Gearoid Lane, CEO
Last week, we responded to the Ministry of Housing, Communities & Local Government (MHCLG) consultation on the Future Homes Standard. This consultation sets out MHCLG's proposed options to increase the energy efficiency requirements for new homes in 2020. The Future Homes Standard will require new build homes to be future-proofed with low carbon heating and higher levels of energy efficiency, and it will be introduced by 2025.
Delivering the Government’s legally binding commitment to net zero carbon by 2050 is going to be very challenging, particularly in producing and transporting sufficient zero carbon energy to meet the nation’s electrical and transport demands. It is therefore imperative that we minimise the demand for energy to heat new homes. We would characterise the approach taken by MHCLG in the consultation as aiming well below what is commercially feasible on building fabric and assuming instead that heat pumps, powered by zero carbon electricity, will take up the strain in delivering net zero for new homes.
We believe it is completely wrong for MHCLG to jump to the conclusion that the universal answer for new build is heat pumps in the absence of Government producing its Heat Strategy. There is an increasing weight of opinion that a hybrid solution to zero carbon heat, with regional/local solutions involving electricity, heat networks and zero carbon gas, is the better solution to decarbonisation. See for instance the recent report that the Energy Networks Association commissioned.
Notwithstanding what may emerge from the Government’s Heat Strategy, it is clear that the challenge of decarbonising electricity is huge. Progress on decarbonising the current 300TWh of electricity has stalled at just over the 50% mark in the last two years but, with the retirement of nuclear capacity planned over the next few years, that trend will need to be reversed and progress accelerated. That is before we add in any incremental requirements for transport and heat pumps, the need for energy storage to deal with increased intermittency as well as the associated electricity grid reinforcements. These are massive costs.
We would therefore suggest that even if heat pumps are the solution, MHCLG should assume that the total system cost of increased electricity demand should be taken into account before aiming for anything less than maximum building fabric efficiency. It seems to us very likely that the high marginal cost of additional generation (particularly for the peaks associated with electricity for domestic heat) would be sufficiently large to justify significant investment in fabric efficiency rather than following an artificial trade off with heat pumps. Our strong view is that if MHCLG are aiming for anything short of the best commercially available technologies and products for building fabric, then MHCLG must carry out an analysis of the costs that this will be storing up for the future.
The consultation closes at 11.45pm on 7th February 2020. If you'd like to respond, you can input your responses online here.