Distribution network operators (DNOs) have embraced the new target to raise heat pump installations to 600,000 per year by 2028 as part of the government’s 10-point plan for creating a green industrial revolution.
Figures from several of the companies told Utility Week the goal is achievable from their perspective and will provide them with some much-needed certainty to start planning investments.
“This is pretty much consistent with one of our most aggressive scenarios and it has come at a nice time in business planning,” he added. “Of course, we would like more specificity on lots of things but actually I think what I’m seeing from both government and the regulator is some clear commitment here.”
Erwin said Northern Powergrid was previously expecting to see installations in their patch of around 190,000 over the five-year RIIO ED2 price control but this figure is now likely to reach around 430,000. Whilst still a large increase: “We were already in the ballpark in our planning for this.”
“We’re confident we can deliver that capacity as long as it’s planned and as long as the regulator gives us the allowances so we can properly tool up,” he remarked.
At the same, Erwin cautioned that achieving the target will require a significant increase in network capacity and that coordination is therefore essential. He said DNOs will need to “focus on areas where there is existing capacity first and then on areas where there’s a relatively thin network a bit later. It’s all very doable but it’s not a walk in the park.”
“What we don’t want to do is take a street and try to do all the houses all at once if that street hasn’t already been checked and if necessary reinforced for that rollout,” he explained. “If we’re talking about one or two houses on every street, every year, and you can see it building up slowly, that’s fine.”
He continued: “If you think about what’s happening with EVs, at the moment we’re accommodating lots and lots of people putting in domestic chargers because that’s happening broadly everywhere and you’ve got organic growth. Networks are really good at dealing with organic growth.”
Conversely, he warned that if there was an approach to roll out heat pumps to every home in a particular town over the course of one year, it would be more problematic.
Targeting new capacity
Erwin said he expects most installations to take place in new build and off-gas-grid properties. With regards to the former, he said: “That’s brilliant because that’s new capacity. We can see it coming. We can size the connections accordingly.”
When asked how easily heat pumps could be accommodated in the latter, he said: “It varies from place to place. Typically off-gas-grid properties tend to be rural and it will very much depend on the particular circumstances.”
Erwin said improvements in energy efficiency will be key: “For the new builds, if you go for a zero-carbon home or a low-carbon home, you reduce the heating demand from perhaps a peak of 24 to 36 kilowatts to a peak of a few kilowatts and that suddenly makes doing it with heat pumps so much easier. If you reduce the peak heat demand and increase the thermal mass of the building it makes the problem a lot easier to solve.”
He described energy efficiency as the “biggest challenge in decarbonisation”, adding: “It’s an issue which all governments have struggled with for a while… It’s the lowest cost way of decarbonising by far and its pretty essential if we’re going to decarbonise heat but it’s always been the most intractable problem.”
Erwin said it is also important that heat pumps support, rather than hinder, the operation of networks: “We need to really look really carefully at the structure of the market and we need to work with suppliers to make sure that the products that people develop on the back of these things take a whole system view, rather than ignoring the networks and just serving the energy market or vice versa.
“Again, the thing we’re trying to avoid is a big supplier managing flexibility for all of its customers and then aggregating that up and trading in the energy market, whilst ignoring what’s happening on the network.”
One touch policy
His views were shared by Ian Cameron, head of innovation at UK Power Networks (UKPN), who described the new target as a “fantastic signal”. He said the commitments on both heat pumps and electric vehicles, when taken together, will allow DNOs to operate a “one touch” policy for upgrading domestic power supplies.
Cameron said the number of heat pumps they are expecting to install has increased as a result of the announcement but not to an extent where it would “fundamentally change our approach”.
He drew a comparison with the explosion of embedded renewable generation over the last decade: “If you go back ten years, we had a handful – one, two, three – of embedded renewable generators on our network. We’re now at 7.4GW which is fast approaching 50 per cent of our peak. In ten years, you can make great leaps and bounds. We went from almost a standing start to what we would have called a revolution in 2010.”
Explaining the particular situation for UKPN, Cameron said: “On average, we’re a third of everything – load, customer base, etc – in the UK. That means we need to prepare for around 200,000 per year in 2028.”
Like Erwin, he expects the vast majority of installations to come in new build and off-gas-grid homes: “We’ve got a large new build programme in the UK and what we see there is that by the end of 2028 we would have attracted another 500,000 customers. Let’s break that down. It’s roughly 100,000 per year over the price control”
“And we will see those coming because they will come through the planning process,” he added. “We can ready ourselves in time because as fast as you can build homes, we can build the network.”
“The other area where we see a lot of those 200,000 per year heat pumps coming is a segment called off gas grid,” Cameron said. “We have across our licenses around 450,000 homes that are in that situation where they’re either burning oil, coal or some other fossil fuel to heat themselves. Those are the ones that we need to consider. How do we unlock that segment?
“If you want to aim to achieve 600,000 heat pumps per year you start to transition those communities in an organised, coordinated fashion. And if we take 90,000 per year, that’s quite achievable.
“All these communities are at different levels of readiness. We’re already working with a community in Berkshire trying to develop that exact model.”
He said the remaining 10,000 would likely come from “sporadic movement from people who are already on the gas grid today but want to decarbonise on their own”.