Heating without the hot air: Principles for smart heat electrification
23 Mar 2020
In these trying times, any snippets of good news and hope can be very valuable. With our new report, we have tried to provide hope in an area of technology and policy which, certainly for the UK but also in other European countries, has seen very little progress for the past few years.
The Cinderella of energy policy
Heat decarbonisation remains the "Cinderella" of energy policy and despite all the chat about heat, deployment on energy efficiency and renewable heating remains well below the Committee on Climate Change’s indicator levels. The recent announcements for heat in the budget appear extremely unlikely to put the UK on track. But Drizella (the electricity sector) and Anastasia (transport) appear to be at, or en-route to the clean energy bill. Heat can join them.
Through our new report, Jan Rosenow from the Regulatory Assistance Project and I are trying to turn that pumpkin into a carriage. Based on our expertise, personal experiences, a detailed literature review and expert review, we developed principles for how progress towards heat decarbonisation could be made now, in a way which minimises energy system impacts and costs, and therefore limits costs for consumers.
Major cost reduction
Fundamentally, our report suggests that heat electrification via heat pumps alongside energy efficiency upgrades, and the use of smart tariffs which reflect wholesale electricity costs and carbon intensity, can reduce greenhouse gas emissions immediately at limited consumer costs. This can take place despite current perceived technological uncertainty over optimum technologies (hydrogen or electricity or hybrid). Indeed, Jan and I are both running air source heat pumps in what were on-gas properties using time variable tariffs and turning off the heating at peak times. We have both seen major reductions in electricity costs compared to non-variable rates.
How to achieve maximum value
However, for maximum consumer value to be achieved and in order to minimise system impacts, we suggest there are some key principles which need to be considered:
- Put efficiency first.
- Recognise the value of flexible heat load.
- Understand the emissions effects of changes in load.
- Design tariffs to reward flexibility.
To help policymakers meet the task at hand, we also offer a number of policy recommendations in line with the four smart heat principles:
- Step up energy efficiency building upgrades through more ambitious targets and policies.
- Phase-out carbon-intensive heating systems.
- Phase-out subsidies for fossil fuel-based heating systems.
- Implement well-designed and well-funded financing mechanisms for energy efficiency and low-carbon heat.
- Ensure fair distribution of costs among different fuels.
- Encourage the flexible use of heat through the introduction of time-varying prices.
Overall our paper argues that while immediate and widely beneficial heat decarbonisation can be achieved, this can only happen by considering all of the principles and designing policy around them. Financial and commercial packages as well as regulatory and policy measures are likely to be needed to achieve this. The full paper can be found here and we expect further UKERC publications to come from this work in the coming months.
 Cinderella remains a brilliant way to think of heat – thanks to Maxine Frerk for re-introducing it at the ‘future of heat’ conference last month.