go through “multiple layers” of consultation, making a pre-2026 verdict unlikely.

Prior to the dissolution of Parliament, the government was due to conduct initial stage consultation on how the 2026 decision would be made, he says: “Given the timing of the election and everything else, the industry is resigned to the fact that we’re going to have the spectre of hydrogen hovering over us for another couple of years but so be it.”

Rebalancing costs

More important than the straight hydrogen v heat pumps choice is a decision on rebalancing policy costs between electricity and gas, Beanland says: “If we were to get movement on the price of electricity, then the issue around hydrogen starts to become much more of a moot point.”

Proposals on this issue were understood to be on the verge of being published before the election, having already gone through the customary process of cross governmental consultation.

Labour’s pledge for “lower bills for good from a zero-carbon electricity system” may point towards a discussion on shifting policy onto gas, says Lowes: “It gives them room to rebalance costs between gas and electricity.”

But this is just one of the tricky decisions that will be waiting in the in-tray of whoever enters government at the start of July, says Gilpin: “They will inherit a lot of decisions they could make quite quickly like the Future Homes Standard and Clean Heat Market Mechanism.

“They will want to get some of those out of the way quickly to clear the decks.”

The growing question marks over hydrogen mean though that the government will need to take a fresh look at its longer-term heat strategy, he says: “Enough pieces have been taken out of the 2021 Heat and Buildings Strategy that it is no longer really coherent.”

And that implies, the need for some “serious thinking” about the potentially “difficult realities” surrounding the future of the gas network, Gilpin says:

“People have talked about this strategic decision in general terms, rather than talking about, what specifically that means for different parts of the energy system and different consumers. The next government will need to get into that level of detail.”