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Decarbonising Heating Will Cost Us £28bn A Year

June 7, 2019

By Paul Homewood

https://www.theccc.org.uk/publication/net-zero-the-uks-contribution-to-stopping-global-warming/ 

I have now obtained some more detail from the Committee on Climate Change regarding their plans to decarbonise household heating, which are contained in their Net Zero document.

You may recall that they put a cost of £15bn a year on this:

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It now turns out that this figure is based on some extremely dodgy accounting, and that the true cost is in the order of at least £28bn a year, equivalent to over £1000 per household. But more on this later.

In simple terms, there are effectively two primary ways to decarbonise heating in homes:

1) Heat pumps, powered by renewable electricity

2) Hydrogen.

There is also a third way, called hybrid heat pumps, which combine the two together.

Conventional electric resistance heating is ruled out as it is far too expensive and would create insuperable problems for peak loading on the grid.

District heating may also be able to make a small contribution, but of course this is not zero carbon in reality.

It is worth pointing out that the CCC’s proposals for Net Zero would all be needed to hit the current target of an 80% cut in emissions by 2050, as far as decarbonising heating is concerned. The only exception would be heritage homes, which could not be readily converted.

According to the CCC, the total costs of the three scenarios are believed to be fairly similar. But let’s look at them individually:

Heat Pumps

The CCC’s Core Scenario (that is for the current 80% target) assumes that 17 million homes will be required to fit heat pumps. Under the Further Ambition scenario, (to achieve 100% decarbonisation), this figure rises to 19 million. Most of these would be air heat pumps.

The CCC’s costings for heat pumps are based on a study for BEIS in Dec 2017 by Element Energy here.

According to that study, an air source heat pump (ASHP) would cost £8975 to install, compared to £1570 for a conventional gas boiler. Note that the former includes the cost of replacement radiators, as existing ones are unlikely to be compatible. Also a hot water tank would need to be added.

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Significantly however, no allowance is made for the cost of extra insulation. It is generally accepted that heat pumps are ineffective without good insulation, which would likely cost thousands more.

 

Running costs for ASHPs are about £100 pa higher than the conventional boiler:

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Element Energy assume a life of 15 years, so given an APR of 5%, lifetime costs would look like this, excluding insulation:


Boiler ASHP
Capital Cost 1570 8975
Interest 589 3366
Fuel Costs 7770 9150
TOTAL 9929 21491

 

In other words, home owners would be £770 a year worse off.

The CCC acknowledge that full electrification of heating would cause problems for peak loading of the grid in winter.

As Element Energy pointed out in their report:

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The concept of hybrid heat pumps is that, while the heat pump provides low level heating, a gas boiler takes over for peak heating needs. This of course begs the question of what to do with the emissions from the gas!

The CCC’s solution is to use hydrogen instead.

Hydrogen

In their Hydrogen in a low-carbon economy report, the CCC have ruled out electrolysis playing any significant role in heating, due its high cost and lack of scale. [Most of the quotes and tables below come from this report, unless otherwise stated].

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Which leaves steam reforming. However this process also produces CO2:

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For it to be low carbon, CCS technology would need to be added. However, even CCS does not eliminate CO2 completely:

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Furthermore, steam reforming with CCS is a wasteful process as far as energy is concerned, so more gas would be needed to produce the same amount of energy than if it was burned directly in homes. Therefore the extra carbon dioxide emissions upstream also need to be taken into account.

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But what about the costs?

A national switchover to hydrogen would require conversion of household appliances and modification of mains networks. This is estimated to cost between £50 and 100bn.

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In addition, the cost of producing hydrogen from gas, and stripping out the carbon dioxide will naturally cost a lot more than burning the gas itself in homes.

The CCC put the wholesale cost of producing hydrogen at £44/MWh, ie excluding the cost of distribution.

The current price of natural gas used in these costings is assumed at 67p/therm, which equates to £23/MWh. In other words, the wasteful hydrogen production process adds £21/MWh to the cost.

Given average household consumption of 16000 KWh, gas bills would rise by £336 pa under this scenario. This would not include the £100bn needed for conversion.

Hybrid Heating

In reality, the CCC’s plan will require national rollouts of both heat pumps and hydrogen heating.

A “full hydrogen pathway” would need investment in massive amounts of steam reforming capacity, probably create  impossible demands on storage capacity,  and would also lock in large amounts of residual emissions.

On the other hand, full electrification would place impossible demands on the grid in cold weather.

Even the hybrid solution will pose mammoth problems for grid capacity and hydrogen infrastructure.

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Costs

Which brings us back to overall costs.

Let’s see what the CCC have estimated:

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So, £28bn a year. If we assume 25m homes on the gas grid, that equates to £1120 per household every year.

Just look as well at the last sentence:

These cost numbers assume a reduction in average household heating consumption from around 14 MWh per annum today to around 10 MWh per annum in 2050.

 

The CCC seems to have counted the savings from energy efficiency, but not included the cost of fitting insulation! So the real cost to householders will be greater still.

A reduction of 4 MWh would save about £200 per household. In other words, the true cost of decarbonising is not £1120, but £1320 per home.

All of this, according to the CCC, must start during the next decade, if 2050 targets are to met.

But if the extra cost is going to be £28bn a year, where did that headline figure of £15bn come from?

It turns out that the CCC have dishonestly offset the extra costs of heating against supposed non-heating energy efficiency savings we might be making by 2050:

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[The first box with 27 TWh relates to homes, and the 35 Twh is for non-residential.]

 

There is no guarantee that these energy savings will ever materialise. Nor is the extra cost included that we may have to pay to purchase such appliances.

But what we do know for sure is that the CCC’s plans to eliminate the use of natural gas for heating and cooking will cost all of us dear.

32 Comments
  1. Ian Magness permalink
    June 7, 2019 11:39 am

    Brilliant analysis, as ever, Paul. Whatever the real figures, we can be sure they will be worse than these.
    Could any of us, however, have made up this title:
    “Net Zero – the UK’s Contribution to Stopping Global Warming”
    It rather gives the game away – when the truth seeps out over the years the CCC and their chums can claim that they told us so.

    • Harry Passfield permalink
      June 7, 2019 12:10 pm

      Great spot! Says it all. Truly, an exercise in futility.

      As for costs, a friend of mine was recently quoted £19k for converting his oil-fired heating to ASHP.

      • HotScot permalink
        June 7, 2019 2:03 pm

        Harry

        I can confirm that £19k as I looked into it as well. It’s also a ‘starting from’ price for a fairly basic set up. £25k – £30k is more likely for a quality installation.

        But of course next to useless without an almost airtight, fully insulated house and underfloor heating.

        Properly insulated houses also require a mechanical ventilation system with high quality heat exchangers so you’re not just chucking all that valuable warm air out the house. Neglect that vital element and we will have an epidemic of respiratory conditions related to damp and mould.

        Our government just doesn’t have a clue. This is all very basic construction principles, nothing clever about it, but all very expensive.

    • NeilC permalink
      June 7, 2019 12:10 pm

      “Brilliant analysis, as ever, Paul. Whatever the real figures, we can be sure they will be worse than these.”

      I agree, it will be similar to the roll out of “smart meters” it will cost a fortune, probably wont work and for very little if any saving,

  2. June 7, 2019 11:41 am

    Reblogged this on Climate- Science.

  3. June 7, 2019 12:02 pm

    Chemistry geeks may want to reacquaint themselves with Graham’s Law of Effusion, which says (adapting to modern times) that hydrogen leaks like crazy, because lower molecular weight gases move faster than higher molecular weight ones, and no gas molecules have such a tiny weight as hydrogen.

    Natural gas already leaks a lot more than people think, as I found out when calling British Gas after smelling gas, it turned out that they had put in too much of the smelly additive, and had been swamped with leak reports.

    • June 8, 2019 9:40 pm

      The CCC report on hydrogen mentions leakage, but in a highly misleading fashion, for example it says that hydrogen COULD leak more than natural gas, when in fact it WILL leak a LOT more, because the average speed of the molecules is almost THREE times faster, so a simple geometrical factor makes the molecular rate of leakage almost THREE TIMES higher.

  4. NeilC permalink
    June 7, 2019 12:18 pm

    Why does the UK government adopt very expensive policies based on a supposed global problem, which we can do nothing about. Surely, our energy supply should be based on UK data.

    For the last 20+ years in the UK, the linear trend lines for temperature, wind speed, rainfall (value and duration), pressure, sunshine, and relative humidity have all been flat as pancakes. In other words the UK has had very stable weather conditions for over 20 years.

  5. Joe Public permalink
    June 7, 2019 12:23 pm

    All the figures mentioned revolve around annual consumptions etc. but using annual figures ignores the real challenges.

    No one has explained just how the differences shown in this brilliant animated graph by the UK Energy Research Centre will be met via electricity.

    The hourly data used for the comparison between gas and electricity in Great Britain vid shows the scale of the challenge and opportunities. ‘Local’ gas demand does not contain large industrial, large gas power stations, gas to storage or exports. However, UKERC fails to mention that 40% of that which their animations show electricity performing, is gas generated!

    The Key issues are meeting (additional electricity) peak hour, and 1-hour & 3-hour ramp rates:

  6. saparonia permalink
    June 7, 2019 12:38 pm

    I’m thinking that the whole carbon thing is an emotive description of using natural resources as people always have, and the public are being blackmailed into accepting nuclear. Is this what’s happening? I want to know.

    • Adam Gallon permalink
      June 7, 2019 1:17 pm

      Nuclear’s fine by me. The French have been using it for decades.

    • A C Osborn permalink
      June 7, 2019 2:56 pm

      No, they just want us to stop using anything.

      • Jonathan Martin permalink
        June 7, 2019 8:29 pm

        No mention of nuclear which is ultimately the only route to their decarbonisation dreams.

  7. Dave Ward permalink
    June 7, 2019 12:50 pm

    “Also a hot water tank would need to be added”

    Considering that the industry has been pushing towards “Combi” boilers, with no hot water storage tanks, that’s going to be a problem. Unlike older properties such as mine, virtually all modern homes are built without “Airing Cupboards”, so where are these tanks going to be put? And what about all the cold air being given off by millions of ASHP’s? The “Urban Heat Island” effect is well known – I suspect the reverse might occur, and outside temperatures in built up areas would become noticeably lower with heat pumps as the primary means of domestic heating. This would (unfortunately) mean people wanting even more from their heating systems, and so on! Ground source heat pumps are only practical with decent size gardens, so that rules out most new builds today…

    • Joe Public permalink
      June 7, 2019 2:17 pm

      Hi Dave

      “And what about all the cold air being given off by millions of ASHP’s? The “Urban Heat Island” effect is well known – I suspect the reverse might occur, and outside temperatures in built up areas would become noticeably lower with heat pumps as the primary means of domestic heating.”

      Heat pumps are net emitters of heat.

      That’s why you can leave your ‘fridge door open to warm your kitchen! (Presuming your fridge is in your kitchen)

      • Dave Ward permalink
        June 7, 2019 4:35 pm

        “Heat pumps are net emitters of heat”

        The usually quoted figures talk about 3kW of heat output for 1kW of electrical power used, virtually all of which is running the compressor. Even if this is mounted outside there will still be 3kW of heat being extracted from the air outside each property, so a net 2kW’s worth of cold adding to the already low temperatures. If the compressor is inside then all the 3kW’s worth of cold is pumped outside. At least, that’s my rather simplistic take on things!

        As for “Leaving the ‘fridge door open to warm your kitchen” – thanks for the suggestion, but with a motor rating of about 80 watts it’s going to take a mighty long time!

  8. Pancho Plail permalink
    June 7, 2019 12:58 pm

    It would be nice if all these reports added at the bottom a figure showing the impact of the measures on global temperatures, just so that we can see if we are getting value for money.
    So you spend countless billions on preventive measures and you get what – one hundredth of a degree reduction in the increase?

    • June 7, 2019 7:39 pm

      Not a bad guess I think, but a tad high.

      I’ve had a crack at the numbers and here’s the result. [These numbers are all ballpark.] Current UK emissions 105 MtC/a. Assuming linear decline to net zero in 2050, i.e. over 30 years, total saving is 105 MtC * 30 years * 0.5 = 1.575 Gt/C.
      ECS = 3C, mid range of IPCC.
      Pre-industrial atmospheric stock = 600 GtC; 2xCO2 stock = 1200 GtC.
      I have a naive model that predicts the atmospheric stock in 2050 to be 1062.8 GtC.
      Removing the UK’s savings from that (3.15 GtC) gives a stock of 1061.225 GtC.
      Allowing the effect of CO2 to be logarithmic and setting 1200 GtC = +3C, (assuming no delay in action, so mebbe TCS better) the two possible outcomes in 2050 give a temperature delta of:
      With UK carrying on as normal: +2.4745 C above pre-industrial
      With UK trending linearly to zero emissions in 2050: +2.4681 C ditto

      A saving of 0.0064 C. Remarkably close to the hundredth you predicted.

      To put it another way, reducing our output to zero by 2050, if no-one else joined in, would postpone the date at which the world reached the same carbon dioxide concentration by…
      2.3 months.

      • June 7, 2019 7:41 pm

        Whoops – the 3.15Gt in the middle there should read 1.575. Needs to be halved for the area of the triangle.

  9. Joe Smith permalink
    June 7, 2019 5:21 pm

    Madness, people will die if we follow that route.
    This contemporary stupid idea of setting unachievable targets, when you have no idea about how to practically implement them, has to stop.

    We have destroyed the chemicals, aluminium, ceramics, steel industries and as shown the ICE driven car industry. What is next?

  10. Neil Wilkinson permalink
    June 7, 2019 6:47 pm

    Anybody able to recommend a non Green Electricity/Gas supplier? Im with First Utility, but theyve just become part of Shell, just turned down their first attempt to book a smart meter installation.

    • June 7, 2019 7:37 pm

      I use Uswitch.

      As you say, all of the big suppliers insist on smart meters to get the best deals.

      • Neil Wilkinson permalink
        June 8, 2019 11:01 am

        thanks Paul

    • Gerry, England permalink
      June 9, 2019 10:08 am

      Been with outfoxthemarket for electricity for over a year and just left OVO – forced there by Economy Energy collapse – to Utility Point for gas as they are £150 cheaper. Nothing about meters received from outfox and not even from OVO in the short time I was there, even though they are full of green BS.

  11. June 7, 2019 7:48 pm

    Reblogged this on ajmarciniak.

  12. June 7, 2019 10:43 pm

    full electrification of heating would cause problems for peak loading of the grid in winter

    Just when solar power is at its minimum and wind is as unreliable as ever, so where’s all the power coming from? The lack of rational thinking is pitiful.

  13. Mikehig permalink
    June 8, 2019 5:59 pm

    Some simple little bits of devilry in the details……
    # Those heat pumps appear to be rated at 5 or 7 kW: am I right in thinking that motors of that size need 3 phase, 400v supplies?
    # Domestic chargers for electric cars seem to be mostly rated at 7 kW. It’s my understanding that the standard domestic supply is limited to 64 Amps or a bit over 15 kW. So charging a car and running a heat pump will use all of the available capacity before anyone tries to cook a meal, run the washer, etc..
    It would appear that the whole domestic electricity supply network will have to be upgraded to realise these schemes: that does not get a mention let alone a costing.

    • June 9, 2019 8:56 am

      5-7 kW! I could easily heat my home with that amount of power using cheapo fan heaters, currently a few 500 watt halogen heaters is all that is needed.

  14. June 8, 2019 7:48 pm

    Clear of all the LCOE, EROI and EROEI BS, I have done the simple arithmetic, an 11 year old can understand, showing 100% of the UK’s 340 TWh of electricity we use every year, can be supplied by advanced nuclear power plants at 1/8th of the cost of a reasonably ‘sensible’ mix of renewables.

    To supply 340 TWh per year of 24/7, low-carbon electricity, for 60 years, using advanced nuclear power would cost £65 billion.

    To supply 340 TWh per year of 24/7, low[ish]-carbon electricity, for 60 years, using 60% onshore wind, 30% offshore wind, 10% solar and 60 GW of CCGT backup, for low-wind/sun winter conditions, would cost £527 billion – 8X more.

    And the reason is simple: Renewables use between 17X and 27X more precious resources than nuclear power, along with fossil-fuelled energy every step of the way from mining/quarrying, through transport, processing, manufacture and installation.

    What should be of just as much significance to an environmentalist is that renewables also cost 1000X more in scenic desecration, ecosystem destruction, species wipe-out and waste mountains.

    Philip Hammond’ £1 trillion is well short of the cost of 100% decarbonisation via the CCC route. That £527 billion to decarbonise electricity can be increase threefold to decarbonise heating and hot water to buildings and decarbonise much of the transport sector.

    Under £200 billion to do all of that using advanced nuclear – over £1.5 trillion using renewables.

    The COD for GE-Hitachi’s BWRX-300 SMR has just been moved forward from 2030 to 2028. In 11 or 12 years time they will be available at a cost of US$2,000/kW – 1/4 of the cost of Hinkley and competitive to gas.

    This is my blog post with the cost figures:
    https://bwrx-300-nuclear-uk.blogspot.com/2019/03/butwhat-about-100-low-carbon.html

    And this is my facebook group supporting the BWRX-300 (new members always welcome):
    https://www.facebook.com/groups/1032713003519847/

  15. GeoffB permalink
    June 9, 2019 6:47 am

    My daughter has one of these on the roof of her condo (apartment) in Washington DC, There are about 60 condos so I guess there are 60 of these up there. It is like a fairly conventional air conditioning system, with a blower unit in each room. In the summer it works to cool the apartment. When It gets cold in the winter, at about 4C the roof unit starts to freeze up as the output air is below freezing. Resistive heating is used to prevent this (its on the roof!). Below 4C the whole thing packs up and resistive heating in each blower unit switches on. A futile, expensive and pointless system. Maintenance costs are high, to replace a unit means closing the street and bringing a crane in.

  16. Gerry, England permalink
    June 9, 2019 10:14 am

    Does the cost include the cost of electricity rising steadily every year as more unreliable generation is added? The Australian model of energy lunacy shows that the more free wind and solar are added the more the cost goes up.

  17. David permalink
    June 10, 2019 1:09 am

    In light wind conditions, will many heat pumps working near each other cause the local air temperature to drop so much that they are ineffective? Also we have probably millions of houses built with 9″ brickwork which cannot be insulated. Internal insulation would make rooms too small and exterior cladding would ruin the appearance of the building.
    Also could this cool weather be the Maunder Minimum about to give us a mini ice age? I’ve not used my central heating in mid June in fifty years! Perhaps this will change all the math on this subject.

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