Low-carbon Off-gas Grid Heating

Alan Whitehead Excerpts

Thursday 16th June 2022 Westminster Hall

[Dr Alan Whitehead (Southampton, Test) (Lab)]

This has been a good debate about a very troubled subject. I congratulate the right hon. Member for Clwyd West (Mr Jones) on securing the debate and putting forward comprehensively just what trouble we are in as far as off-grid properties and decarbonisation are concerned. We heard very thoughtful contributions from the hon. Members for Ceredigion (Ben Lake), for Buckingham (Greg Smith) and for Strangford (Jim Shannon); the latter is something of a fixture in these debates but always has something relevant and useful to say, whatever the subject. We also heard a thoughtful contribution from the hon. Member for Inverness, Nairn, Badenoch and Strathspey (Drew Hendry), who was supposed to be summing up the thoughtful contributions of everyone else, but made one himself.

This is a really thorny subject, because the imperative of decarbonisation heavily hits off-grid housing and businesses. There are, as hon. Members have mentioned, a surprisingly high number of properties in England, Wales and Scotland that are off-grid. I think it is about 1.1 million houses in England, 230,000 in Wales and 550,000 in Scotland. Put together, that is a very large number of homes. Not only do they often have different characteristics from the mass of on-grid housing in urban areas, but they also have limited choices for decarbonisation.

I only have the figures for the split of fuel for properties in England, but we can see straightaway that people are at present heating their homes with arrangements that are as heavily carbonised as they could be: 78% in England are heating with oil, 13% with LPG—slightly less polluting, but still pretty high-carbon—and 9% still with coal. It is imperative that we get all those properties off high-carbon heating arrangements and on to low-carbon heating arrangements as soon as possible.

Far more off-grid homes are poorly insulated and of a lower standard assessment procedure rating than their urban comparators. They are generally larger and more free-standing than properties in urban areas. Therefore, in the solutions we put forward to decarbonise them, we must take account of those issues, particularly so that we can get the energy efficiency quality of those homes up to the standard where they can take those low-carbon arrangements.

Off-grid properties do not have the same range of longer-term choices available to them. We cannot decide that all the off-grid properties will go on to hydrogen, because we cannot get hydrogen to the off-grid properties. We cannot go for district heating solutions with off-grid properties, because they are generally in too sparse a layout to make district heating efficient or feasible. There is a narrow range of choices for off-grid homes.

I would not be in favour of taking a break in our plans to move to low carbon, as the right hon. Member for Clwyd West suggested this afternoon, to get our choices right. The replacement turnaround time for the types of heating in those off-grid properties—the boilers and other apparatus—is about 15 years. That is slightly longer than for boilers in urban properties, because oil-fired arrangements and so on are often set out differently. If we take that normal replacement turnaround time, and we pretty much start now with replacing those boilers with low-carbon alternatives as they come up for replacement, the cycle will have been completed by the early 2040s. That is within the 2050 target for low-carbon replacements. If we put our plans off, we simply would not replace the boilers as quickly as otherwise. That suggestion assumes that we are being very careful to undertake the replacements with the active will and participation of the people who live in those homes, as the right hon. Member for Clwyd West enjoined us to do—that we are not marching in and ripping boilers out, and demanding they do things on the spot, whether or not their arrangements are obsolete and whether or not they can afford the changes.

I have considerable sympathy for the Government’s problem of how to go about decarbonising the sector. The Government have chosen, in the first instance, to go for a heat-pump-first solution—to prioritise heat pumps as the replacement arrangements in those homes. As hon. Members have pointed out, heat pumps do not always work in those homes, and they certainly do not work unless the energy efficiency is substantially upgraded. Given the homes we have in that group, heat pumps might require a whole-house refit, including the gauge of pipes and various other things related to the central heating, in order to work as well as they should. The cost of the heat pump is therefore not the only cost for those off-grid homes. Quite a lot of other work is also required.

I think we can question whether heat-pump-first is the right way to go about this plan. It is not that they should not be a substantial part of the process but, as has been said, a number of other options are available that ought to and could be considered alongside heat pump installation. We might undertake a more horses-for-courses arrangement, because of the variety of off-grid homes that we need to decarbonise.

I am sorry to say that such an approach was not apparent in the consultation that closed just recently, “Phasing out of the installation of fossil fuel heating in homes off the gas grid”. I hope right hon. and hon. Members all got their submissions in; if they did not, it is a bit late now, but never mind—we are making up for it this afternoon.

The consultation missed out on providing a realistic appraisal of what alternatives to heat pumps there might be for off-grid homes. The consultation mentioned some, but merely said it would look at and appraise them and possibly consult at a later date. That is not the way to go about it—we our ducks in a row before we start consulting about what we will do on alternatives to high-carbon heating in homes.

As right hon. and hon. Members have mentioned, the alternatives are several. Some are very promising, some less so. Certainly, as the hon. Member for Buckingham mentioned, hybrid heat pumps—I have been to see a couple in operation in south Wales—do a very good job of arranging for the boiler to continue to operate, but as an auxiliary to other kinds of heating, which was an air source heat pump in this instance. The pumps do that in such a way that completely redoing the central heating, and so on, in the home is not required. The house can work very well with a combination of technologies working together effectively to decarbonise the heat in the home.

Biomass pellet boilers certainly can be considered in homes, as indeed can renewable LPG. As hon. Members have mentioned, LPG is a drop-in fuel that can be put straight into systems—more or less, but not quite—as they stand. The issue with renewable LPG is whether we can get enough of it to work well in systems if we use it on a widespread basis, because it is a particular by-product of other processes that are limited in total size.

The Government also ought to be considering, just as they should with hydrogen, the best uses for the alternative fuels. For example, what are the lowest-carbon uses for LPG or hydrogen? Do we put all our hydrogen into heating homes, transport and logistics, decarbonising heavy industry, or whatever? The Government must make that choice in terms of the priorities they put forward for those different forms of low-carbon fuels, and bioLPG is certainly one of them.

I would criticise the Government not on their timescale or their ambition to decarbonise the off-grid area, but on the fact that they have not looked properly at the options that could be available to decarbonise those off-grid properties in the most efficient way. The Government will have to work on rectifying that if they are to get public backing for that decarbonisation over the next period. That is essential in getting not only off-grid properties decarbonised efficiently but, in general, our homes heated in a low-carbon way. Certainly, if the wider debate ends up with people marching down the street protesting that the Government are ripping out their boilers in an assault on their liberties—because they do not have a decent option to decarbonise by consent —then we will not have achieved our objectives at all.

In the debate on energy prices, as hon. Members have mentioned, we ought to recognise that off-grid properties are suffering far worse than on-grid properties from the energy price crisis. First, the average bill for an off-grid property tends to be higher, but also the fuels used for off-grid properties are not subject to the price cap. Off-grid fuel price rises have far outstripped those for on-grid customers. That, I think, is something that the Government ought to take account of in their approach towards underwriting and assisting those properties with their energy costs in future.

The issue is not strictly the subject of today’s discussion but clearly comes into how we ensure that the public are properly behind the decarbonisation of their properties across the board, and particularly in off-grid areas. I do not envy the Minister the task of getting that right, and I know that it is a real knotty problem, but I am sure that he will be able to provide us with some good pointers to ensure that we decarbonise our off-grid properties in the most efficient way that we can, and with the most public support that we can get.

--- Later in debate ---

[Greg Hands]

Insulation is only one part of the picture when it comes to energy efficiency. I am delighted that the hon. Gentleman has recognised, and reminded us all, that energy is reserved to the UK Government. That is always refreshing to hear. I keep telling people in Scotland, “Thank God it is reserved, so that we don’t have to embark on the anti-nuclear policies of the SNP, or the anti-oil and gas sector policies,” even though the main emphasis of the oil and gas sector is indeed in Scotland.

On the regulator of the gas grid, as I have said, the CMA can intervene. Gas and electricity markets are considered natural monopolies when it comes to the grid. They are characterised by high fixed costs and start-up costs. For those reasons, these markets fall under the remit of Ofgem regulation. The heating oil market—

[Dr Whitehead]

On the subject of support for these measures, the Minister does not appear to have spent any time talking about what support there might be for heat pumps. I am sure that the right hon. Member for Clwyd West (Mr Jones) would be interested to know how the support that has been put forward so far— 90,000 heat pumps installed up to 2025 under the boiler upgrade scheme—relates to the turnover of boilers in off-grid properties. Replacing all of those with heat pumps would take up the entire support scheme for heat pumps in one go, when that support is supposed to be for the whole United Kingdom. By the way, the target of installing 600,000 heat pumps by 2028 will clearly fail miserably.

[Greg Hands]

The hon. Gentleman raises a good question. It is born out of a common misconception, particularly in the Labour party, of what the boiler upgrade scheme is all about. He is expecting—maybe because that is ingrained in the Labour party—that it is the role of the Government to come by and install a new heat pump for everybody across the country. That is not the role of the Government. The role of the Government here is to help stimulate the market and ensure that the private sector makes the adjustment and provides the heat pumps. That is what it is about—not dividing up a £450 million boiler upgrade scheme by the number of people in Britain and working out that it is not enough money for every person to get a new heat pump.

The idea is to provide enough stimulus to the market so that it responds, and also to go with the grain of human nature; the phase-out date is 2035, because people’s gas boilers will naturally come up for renewal in the course of the next 12 years, and during those 12 years, they will be incentivised to purchase a heat pump, rather than a replacement gas boiler. The idea is to stimulate the market. I remember the response of the market when we announced the heat and buildings strategy. I clearly remember Octopus Energy saying that the grant should quite soon enable the cost of a heat pump to be comparable to that of a gas boiler, and to become competitive over the lifetime of that installation.

[Dr Whitehead]

Will the Minister give way?

[Greg Hands]

I need to leave a few minutes for my right hon. Friend the Member for Clwyd West to respond, so I will not take a further intervention.

The basis behind the boiler upgrade scheme is not to provide everybody with a new heat pump. The idea is for the Government to prime the private sector to be able to do exactly that. The hon. Member for Southampton, Test says that heat pumps do not always work, but they frequently do. They are the only proven, scalable technology to decarbonise heating, although there might be hydrogen and other technology developments in the future. As I have said, Sweden and Norway have done this at scale. We will ensure that heat pumps can only be installed on suitable properties, and that there is a greater degree of choice for less suitable properties.

The hon. Member for Southampton, Test said that off-grid properties are suffering more from the current price rises. If he is saying that off-grid properties are facing a bigger increase in their energy costs than on-grid properties, I invite him to send me some firm evidence of that.

To conclude, I reiterate that decarbonising buildings off the gas grid will be key to delivering on Government priorities. It will protect rural consumers and businesses from high and volatile energy costs, and further strengthen our energy independence. We are taking action, and will continue to act to ensure the transition is smooth, fair and affordable for off-grid households, and rural customers and businesses.