Grants worth up to £6,000 for low-carbon heating installations and a 2035 ban on gas boiler sales are likely to feature in the government’s heat and building strategy, which is due to be unveiled next week, Utility Week has learnt.
Industry and environmental groups have been briefed by government officials that the long-awaited heat strategy will be unveiled alongside a raft of other energy policy papers before Parliament rises for its summer recess on 22 July.
The heat and buildings strategy is due to include proposals to replace the Green Homes Grant, which was cancelled in March.
The centrepiece of the replacement scheme is an extension of the Clean Heat Grant, Utility Week has been told.
Under the existing scheme, which is due to replace the Domestic Renewable Heat Incentive from April next year, households would be awarded £4,000 flat-rate grants to support the cost of installing new low-carbon domestic heat systems.
Utility Week understands that this funding could be tweaked to create a sliding scale of grants worth between £4,000 and £6,000 depending on the household’s requirements.
The proposal for a flat Clean Heat Grant rate of £4,000 has been criticised on the grounds that it will provide households with insufficient incentive to replace gas boilers with more expensive heat pumps.
The strategy is also expected to include previously trailed proposals to phase out gas boiler sales by 2035.
Boris Johnson acknowledged the political sensitivities surrounding the home heating strategy when he appeared in front of the House of Commons liaison committee yesterday (7 July).
Responding to a question by Commons’ housing committee chairman Clive Betts about lack of progress by the UK on cutting domestic carbon emissions, the prime minister admitted that it is “very difficult to pull off”.
He said “We need to be able to ensure that we can heat people’s homes and provide them with power in an affordable way while also reducing CO2.
“We are building a market, working with producers and manufacturers and the whole sector, just as we are doing with electric vehicle manufacturers, to ensure that we drive the bills down. What we cannot have is a situation in which ordinary people living in their own homes are suddenly faced with an unexpected and unreasonable cost to put in ground-source or air-source heat.
“At the moment, these things cost about 10 grand a pop. That is a lot of money for ordinary people. We need to make sure, when we embark on this programme, that we have a solution that is affordable and that works for people. We will not be imposing it until we have been able to create the market.
“The government are determined to keep bills low. That is a priority. The only way to do that is to build the market in a systematic way to make sure that we have the technology and that it is affordable. There are some big bets that we may need to place on hydrogen and on ground-source and air-source heat pump.”
The Times has suggested the government is considering annual payments to low and middle-income families to offset the cost of higher gas bills.
The paper says that the money would be paid regardless of an individual’s emissions, so that those who continued to use gas would have any increase to their bill covered by the payment. However, those who switched to cheaper green energy would still get the full payment.
The proposal, which The Times says has been discussed in Downing Street and the business department, is modelled on an initiative that was introduced in Canadian states in 2018. Under the model the first adult in a household in Ontario receives an annual payment equivalent to £129. The second adult receives £64, and each child receives £32. The payments are seen as progressive as richer households tend to spend more on heating and other activities that generate carbon emissions. This means the payments, funded by a carbon tax of C$30 (£17) per tonne last year, disproportionately benefit the less well off.
Policy bonanza
The government is expected to publish a swathe of other decarbonisation policy documents over the next week, including a hydrogen strategy.
These also include a transport decarbonisation strategy, an update to the smart systems and flexibility plan and an energy data and digitalisation strategy.
And a retail energy paper is expected to outline the government’s proposals to encourage opt in and opt out switching.
The Financial Times has reported today that the government is also bringing forward legislation to roll out the regulated asset base (RAB) model, which has been used for infrastructure projects including the Thames Tideway ‘super sewer’, for new nuclear power stations.
The Association for Renewable Energy and Clean Technology (REA) has today called on the government to increase its target for 5GW of hydrogen production capacity by 2030.
Ahead of the anticipated publication of the hydrogen strategy, the REA has urged the government to produce a clear policy framework for attracting investment into low-carbon hydrogen production.
Dr Nina Skorupska CBE, chief executive of REA, said: “The government had previously set a target of 5GW production capacity from hydrogen by 2030 in its Energy White Paper, but this must be much more ambitious to drive growth in the sector.”