Heating in the UK in 2030–35

One of the biggest questions in UK energy policy at the moment is how we will decarbonise heating, which currently represents 45% of the UK’s energy use and a third of greenhouse gas emissions (p15, Carbon Connect, 2019). It is a question that I’ve spent a lot of time thinking and talking to people about, so I thought it might be worth sharing my current thoughts. I’d warn that there are a lot of different opinions in the industry about what should and will happen, so my suggestions may prove wide of the mark. Also, the government is expected to produce a ‘heat policy roadmap’ by the end of 2020, which may provide further insights.

How do we heat now?

Essentially, there are currently seven methods being used to heat space and water, in decreasing order of prevalence (p19, Carbon Connect, 2019):

  1. Pure gas heating — ie using gas to heat up a tank of hot water, which can go to radiators — this makes up over 80% of homes
  2. Storage electric (storage heaters and hot water tanks) — using electricity overnight to heat a thermal store (generally a brick) and a tank of hot water
  3. Oil/LPG/biomass heating — common in parts of the country without connection to the gas mains
  4. Non-storage electric (electric radiators and instant showers) — these use electricity when heating is needed
  5. District heating — hot water is produced centrally, and transmitted to homes for heating or hot water
  6. Heat pumps (air and ground source) — these are newer, and much more efficient than storage heaters, because they transport heat into the home from outside or underground. They require a well-insulated home.
  7. Hybrid heat pumps (gas and heat pump) — these combine a heat pump with additional gas when it is cheaper or when extra heat is needed.

How will we heat in 2030–2035?

My prediction is quite unadventurous: I largely expect these 7 solutions to still dominate in 2030–2035, just the proportions will change. I expect a lot of people will never use gas/oil/LPG, and most of those that do will only use them occasionally, using electricity for the majority of their heating.

At the moment, electricity is a lot more expensive than gas and oil and LPG. Somewhat perversely, electricity prices include carbon taxes, despite being 50% zero-carbon, while retail gas and oil and LPG do not. Also, only about half the retail cost of electricity is actual electricity cost that goes up if you use more. This situation should be cleaned up. I believe it will happen at some point in the next 5 years (though this may be undue optimism). I expect an increasing carbon tax to be applied to retail gas, oil and LPG use. And I expect the typical price of electricity to come down.

This will give households an incentive to use less gas, which will mean that costs of maintaining the gas distribution network will be recovered from shrinking volumes, further increasing the per kWh charges, and further reducing gas use. To the extent that gas distribution network costs are recovered from a standing charge, I expect customers will choose to disconnect from the gas network.

Most of the time, I expect this will be fine. We will have growing PV and wind generation, and batteries and smart-charged electric vehicles helping to manage day to day fluctuations in renewable generation and demand. Yes, we will need to invest in our electricity distribution network, but we will have to do it for electricity vehicles and distributed generation anyway.

The big challenges of using electricity to heat is that most heating demand is in winter, and we don’t have enough electricity generation capacity to meet that demand. Solar PV doesn’t produce much electricity in winter, and wind can be unreliable. Maybe we will have plenty of long-duration electricity storage, but I wouldn’t want to count on it. So, I expect we will reach a situation where every year, there will be 2–4 weeks that are cold and windless where we’d struggle to meet all our heating needs using electricity. In this case, I expect electricity prices to rise to very high levels, sending a signal to industrial consumers to reduce their demand, and to customers that did still have the ability to heat with other fuels. This would make the electricity available to others that needed it. I think we’d be ok, but we would need to ensure a safety net to ensure the vulnerable could afford the heat they needed in winter.

At the moment district heat networks provide a much smaller proportion of heating in the UK than other European countries. In some cases, I think they would make sense — especially where there are local heat sources (for example geothermal or waste heat). And I like the idea of district heat networks being able to optimise between electricity and other fuels depending on prices. But I don’t expect we will ever get more than 10–20% of people getting their heat from a heat network.

My guess is that as we get to 2035, and even to 2040, almost everyone not on a district heat network will have chosen to switch to a fully electric option (2, 4 or 6 above). For anyone in a new or well-insulated home, a heat pump should be the obvious choice. For anyone else, they can use storage or non-storage heating, either of which will cost a lot less to install but more to run.

What policies might get us to this point?

I would recommend a number of policies to enable a smooth transition to this point:

  • Increase deployment of solar and wind generation and batteries
  • Add a carbon tax to retail gas, oil and LPG to remove their artificial advantage over electricity. Potentially remove charges from electricity bills that are not cost-reflective.
  • Support to the financially vulnerable to ensure they get the necessary heating
  • Financial and informational support to help people make switches that are sensible for them
  • Remove heritage and council restrictions that prevent people from improving their home’s heat efficiency
  • Encourage smart technologies and tariffs that reduce the cost of heating with electricity

What about hydrogen?

There has been a lot of talk about sending converting the gas grid to hydrogen, but I am unconvinced. Once you take into account the cost of carbon capture and storage, hydrogen produced from natural gas will cost a lot more than electricity most of the time. Likewise, hydrogen produced from electrolysis will cost more than electricity. Given that, I’m not sure that you’d want to spend the money switching the gas grid and people’s appliances to hydrogen, for the small proportion of hydrogen that would actually be used for heating. (I also worry about the public response the first time there is an accident with someone’s hydrogen appliance.)

I do see a better case for hydrogen in district heating networks, where the same site could produce, store and burn the hydrogen. And I see a good case for hydrogen for certain industrial and transport applications.

More Reading

Carbon Connect, 2019, https://www.policyconnect.org.uk/cc/sites/site_cc/files/report/730/fieldreportdownload/uncomfortablehometruthsfuturegasseriespart3.pdf

National Infrastructure Commission, 2018, https://www.nic.org.uk/wp-content/uploads/Element-Energy-and-E4techCost-analysis-of-future-heat-infrastructure-Final.pdf

Article by Richard Lowes, Exeter Energy Policy Group, August 2019, http://blogs.exeter.ac.uk/energy/2019/08/09/a-heat-and-buildings-decarbonisation-policy-framework-for-a-zero-carbon-uk/

UKERC Review of Energy Policy 2019, p8–9, http://www.ukerc.ac.uk/publications/rep19.html

Fascinated by what makes societies and markets work, especially in sustainable energy. http://guylipman.com.