Centrica has called for the installation of one million heat pumps over the next five years as part of the green economic recovery.
The company has published a three-point plan which includes a series of measures it believes will help restart the post-Covid economy in line with its net-zero emissions commitment.
Bringing forward low-carbon investments, it says, will both stimulate the economy and save customers money, compared to delaying the policy decisions needed to meet net zero.
Its three main priorities include:
- Net zero homes and electric vehicles (EVs)
- Net zero businesses
- A net zero energy system
The British Gas-owner warns that domestic hydrogen use is “likely more than 10 years away” and instead outlines the benefits of heat pumps which can be used sooner.
It describes heat pumps as a readily available, proven technology, adding that its British Gas business has the customer knowledge, engineering workforce, training facilities, and know-how to get heat pumps right for customers.
The company says it is already progressing plans to trial hybrid heat pumps with its customers.
To support its aim, it calls for the government to bring forward the full Future Homes Standard (FHS) by three years to 2021, as well as phasing into 2025 a scrappage scheme for oil boilers.
Further policy measures it wants to see include clearly linking the £9.2 billion ECO energy efficiency fund with heat installations and common training standards for installers.
It believes that the funding should be focused on delivering the government’s target to upgrade the 19 million homes in England and Wales which have an energy performance certificate (EPC) of D or worse. It also argues that repurposing thousands of smart meter installers to energy efficiency work and heat pump installation will save jobs.
The level of support under the proposed Future Low Carbon Heat Support Scheme should be tripled and widen eligibility to hybrids, as well as an acceleration of the enduring phase of the Green Gas Levy to come in from 2022, including all green gasses.
For businesses, Centrica wants to see legislation brought forward for energy efficiency auctions, where third parties can bid to deliver energy efficiency schemes for SMEs.
With investment in the public sector, and particularly the NHS, at an all-time high, Centrica sees “a significant opportunity” to reduce energy efficiency costs. “A legislative target for public sector decarbonisation should be built into the 2020 Comprehensive Spending Review (CSR)”, it adds.
Finally, it calls for cost-effective system flexibility to be brough forward, pointing out that Covid has accelerated energy trends such as falling demand and excess intermittent renewable generation, which it says has created major balancing challenges costing up to £500 million.
To this end, the Energy White Paper should be used to identify flexibility as a key enabler for the energy transition and government should set a policy objective for the deployment of flexibility at a local and national level to meet net zero at the least cost.
Furthermore, Ofgem should set licence conditions for network operators which require flexibility procurement to be assessed before network reinforcement.