Clean Heat Market Mechanism Regulations 2024

Debate between Earl Russell and Baroness McIntosh of Pickering

Monday 20th January 2025 Grand Committee

[Baroness McIntosh of Pickering (Con)]

I am grateful to the Minister for setting out the contents of the regulations before us. I am afraid that I share some of the scepticism of my noble friend Lord Lilley. I am grateful to the noble Lord, Lord Hunt, for referring to the warm homes scheme. He is aware of my disappointment that the discount is not going to be revisited, and I say that as honorary president of National Energy Action.

My understanding is that the heat pumps that are the subject of this measure simply are not as efficient as oil-fired central heating. I say that as where I live in the north of England, it is all oil-fired central heating; we are off grid and we cannot use gas. I walked past a surgery in the north of England that did not have just one heat pump; it had fitted three heat pumps, which probably means that one heat pump was not sufficient to generate the heat required.

My understanding—and I would be grateful if the noble Lord, Lord Hunt, could confirm this—is that, without log fires or some other secondary heating, heat pumps heat only to a top temperature of about 16 degrees. If you are retrofitting an existing building, as many of the windows may not be able to accommodate the size of the heat pump or the radiators that connect to it, substantial renovation may be required.

Furthermore, I am grateful to the Secondary Legislation Scrutiny Committee, which highlighted that the starting point referred to by the noble Lord, Lord Hunt, of around 40,500 installations per year is—in its word, at paragraph 56 of its 10th report—“ambitious”. The department expects the scheme to help ensure the installation of at least 77,000 heat pumps a year in existing homes between 2024-25 and 2028-29. I ask the Minister a simple question: is that feasible and realistic?

My noble friend Lord Lilley quoted £2,000 as the cost of an ordinary boiler. I recently got two quotes for a boiler. The boiler itself was not the issue. For the fitting, even that of an oil-fired boiler, you are looking at something in the region of £8,000 to £10,000. I repeat: if you live off-grid in a very rural area, it would be nice to think that heat pumps were an alternative, but, given the state of the current market, I just do not see them as feasible if they heat up to only 16 degrees when, in just the past two weeks, we have regularly had temperatures of freezing or down to minus 10. With those few remarks, I press the Minister to comment on these queries.

[Earl Russell (LD)]

My Lords, we are supportive of these regulations and the other actions that this Government have already taken—particularly in removing the outdated 1-metre rule on the requirement for planning permission—since coming into office. We are hopeful that, taken together with the other measures that the Government talk about, these measures will help us begin to make progress towards the target of 600,000 heat pumps by 2028 and help us to fulfil the need to meet these same figures every year going forward.

There are both supply-side actions and demand-side actions in this SI. We feel that the combination makes some valuable reforms. Most of all we welcome the work that has been done with industry after listening to concerns, making some much-needed reforms and finding ways forward on these issues. Our worry, though, is that, as welcome as these changes in the regulations are, they may not be sufficient in and of themselves to deal with the scale of the problem. In making this point, I quote the conclusion of the House of Lords Secondary Legislation Scrutiny Committee, which has already been mentioned:

“The DESNZ expects the scheme to help ensure the installation of at least 77,000 heat pumps a year in existing homes between 2024/25 and 2028/29. We consider this, from a starting point of around 40,500 installations per year, to be ambitious”.


Before I turn to the SI, judging by the debate on this measure in the other House, a little background information would be useful.

These regulations amend and reform a system that the Conservative Government brought in but mainly failed to make work in practice. The last Government compounded these problems by failing to work alongside and with industry and others in order to find amendments to the proposals, such that industry itself was prepared fully to support them and get behind them. These problems then led to further internal discussions about the policy itself, which further derailed progress. This problem meant that the implementation never really got resolved and, as a result, we are a long way behind on these targets. In short, the Conservatives had clear targets for the installation of heat pumps but failed to deliver them.

I give this background only because the Conservative Opposition spokesperson appeared to disown or not acknowledge that this is a reform of their policy. It may be that the Conservative policy has changed. If that is the case, I hope that the Conservative spokesman can make that clear.