Trade body suggests delaying Future Homes Standard to 2028

The Independent Networks Association (INA) has called for the implementation of the Future Homes Standard to be coordinated with planning and regulatory milestones for electricity and gas networks.

Executive director Nicola Pitts said it should possibly be delayed until the end of the RIIO2 price controls for electricity distribution in 2028, giving distribution network operators (DNOs) time to complete vital work to establish how flexibility from heat pumps can be used to reduce their impact on the power grid.

Pitts was commenting on a report on the Future Homes Standard the INA commissioned from EY, which described the standard announced by the government in March 2019 as a “fabric plus technology” policy, requiring all new homes to be built with a high level of energy efficiency and low-carbon heating systems, primarily heat pumps.

The report said DNOs are working to understand how demand from heat pumps and electric vehicles can be time-shifted using smart technology “so they are not simply stacked on top of each other but have a diversity of the occurrence,” but added: “This will require time to complete.”

It continued: “The 2025 implementation date for the Future Homes Standard is out of step with key upcoming reforms to how the electricity distribution networks will be managed and charged for, jeopardising the success of the ramp-up of heat pumps. Implementing the Future Homes Standard in 2028 would allow the load diversity work to be completed and fully embedded in network planning custom and practice.”

Furthermore, EY said the Future Homes Standard “essentially narrows the choice of heating systems to heat pumps” and that “care must be taken not to choose a technology too early”. It said the results from key trials of hydrogen networks and heating would not be known until after the standard is implemented, meaning “a growing number of homes from 2025 would be unable to take advantage of hydrogen or other low-carbon gaseous fuels as they become available.”

The report also highlighted other concerns over the planned timetable, noting that a consultation on the fabric specifications for buildings is not scheduled to take place until spring 2023, meaning housebuilders may not find out the “exact recipe” until late 2023 or early 2024.

It said putting in place a robust supply chain during the intervening period will be “challenging” and warned that any delay to the legislation underpinning the standard, which is due to be presented to parliament in 2024, could also put its implementation at risk.

EY said if the standard is to be introduced in 2025, then the government should consider a revised timetable so detailed specifications are made available by 2023.

It similarly raised concerns over the supply chain for heat pumps, which will need to “ramp up rapidly” if the government is to meet its target of building 300,000 new homes per year by 2025.

The company said less than 34,000 heat pumps were installed in 2019, with more than two thirds being imported, mainly from Asia. It said building a new factory for heat pumps will take 24 to 36 months, meaning support schemes must be put in place “as soon as possible” if the UK is avoid relying on global production capacity.

However, the report said deployment is more likely to be constrained by a lack of qualified installers, of which there are currently estimated to be 1,200 in the UK. It said “immediate action” is required to train the nearly 10,000 installers which the Heat Pumps Association estimates would be needed by 2025.

“The current timetable on the Future Homes Standard will not create clarity until 2024, to be implemented in 2025,” Pitts told Utility Week.

“This is too late to feed into lead times for achieving planning, housebuilding and creating the supply chains necessary to start delivering homes in 2025.  From an energy perspective, it is also too late to fully feed into the electricity distribution price controls where business plans submitted to Ofgem will have a high degree of uncertainty.”

She said: “On the other hand, the Future Homes Standard being implemented in 2025 is too early for there to be more than one heating option to be offered to new house buyers.  The work BEIS is doing on the potential of hydrogen in the home will not deliver by 2025.  This will preclude new homes built in this period from having access to technologies such as hydrogen as it will not be economic to retrofit the connections after they have been built.

“Creating clarity on the Future Homes Standard sooner helps certainty and could contribute to our climate goals earlier.  Moving to a later implementation date helps practical delivery, costs and choices for consumers.”