2030 Emissions Reduction Target: Heating

Lord Callanan Excerpts

Tuesday 5th September 2023 Lords Chamber

[Lord Teverson]

To ask His Majesty’s Government how they intend to decarbonise heating in order to meet the 2030 target of a 68 per cent reduction in emissions.

[The Parliamentary Under-Secretary of State, Department for Energy Security and Net Zero (Lord Callanan) (Con)]

My Lords, the Government are investing £6.6 billion over this Parliament in improving energy efficiency and installing low-carbon heating. A further £6 billion has already been committed for 2025 to 2028. Heat pumps are the key technology for decarbonising heating in the near term and are essential in all 2050 scenarios. Therefore, the Government’s aim is for 600,000 heat pump installations annually by 2028. However, a range of technologies will be needed to decarbonise heating, including expanding heat networks in the longer term.

[Lord Teverson (LD)]

My Lords, the Government’s emission targets are both ambitious and critical, so why are we still allowing gas boilers to be installed in new housing developments right now?

[Lord Callanan (Con)]

As the noble Lord knows, that is a matter for building regulations. The future homes standard will come in from 2025; it will not specify the type of heating but it will put in place standards that will, in effect, end gas boiler installations in new homes.

[Lord Birt (CB)]

My Lords, the Minister will know that heat pumps are a very efficient means of turning electricity into heat, but does he think that, while electricity costs roughly three times as much as gas, there is any prospect whatever of them taking off in the UK?

[Lord Callanan (Con)]

The noble Lord is right about the efficiency of heat pumps and about the cost of electricity. Later this year we will issue a consultation on so-called price rebalancing, which will attempt to bring the electricity price down relative to gas.

[Baroness Whitaker (Lab)]

My Lords, will the Government turn their mind to trying to encourage heat pump installers to install them in flats, where a large proportion of UK residents live? In other countries, they can do this; obviously, it is not feasible in all cases, but in many cases it is.

[Lord Callanan (Con)]

The noble Baroness makes a valid point. Heat networks are probably more appropriate for most flats—for instance, you could have one heat pump in the basement that would heat all the flats—but for some cases she is right.

[Lord Forsyth of Drumlean (Con)]

My Lords, what is the Government’s estimate of the cost of meeting this target and who will pay for it?

[Lord Callanan (Con)]

That depends on what target the noble Lord is referring to. There are a number of different targets but a substantial amount of government funding is going into this—some £450 million for the boiler upgrade scheme and £6.6 billion to decarbonise heating generally.

[Baroness Sheehan (LD)]

My Lords, this July, residents of Whitby in Ellesmere Port vetoed plans to be one of two proposed sites for hydrogen village trials out of safety concerns—concerns which were extremely well-founded, I might add, given that hydrogen is the lightest element in the periodic table and notoriously difficult to control. I have two questions. Can the Minister confirm that the residents of Redcar in Teesside will have a similar right of veto? Which other locations are now being considered for these ill-advised hydrogen boiler trials?

[Lord Callanan (Con)]

Public acceptability is a key component; that is why we ruled out Whitby for the trial. Redcar is the only other location being considered.

[Baroness McIntosh of Pickering (Con)]

My Lords, does my noble friend agree that decarbonisation would be faster if we had better insulated rental properties, rather than seeing most of the heat go through single-glazed windows, particularly in the north of England?

[Lord Callanan (Con)]

I would not characterise just rental properties in that way; whatever form of heating is used, better insulation and better performance of buildings is a good thing.

[Baroness Hayman (CB)]

My Lords, I declare my interest as chair of Peers for the Planet. As the noble Lord, Lord Birt, made clear, the decarbonisation of home heating will require an even greater supply of clean electricity. I therefore welcome the Government’s announcement today that they will finally end the destructive and irrational effective ban on onshore wind development that we have lived with since 2015 by updating the National Planning Policy Framework. What scale of difference does the Minister think this will make to the amount of electricity generated by onshore wind? I am sure he will be aware that, last year, we managed two new onshore wind developments while Ukraine managed 19.

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[Lord Callanan (Con)]

The noble Baroness has been dogged in her pursuit of this. It is very difficult to give an estimate, as she asks me to do. It would depend on the number of applications and its acceptability for local communities.

[Baroness Blake of Leeds (Lab)]

My Lords, including industrial processes, heating accounts for about 37% of total UK carbon emissions. Of the 17% of carbon emissions from heating and cooling in buildings, the vast majority can be attributed to domestic homes. Analysis shows that a third of the money pledged for retrofitting and alternative systems has not yet been allocated. That is approximately £2.1 billion unspent. When and how will this be resolved, or do the Government believe that they are on track to reduce emissions as planned without it?

[Lord Callanan (Con)]

I will have to look very closely at the noble Baroness’s figures. I do not recognise £2.1 billion as being unspent; in many of the schemes we are oversubscribed in applications, but we will press on with the progress in many of these schemes. In fact, I went to visit a number of them in the noble Baroness’s home area of Leeds only a few weeks ago, and they are proving extremely successful.

[Lord Hope of Craighead (CB)]

My Lords, what are the Government’s proposals for increasing the number of transmission lines? Electricity once generated must reach the people who are going to use it and at the moment we do not have enough transmission lines.

[Lord Callanan (Con)]

The noble and learned Lord is right. His home area of Scotland will see the installation of a number of transmission lines to help to get power to other parts of the country. This is very important. Ofgem has allowed billions of pounds in the settlement to the DNOs, which will help electricity upgrades, but as he will be aware it is not without its controversial elements.

[Baroness Walmsley (LD)]

My Lords, is the Minister aware that, last year, France installed nearly six times as many heat pumps as the UK? Does he think that a coherent government decarbonisation heat policy, a more effective new-build efficiency regulation, support for a professionalised end-to-end supply chain and independent advice for consumers have anything to do with France’s success? Are the Government planning to adopt any of those strategies?

[Lord Callanan (Con)]

Indeed we are. The situation in France and for ourselves is very different, because France has not had the availability of domestic gas that we have had over the years. Nevertheless, I agree with the noble Baroness’s point: we need to expand the number of heat pumps being installed. In fact, we are already doing many of the measures that she outlined.

[Lord Geddes (Con)]

My Lords, would my noble friend please put greater emphasis on the development of tidal energy, which would greatly reduce carbon emissions? I think he will tell us that the infrastructure is extremely expensive; that is true, but thereafter it is utterly free and totally predictable.

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[Lord Callanan (Con)]

That is the case for many renewables. Tidal power is an emerging technology and it is eligible for contracts for difference schemes. We made a number of allocations of tidal power support in the last round. I agree with the noble Lord, but we must look at the costs of that against the costs of other renewable technologies and get the best value for the bill payer and the taxpayer.

[Lord Grantchester (Lab)]

My Lords, it is an unfortunate feature of Conservative Governments that they constantly churn grant schemes—

[The Lord Bishop of St Edmundsbury and Ipswich]

I will be very brief. A crucial component of the decarbonisation of heat in homes agenda is to have enough skilled technicians and engineers to install the various heating solutions. Can the Minister update the House on the progress of creating the necessary training opportunities?

[Lord Callanan (Con)]

I can indeed update the right reverend Prelate. There are a number of schemes and training competitions, and we have recently allocated tens of millions of pounds, training thousands of new installers. I am pleased to say that many of the boiler and heat pump manufacturing companies are running their own training courses, and there are now, I think, about 2,000 registered firms with the Microgeneration Certification Scheme.

[Lord Grantchester (Lab)]

I apologise; I had not noticed the right reverend Prelate rise to ask his question.

It is an unfortunate feature of Conservative Governments that they constantly churn grant schemes and support. The Government is way off on their targets for the boiler upgrade scheme and have now, in consequence, in their usual pattern, extended the support for heat pumps until 2028. Do the Government recognise that this constant lack of commitment undermines the confidence of businesses and householders to plan ahead?

[Lord Callanan (Con)]

The noble Lord is asking a self-contradictory question. He starts off by saying that the Government have no long-term schemes and then admits that we have extended the boiler upgrade scheme through until 2028—precisely to address the point that he is talking about. We need more long-term schemes and we need a greater commitment over the longer term. That is precisely what the Treasury has allowed us to do, by already announcing £6 billion of extra funding from 2025 to 2028 to provide exactly that certainty. We need to build up the skills base and the supply chains in the longer term.