Lord Ravensdale (CB)
My Lords, I beg leave to ask the Question standing in my name on the Order Paper, and in so doing declare my interest as a director of Peers for the Planet.
The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy (Lord Callanan) (Con)
My Lords, to meet net zero, virtually all heat in buildings will need to be decarbonised. The net-zero strategy outlines that we expect that emissions could fall by between 25% and 37% by 2030 and 47% to 62% by 2035 compared with 2019 levels, based on an indicative heat and buildings pathway. The heat and buildings strategy shows our robust plans to do so.
Lord Ravensdale (CB)
I thank the Minister for that response. Although I welcome the heat and buildings strategy, including the clear focus on heat pumps, it was silent on embodied carbon, which forms a large proportion of emissions from the built environment— 50 million tonnes in CO2 equivalents a year, equivalent to aviation and shipping combined—so there is a strong case to report and regulate. Can the Minister say what plans the Government have towards mandatory reporting of carbon emissions in the built environment, along with regulating to limit carbon emissions in construction projects?
Lord Callanan (Con)
The noble Lord makes a very good point. We need to look at embodied carbon much more closely. Indeed, I attended and launched a session on exactly that at the COP climate change talks. We will work with industry practitioners to see what more we can do in this important area.
Lord Mackenzie of Framwellgate (Non-Afl)
My Lords, I apologise for my premature intervention. Are all domestic new builds taking place since the Glasgow COP meeting last month being built to the new specifications required by the Heat and Buildings Strategy? If not, why not?
Lord Callanan (Con)
The new building regulations for net-zero homes will take effect from 2025, but of course we are not waiting that long to take action. The new Part Z of the building regulations will kick in from next year.
Lord Lilley (Con)
My Lords, does my noble friend agree that living standards generally can rise only if we produce more output per head? Conversely, living standards will fall if we need more workers to produce our existing level of output of energy or heating. Yet this strategy says that upgrading our homes and buildings to warm them without using fossil fuels will require 240,000 more workers than at present, who will no longer be able to produce other goods and services. Does my noble friend think that reducing the average living standards of the country is what people voted for?
Lord Callanan (Con)
I am sure people did not vote to have their living standards reduced. Indeed, we have an excellent record of both decarbonising and growing the GDP per head of population. We have a very successful record of doing that so far, and I hope we will continue to be able to do so. I remind my noble friend that whatever our individual views on this, we now have a legal obligation to meet net zero.
Lord Broers (CB)
My Lords, while complimenting the Minister and the Government on getting on with the SMR programme, I ask him whether sites are being sought for these reactors where the heat they produce can be used in district heating systems for buildings, industry and horticulture.
Lord Callanan (Con)
The noble Lord links together two important facets of this work: the importance of getting on with building new nuclear capacity, which I think is widely recognised, and the importance of developing heat networks. We do not have such a tradition of heat networks in this country, but they are rapidly expanding and we are investing hundreds of millions of pounds in future heat networks.
Lord Whitty (Lab)
My Lords, can the Minister confirm that after the publication of this strategy, he indicated that the decision on hydrogen-based heating for homes would not be taken until 2025? If so, what advice does he give now to householders whose boilers are running out of time? Should they buy a heat pump or a hydrogen-ready boiler, or wait until the price of air pumps comes down and a decision is taken in at least four years?
Lord Callanan (Con)
The noble Lord is correct about the timescale for taking a decision on hydrogen. It is not yet a mature technology in terms of whether it would be available in sufficient quantities on a wide enough scale to be used for home heating. We are funding a large series of trials, moving towards a hydrogen neighbourhood, a hydrogen village and then a hydrogen town-level trial before we can advise people to take that forward. In the meantime, we have set our ambition to phase out the sale of gas boilers by 2035.
Lord Oates (LD)
My Lords, is the Minister aware of the concern expressed by the Climate Change Committee over the lack of an integrated offer on home retrofit for home owners who want to upgrade the energy efficiency of their homes? What do the Government intend to do to work with industry to correct this clear market failure?
Lord Callanan (Con)
We are working closely with industry to work up the offers we have to householders, as well as the myriad government schemes targeting mainly low-income families: the £800 million social housing decarbonisation fund, the £950 million home upgrade grants, et cetera. Then, of course, we have the £450 million boiler upgrade scheme launching in April next year to subsidise the installation of heat pumps.
Lord Hamilton of Epsom (Con)
My Lords, to follow the question from the noble Lord, Lord Whitty, now that the debate on net zero is maturing and we are talking about the costs of reaching net zero, should we not have a cost-benefit analysis from the Government on how all this is working out?
Lord Callanan (Con)
The legislation has, of course, already been passed by this House to make net zero legally binding, but extensive impact and cost-benefit analyses were done at the time.
Lord Grantchester (Lab)
Decarbonising heat is still a massive challenge, which, as has been mentioned, can be made less so through energy efficiency measures. Given that there are 19 million homes below EPC band C standard, and given the collapse of the green homes grants scheme, can the Minister clarify how many of these homes will be helped by the energy efficiency announcements in this strategy, and by what date?
Lord Callanan (Con)
The noble Lord is correct that energy efficiency is extremely important. It is very much a “no regrets” approach; we should always take a fabric-first approach to upgrading properties. As I mentioned, we have a substantial series of financial commitments: the social housing decarbonisation fund, the home upgrade grant, the boiler upgrade scheme, et cetera, to contribute towards the cost of these. The other things we need to look at, of course, are the green finance offers, which will enable people to upgrade their homes in a cost-effective manner.
Lord Birt (CB)
My Lords, heat pumps appear currently to be the only proven and viable off-the-shelf option for decarbonising home heating, yet, as we all know, electricity is prohibitively expensive and the cost of the necessary insulation exorbitant. How does the Minister think the Government’s target of 600,000 heat pump installations within six years can be achieved?
Lord Callanan (Con)
The noble Lord is correct about the target that we have set. I mentioned the boiler upgrade scheme starting next year. We also have changes to the building regulations, as referred to in earlier questions, which will kick in in 2025, making it virtually impossible to install fossil-fuel heating systems. That will produce a large increase in heat pump installations, as will the other schemes that we have talked about; low-carbon heating can be installed under all of them.
Baroness Jones of Moulsecoomb (GP)
My Lords, the campaign group Insulate Britain, which has annoyed people so badly, was asking for a national programme to ensure that homes are insulated to be low energy by 2030. The Government are nowhere near on track to do that, but it is a sensible request; it would ensure that not only would millions of people use less energy, they would be able to pay for what they use. Why not do it?
Lord Callanan (Con)
I certainly agree with the noble Baroness that Insulate Britain has managed to annoy everybody. I cannot remember a campaign in this country that has been less effective at mobilising public support behind an important issue. We need to take people with us on this; irritating them, disturbing their daily lives and stopping them going about their lawful business is really not the way to do it. I hope that the noble Baroness will not continue to support these ridiculous, irresponsible campaigns. Having said that, we are spending £3.9 billion over the next few years to insulate homes, upgrade their performance and install low-carbon heating systems. We are getting on with the job quietly and successfully.
Baroness Evans of Bowes Park (Con)
My Lords, the noble Lord, Lord Jones of Cheltenham, wishes to speak virtually. I think now is a convenient point for me to call him.
Lord Jones of Cheltenham (LD) [V]
My Lords, it is estimated that 50,200 heat pump installers will be needed to install a million heat pumps by 2030. Currently, there are only 1,100 MCS-registered installers and the necessary training courses are expensive. What are the Government planning to do to train another 49,000 of them?
Lord Callanan (Con)
We are working very closely with the industry to do precisely that. The Heat Pump Association has recently launched an excellent conversion course for existing heating engineers to convert their skills. I have visited a couple of the training workshops being launched by some of the big heat pump manufacturers in this country. Of course, we are also working very closely with the DfE, which has responsibility for the skills to make sure that there is an appropriately qualified workforce to take this important work forward.