Weekend press round-up: Boiler manufacturers to be pushed to start mainstream production of heat pumps

In our latest review of sector coverage in the national newspapers, there is further speculation about measures to be included in the Heat and Buildings Strategy. Meanwhile, energy suppliers have begun increasing bills after the price cap rise and scepticism is expressed about the impact of energy efficiency measures on house prices.

Boiler manufacturers to be pushed to start mainstream production of heat pumps

Boiler manufacturers will be required to speed up production of green alternatives, under Government plans to meet Britain’s net zero target, The Telegraph can disclose.

The Heat and Building Strategy is expected to set out proposals for an obligation on gas boiler firms to sell rising numbers of electric heat pumps over the next seven years.

The proposed regulations are intended to “kick-start” the mainstream production and purchase of heat pumps, helping the Government meet its target of seeing 600,000 of the devices installed per year by 2028 – up from 30,000 now.

The Government wants to end gas boiler installations from around 2035, to cut the 14 per cent of UK emissions that come from home heating.

Last week, in an interview with The Telegraph, Kwasi Kwarteng, the Business and Energy Secretary, admitted that heat pumps were currently inferior to traditional boilers, albeit not “much worse”.

The planned obligation for boiler manufacturers is intended to help speed up the process of making heat pumps “better and more cost effective”, so they become an “obvious consumer choice” by 2035, according to one Whitehall source.

The proposal suggests that ministers increasingly view obligations imposed on industry as a key part of delivering their plan to reduce net greenhouse gas emissions to zero by 2050. Last month, the Government’s Decarbonising Transport strategy set out plans for a “mandate” that would require vehicle manufacturers to sell a certain proportion of zero emission vehicles.

Under the proposals, sales targets would be set under a credits scheme, under which manufacturers would earn points for selling fully electric vehicles and could buy excess credits from other firms that have “over-performed” against their own targets.

The Heat and Building Strategy is due to be published next month, after delays caused by wrangling in Whitehall over how to fund the domestic transition away from fossil fuels.

At the same time as requiring boiler manufacturers to sell a certain proportion of heat pumps, the Government is expected to increase demand for the equipment by banning the installation of gas-only boilers in new homes from 2025, and offering grants to poorer households.

Daily Telegraph

Energy firms begin increasing bills after price cap increase

Energy firms have begun hiking bills for customers after the regulator raised the energy price cap earlier this month (as Utility Week reported earlier this month )

The price cap, which sets upper limits on how much firms can charge customers on standard variable tariffs, was increased by £139 to £1,277 after wholesale gas prices soared.

EDF has announced it will raise bills by an average of 12.24pc, which will see its average annual cost go from around £1,138 to £1,277.

Meanwhile, SSE has announced similar changes, with its average annual cost rising from around £1,137 to £1,276, an increase of £140. Both changes will take place from 1 October.

Gareth Kloet of Go Compare Energy, the comparison site, said: “This isn’t an unexpected move and unfortunately won’t be the last increase we will see this autumn.

“With both SSE and EDF increasing their prices to match the Ofgem price cap, it’s likely that we will see more of the same from the other providers yet to announce their updated prices.”

The price cap was introduced in 2019 in response to widespread accusations of overcharging in the energy sector, with estimates it would save households between £75 and £100.

It is now at its highest point since it was introduced. The latest rise will mean around 11 million households will see their bills increase.

An SSE spokesman said: “We’d advise customers to switch to a fixed price tariff which gives the customer added peace of mind that their unit rate and standing charges are protected against potential price increases.

“As part of the communication to customers going out this week we outline the cheaper fixed tariffs available.”

EDF’s Philippe Commaret, said: “We know a price rise is never welcome, especially in tough times. In 2020, prices for our standard variable customers fell by an average of £100 a year, and we’ll cut prices again as soon as we’re able.

“As Ofgem has explained, it is global gas prices that have caused the unprecedented increase in wholesale energy costs and as a sustainable, long-term business we must reflect the costs we face.”

Daily Telegraph

Stefano Buono’s Newcleo wins backing for AMR nuclear reactor

An Italian physicist and entrepreneur has raised $118 million to develop a new type of nuclear power technology that he claims will be safer, cleaner and cheaper than existing reactors.

Stefano Buono’s new company Newcleo, which is incorporated in London, aims initially to develop small 20MW reactors that could be used to power ships or islands. Within a decade it aims to develop 200MW versions that could supply national power grids.

Buono, who worked at Cern, the European nuclear research organisation, made his name as the founder of Advanced Accelerator Applications, a nuclear medicine company that listed on Nasdaq and was sold to Novartis for $3.9 billion in 2018, netting him a $200 million fortune.

He has invested $10 million in Newcleo and retains a 10 per cent stake after the founding capital raise, which has attracted external investors including Exor, the holding company controlled by the Agnelli family, and Ian Lundin, chairman of Lundin Energy.

The Times

Green homes worth just 2pc more

Burnishing your home’s green credentials adds less than 2pc to its price tag, new research has found.

Energy efficiency improvements are currently having limited impact on house prices, despite the Government’s push to go green.

Decarbonising and adapting housing stock is critical if Britain is to meet its 2050 emissions targets, especially given that homes account for about 15pc of the UK’s total carbon emissions.

A greener home attracted a modest premium of 1.7pc for an owner occupier property rated A or B compared to a D-rated home.

Properties rated F or G attract a 3.5pc discount compared to a similar D-rated property, Nationwide said.

Andrew Harvey, Nationwide’s senior economist, said: “Overall, our research suggests that, for now at least, energy efficiency has only a modest influence on house prices for owners, where an impact is only really evident for the best and worst energy efficiency ratings.

“However, the value that people attach to energy efficiency is likely to change over time, especially if the Government takes measures to incentivise greater energy efficiency in future to help ensure the UK meets its climate change obligations.”

Daily Telegraph

Nicola Sturgeon sets out duties of UK’s first Green ministers

Nicola Sturgeon has set out the responsibilities of her first Green ministers while putting them under the watchful eye of trusted cabinet allies.

The First Minister said Patrick Harvie would be Minister for Zero Carbon Buildings, Active Travel and Tenants’ Rights, while Lorna Slater will be Minister for Green Skills, Circular Economy and Biodiversity.

Mr Harvie will be one of three ministers working under Ms Sturgeon’s close friend Shona Robison, the Social Justice and Housing Secretary.

While Ms Slater will be one of four ministers under Finance and Economy Secretary Kate Forbes.

The Scottish Green co-leaders, the first Green ministers anywhere in the UK, will both also work with the Net Zero, Energy and Transport Secretary Michael Matheson.

The appointments are subject to a vote in Holyrood and formal acceptance by the Queen.

Mr Harvie’s responsibilities include driving policy changes shifting Scotland away from high polluting transport and heating towards greener alternatives, an essential part of the push towards a net zero economy by 2045.

He will also lead on delivering a “new deal for tenants”, and ensure building standards are fit for purpose, potentially drawing him into the vexed row over replacing building cladding post-Grenfell.

The Government said Ms Slater would drive a “Green Industrial Strategy”, helping people access training and opportunities as part of a net zero Scotland.

Her role will also include supporting biodiversity, protecting national parks and natural heritage, working with NatureScot and Zero Waste Scotland, and supporting the development of a circular economy that minimises the impact on our natural environment.

The Herald

Dilemma over new North Sea projects

Oil and gas companies are expected to seek permission for 16 projects to develop new North Sea production in the next three years despite concerns over climate change, according to new analysis.

The International Energy Agency said in May that no new oil and gas fields should be developed globally from this year if the world is to hit its “net zero” climate goals.

Political controversy is raging over the Cambo field, a huge proposed new oil development by Siccar Point and Royal Dutch Shell to the West of Shetland. The Labour leader, Sir Keir Starmer, has said it would “give off completely the wrong signal” to approve Cambo as Britain prepares to host the Cop26 climate summit.

Analysis by Westwood Global Energy Group finds that Cambo is one of 16 North Sea oil and gas discoveries that it expects companies to sanction for development by 2023. All are subject to approval by regulators and formal sign-off by the government.

Yvonne Telford, senior analyst at the research and consultancy group, told The Times that these projects contained the equivalent of 730 million barrels of oil in recoverable oil and gas resources.

About two-thirds of this would come from two projects: Cambo and Rosebank, an even larger proposed oil field nearby, on which Equinor, the Norwegian state oil giant, says it aims to take a final investment decision by May 2022. Like Cambo, Rosebank would be a standalone new project using a floating production, storage and offloading vessel.

The remaining 14 discoveries, which include Shell’s Jackdaw and BP’s Murlach projects, were “small incremental tie-backs to existing infrastructure” and therefore likely to attract less scrutiny, Telford said.

However the 14 projects would together still add new production equivalent to more than 250 million barrels of oil.

The Times

Utility Week’s weekend press round-up is a curation of articles in the national newspapers relating to the energy and water sector. The views expressed are not those of Utility Week or Faversham House.