Energy Crunch – Getting off Gas with Clean and Affordable Heat

With gas prices surging across the whole world, the benefits of using clean electricity for heating are growing by the day.

By Juliet Phillips

Senior Policy Adviser at E3G and Head of Policy, Electrify Heat

Gas costs soared in 2021 as the rebounding global economy drove up demand and, in Europe, Russia reduced supply. Experts forecast continued volatility and high prices for at least the next 18 months. The UK’s building stock – among a range of other factors – has left households particularly exposed. Over 84% of UK homes are connected to the fossil gas grid and our leaky buildings means we consume more energy than we ought to. While emergency support is, rightly, the Government’s current focus, longer-term, the energy crisis is concentrating minds on how we can create an affordable, resilient and Net-zero-emissions energy system and reduce our exposure to volatile gas markets. While there are no silver bullets, within this wider suite of solutions, there will be an important role for the affordable and efficient deployment of heat pumps.

Long-term benefits of heat pumps in a clean energy economy

    • An efficient and clean source of heat: Heat pumps run on electricity and are more than three times more efficient than gas boilers in their use of energy. Although electricity prices have also risen – 86% due to the increase in gas prices – electricity production from renewables has helped insulate the UK from the gas price increase and will keep doing so, in line with the UK’s target to decarbonise the electricity system by 2035.
    • Wider social and economic benefits: Beyond decarbonisation, the deployment of heat pumps offers the added benefits of increased safety by reducing gas leaks and fire hazards. At national level, the development of the heat pump market could unlock around £4.8bn, boosting manufacturing and supporting thousands of jobs along the way.
    • Health benefits: Unlike gas boilers, heat pumps do not create the air pollution that is an increasing risk to human health in homes and cities. In particular, there are no nitrous oxide emissions which can contribute to respiratory and cardiovascular diseases.

Steps to pave the way for long-term deployment of a mass market for heat pumps

    1. Moving legacy policy costs from electricity bills into general government spending will reduce running costs for affordable electric heat. This is because policy costs are heavily placed on to electricity bills. It will be important to maintain funding support levels for schemes focussed on supporting those at risk of fuel poverty to help ensure a fair transition as heat decarbonisation progresses. Over time, reforms to fuel poverty funding schemes such as the Energy Company Obligation could help to support efficient and affordable clean heat for low-income homes.
    2. Ensure good green jobs in clean heat, with skills and training; supporting 25,000 installers by 2025: A focus on affordable and attractive retraining packages can ensure a smooth transition for those currently working on gas networks and gas boilers. Apprenticeships and training packages can help ramp up the UK’s heat pump market and create thousands of new jobs across the supply chain, from manufacturing to installation.
    3. Support consumers to make the right choices with public engagement and tailored advice: The clean heat transition cannot take place without consumers being aware and well-informed on the topic, overcoming the current barriers of low levels of awareness. Independent, tailored and accessible advice will be needed to help people make the right decisions to heat their homes efficiently and affordably – with the energy crisis and rising bills making this even more prudent.
    4. Making the transition to clean heat affordable and attractive for all: Low income and fuel poor homes should be positioned to benefit from the clean heat transition, receiving sufficient financial and non-financial support. For other households, incentives, attractive green finance options and the deployment of innovative new business models will support an affordable transition.

This blog does not necessarily reflect the priorities of all Electrify Heat members. For more detailed recommendations, please see our recent briefing: Training, Trust and Tariffs: Electrify Heat’s priorities to boost the heat pump market