The Fifth Carbon Budget & Domestic Heating
By Paul Homewood
Buildings account for 34% of the UK’s emissions on GHG, including their share of grid electricity. Much of this is for heating and presents a huge challenge if decarbonisation targets are to be met.
This is what the Committee on Climate Change, (CCC), has to say about it:
Emissions have declined slowly in recent years, largely because of better energy efficiency, but this most of this low hanging fruit has now been picked. (The sharp fall in 2014 is mainly weather related).
And forward baseline projections, ie assuming no further policy actions, suggest emissions will start to rise again, as population increases.
Although they talk of heat networks, it is only heat pump technology which currently offers the scale necessary to hit targets. But there is a very big problem with heat pumps, and that is the cost. This is what the CCC says:
It is not clear where the average household is going to find £16k from, when their old boiler packs in, which might help explain why there are only 100,000 in the UK:
Notice that last sentence – along with support from Government to help overcome perception barriers and address the lack of carbon price signal. In other words, put a carbon tax on natural gas, so as to make heat pump technology more competitive.
We get a clue as to how much this might add to gas bills, in this graph of heating technologies for commercial buildings. Note that the CCC acknowledge that heat pumps are much more efficient in large, commercial buildings, due to economies of scale and their ability to double up for air conditioning.
The gas boiler costs rise from £44.86 to £65.42/MWh by 2030, a rise of 46%. Bear in mind that these are all at constant 2014 prices. By 2050 they have risen to £98.35.
Even then gas heating is still cheaper than ground based heat pumps.
Even the CCC recognise that heat pumps are a very expensive way to reduce CO2, but are determined to push ahead in order to stay on track for 2050:
So how to address this dilemma?
As I have often pointed out, the government has three basic options – tax, subsidise or regulate. The CCC are thinking along the same lines!
I note that they present the oft quoted, but fallacious, argument that the revenue from a carbon tax can be used to offset other taxes. While this may be true in the short run, the whole point of a carbon tax is to eliminate the use of fossil fuels, at which time there will be no revenue to “redistribute”. Instead households will be stuck with the much more expensive low carbon alternatives.
Even the generous incentives previously available under RHI have had little effect, and the state of the public finances must mitigate against any more generous ones.
So don’t rule out regulation, for instance the banning of conventional boilers. Already regulations for the building of new homes, while offering better energy efficiency, have put up the cost of buying – just one more hidden cost of the Climate Change Act.
The Fifth Carbon Budget