George Eustice, the Environment Secretary, should be roundly condemned for his statement that ‘the technology (heat pumps) is not quite there yet‘. Well, there’s plenty of examples of heat pumps working in this country! The point is that Government policy is practically nowhere to be seen! The big factor in the way of further technological development is the Government’s own policies which have seen big cutbacks in the amount of money available for people to install heat pumps.
Under the RHI people were able to claim funding support of between around £6000 and £11000 over 7 years, depending on the size of their homes, for an air source heat pump. But now, under the new clean heat grant scheme starting in April 2022, people will only be able to claim a one-off payment of £500o. Moreover support is limited to just 30,000 applicants a year, little more than the current annual uptake.
The Government are gas-lighting the heat pump industry (and everyone else) with vague promises (in long-winded reports) about some magical mechanism to supplement this. But the reality is that only more cash for the early installers over the next few years will do the job. This job is to achieve a dramatic increase in installations so that the industry can develop out of its currently fragmented form and reduce its costs.
In fact, now, heat pump installations seem to be largely ghettoised into people who are off the gas grid grid. Sure the bulk of homes are suitable in that case, but they also often tend to be very old rural houses which tend to need more insulation than average.
The prime(est) candidates for heat are new build houses of course, but there’s absolutely no incentive or rule for builders to achieve this. Not only do new heat pump installations need a one-off up front grant, but builders also need to offer their prospective residents heat income support (from a Government programme) for at least as long as was available under the RHI. This is necessary to cover the period when gas prices are too low compared to electricity (and, yes, gas prices will fall!). The Government says it will shift energy taxation from electricity to gas, to narrow the price gap that still makes (in normal times) gas heating too cheap compared to electrically powered heating. Obviously though, this cannot be done very soon.
Of course a real heat pump policy takes more funds, but the sad situation at the moment is that the money is going to the gas industry in one form or another (boiler upgrades, money for blue hydrogen) and the nuclear industry. Heat pumps are getting £450 million in the latest Treasury settlement, but the gas industry will also receive £450 million for boiler grades. Now that will cut emissions in the short term but it will entrench the position of the gas industry. Moreover the emissions cuts will be larger if more heat pumps are installed. On top of that the gas industry are receiving over £100 million in support of ‘blue’ hydrogen which, at best, will compete with green hydrogen and reduce the market available for green hydrogen technology to develop and reduce costs.
Meanwhile EDF, through Sizewell C will be getting at least (almost certainly a lot more) £20 billion, and they will be getting well over £100 per MWh for 35 years for Hinkley C off consumers. The money would go a lot farther much more quickly emission reduction if it was spent on developing the heat pump industry, expanding renewable energy production and in insulating older buildings
The Government pulled off one of the greatest PR con-jobs of all time in declaring how marvellous their heat pump strategy was recently. But they seem to be getting clean away with it.