A new era of low carbon heating

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During the depths of winter, most people probably don’t think how we heat our homes – we just need them to be warm. 

For centuries in Britain, families burnt wood and coal in fireplaces which mostly lie idle today. 

It wasn’t until the 1970s when gas became widely available, thanks to the North Sea bonanza, that people started to leave the smoke and effort of coal fires and grates behind them. 

By 1990, the proportion of homes with gas central heating had reached 80%, up from 30% just twenty years earlier. That is how most people still heat their homes.

Today, faced with the climate emergency and the 2050 net zero target, Britain needs to embark on a new era of low carbon heating. 

Natural gas is a fossil fuel and burning it emits carbon dioxide, a greenhouse gas. 

The Government has already announced its intention that new building standards will ban gas boilers and other forms of fossil-fuel based heating for new homes from 2025. 

Last month, it also announced that sales of coal and wet wood (which creates more smoke and harmful particulates) would be phased out from next year to cut pollution.  

Ofgem is working with government to find the best low carbon alternatives and ensure that people – especially those in vulnerable circumstances – will always be able to heat their homes at an affordable price and be protected as we make the transition.

Options

Heating our homes is currently responsible for around 18% of the UK’s greenhouse gas emissions – eliminating them by 2050 is arguably the biggest challenge that the energy sector faces.

There are at least three options for low carbon heating:

  1. Heat pumps: These work like reverse fridges: making homes warmer by extracting some warmth from outside (deep underground or outside) and transferring it inside. 
  2. Hydrogen: Hydrogen itself is a zero carbon source and could potentially be burnt instead of gas in something similar to our current domestic boilers. Producing hydrogen without emitting greenhouse gases, would need low carbon electricity, or infrastructure to capture and store carbon dioxide. The gas networks would need to be reconfigured to pipe hydrogen instead.
  3. Local heat networks: Homes could be connected to a network of underground hot water pipes.  The hot water could be created by powerful heat pumps, or by burning hydrogen or other zero carbon fuels. Heat networks are used extensively in Northern Europe, such as Scandinavia, but not yet in the UK.

It’s too early to say which option – or options – would be the most effective and lowest cost. Different technologies could be more suitable for different parts of the country. For example, for homes in areas which are not connected to the gas network, heat pumps may well be the most suitable option. 

Finding the way ahead

Ofgem is working with government and industry on developing and testing the options.

We regulate the network energy companies which will play a key role in taking us to a low carbon heating era. Our new network price controls, which start next year and set how much these monopoly companies can spend, will set aside money for strategic innovation funds for further trials for low carbon heating. 

This funding for example could help show whether hydrogen can be safely used at reasonable cost, and how heat pumps can be operated to minimise expense and impact on the electricity networks. This funding will build on current trials backed by government and Ofgem, such as the H21 hydrogen project in Leeds.

Government is also currently consulting on giving Ofgem a new role in regulating heat networks, alongside our roles in electricity and gas. In this role we would need ensure that rights of consumers connected to heat networks are protected, as we currently do for electricity and gas consumers.

Protecting consumers

Like the moves from coal to gas, and from open fires to central heating, the transition to a low carbon heating era will not happen overnight. It will most likely involve a gradual programme of replacement of gas boilers, for example as they come towards the end of their natural life. 

But we must start exploring alternatives to gas boilers now. Solutions must work for consumers – to provide the services people need and want, at costs they can afford. Putting off action would leave the country an even bigger challenge to decarbonise heat – leading to more risks to achieving our targets in the coming three decades, and higher costs for future generations to bear.