This week saw yesterday’s announcement on the increase in the price cap, which will apply from April. It also saw the publication of the BEIS Committee’s 9-month inquiry into the decarbonisation of heat. This was a big one for me – I gave evidence and my whole career, whether delivery or policy, has been in this area. Heat policy was briefly fashionable a decade ago, cumulating in the ill-conceived Green Deal. It then dropped like a stone in 2015, with the decision to ‘cut the green ****’ (a decision now thought to have cost £2.5bn). (I gave up and had kids at this point).
Heat policy emerged with a vengeance in the first Covid lockdown, and as the inquiry progressed against the ticking clock of COP26, it seemed like it was changing the debate in real-time. Without it, would we have the ambition to cut the cost of heat pumps by up to 50 percent by 2025? Or confirmation (of what many suspected) that the housing department (MHCLG) felt its role here was ‘limited’?
The report did what it needed to do – diagnosing over a decade of policy failure and calling for a long-term, urgent, and coherent policy response – a heat ‘roadmap’.
Published as the gas crisis dominates the headlines, the report highlights the failure to fix the UK’s leaky housing stock. If the previous supplier-led programme of insulating lofts and cavity walls had continued at the 2012 rate (when 1.6 million lofts were filled), all 15 million homes needing basic measures would have been done by now, saving more every year than the current rescue package will do for a year.
On scale, the Committee highlights that heating homes are the emissions-equivalent of petrol and diesel cars. Yet, while we have a strong timeline and clear roadmap, we have significant policy voids for homes (notably finance, heat networks, and ‘able to pay’ households) For electric vehicles, the clear signals and supportive policy framework is delivering – 1 in every 5 new cars sold in December were battery-electric. This is the market is going from niche to mainstream in record time, just as we saw with offshore wind.
Last month, Energy UK submitted a response to the proposal to drive up heat pump deployment and drive down costs (via a mandate on heating manufacturers). There are a lot of ‘ifs’ here but, ‘if’ this policy is as robust as members have argued for, and ‘if’ the wider structural barriers (policy costs on bills, retail market reform) are tackled, this could be a market-led engine for change. It’s still only part of the puzzle but, it’s a big piece and it could be genuinely exciting.