Topic: Is renewable heat the missing piece of the low-carbon jigsaw?

After years of political wrangling and the laying of landmark legislation, the UK should by now be hitting its stride on plans to decarbonise the energy sector. However, in reality only half the problem has been tackled so far.

The UK has a low-carbon plan to keep the lights on, but how does it plan to cut carbon while keeping radiators warm?

The Department of Energy and Climate Change (Decc) has taken tentative first steps towards tapping the potential of district heating as well as the wide-scale roll out of water source heat pumps. But without a clear overarching policy on decarbonising the heat sector, the future is unclear.

It is a problem that has so far has been largely overlooked. Although heat accounts for almost half of the UK’s total energy demand, to date the main thrust of government policy has focused on securing electricity generation capacity.

Electricity Market Reform (EMR) focused on generation through a tried and tested approach: get big energy companies to invest even larger sums in enough new capacity to plug the gap. But tackling the problem of heat will require a different approach that is both locally focused and user-oriented. It is an altogether new policy-making challenge for government.

However, the need to meet this challenge head on is becoming increasingly apparent.

The central concerns in the heating sector play straight to the heart of the energy trilemma, encompassing carbon intensity, supply and cost.

Heating is carbon-intensive, with more than 80 per cent of residential users relying on gas heating for warmth. And as the UK’s gas resources dwindle, imports have swelled to around 50 per cent, leaving the country increasingly exposed to volitility. Consumer champion Which? reported last year that among household customers, 41 per cent worry about how to heat their home in winter. Perhaps with good reason: the government’s own data shows that over the past ten years gas costs have risen by 50 per cent for the average household and 60 per cent for business users.

For those living in fuel poverty, the energy inefficiency of old housing, combined with rising costs, means adequate access to heat supply is effectively out of reach.

Government is taking action to counter this problem. Alongside its ongoing support for renewable heat through its Renewable Heat Incentive (RHI), the government announced in March a new drive to tap as much as 6GW of water-sourced heat. The announcement came with the release of an interactive map to provide developers and homeowners with information on the potential heat capacity of each waterway and the levels of heat demand across England.

In addition, this year the government made available £7 million through a competition to boost innovation in the heat industry and made £25 million available to the Central Heating Fund.

But although domestic space heating accounts for 80 per cent of heat demand in the UK, this is not the whole picture. An important 20 per cent of heat is required for high temperature industrial processes. Finding an effective way to decarbonise this without unacceptable damage to competitiveness presents a particular challenge to policymakers and one that has yet to be resolved.

Support for combined heat and power via tax incentives has been welcomed by industry in the past, but this system is in the throes of change – transitioning to support via a combination of Renewables Obligation and RHI mechanisms – which is never helpful for investor confidence.

Read on for more insight into the future of UK heat policy and technology.

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