My Lords, the Government remain committed to the ambition set out in the Prime Minister’s 10-point plan to install 600,000 heat pumps every year until 2028 to make the UK’s homes warmer and more efficient. We already work closely with local authorities on heat-pump delivery, through schemes such as the local authority delivery scheme. The upcoming heat and buildings strategy will set out further details on how we plan to meet this ambition.
I thank the Minister for his reply. Does he agree that local authorities are well placed to provide the direct engagement and advice required if consumers are to be persuaded to switch to heat pumps in sufficient numbers to meet the Government’s target? Therefore, will the forthcoming heat and buildings strategy introduce properly funded local-area-wide heat and energy efficiency plans to help drive the switch?
The noble Lord makes a very good point. I have worked closely with local authorities on many of these schemes. The heat and buildings strategy is a priority, and we are aiming to publish shortly after the conclusion of the local elections in England and, of course, the elections in Scotland and Wales. The strategy will set out the important role of local authorities in supporting heat decarbonisation, including raising awareness of the support available to increase voluntary uptake of low-carbon heating systems.
The noble Baroness draws attention to an important problem. Of course, given the diversity of heat demand, no one solution can provide the best option for everyone; we suspect that a mix of technologies and customer options will need to be available if we are to be able to decarbonise heat at scale, particularly in blocks of flats.
My Lords, with large numbers of young people and skilled older workers being thrown out of work as a result of the pandemic, is this not the ideal opportunity for the Government to level up by recruiting, retraining and skilling up a green workforce in places such as the north-east—which the noble Lord knows well—to carry out the required conversion work to heating systems in millions of homes and to ensure that green heating systems are installed in all newbuilds going forward, so that we meet our carbon-reduction targets?
It is indeed a good opportunity; I agree with the noble Lord. He will be aware that we recently announced a net-zero building package worth around £3 billion, and the Government are also working closely with industry to ensure that technical education provides new entrants with the skills that will be needed to install these new low-carbon heating systems.
My Lords, I declare my interest, as in the register. While installing heat pumps in all newbuild homes makes a lot of sense, 23 million existing homes have gas heating that needs to be replaced as well. Estimates for doing this vary between £5,000 and £10,000 per household; I leave noble Lords to do the maths, but clearly we are talking about astronomic sums of money, even if it is spread out over the years ahead. Is this really the right resource priority in checking the fast rise in global emissions that is about to be resumed, thanks largely to Asian coal burning, when emissions should actually be falling and not rising at all? Should we not now be refocusing our strategic aims and resources more on the real-world climate dangers before us?
My noble friend will be aware that, if we are to meet what is now a legally binding net-zero target, practically all homes—both new and existing buildings—will need to be net zero by 2050. We expect the cost of heat pumps to fall in a mass-market scenario, and the action that we are taking will help to bring down these costs—but the noble Lord highlights an important problem.
From talking to my local authority colleagues, I know that their concern is that, for heat pumps to work effectively and actually reduce fuel bills, homes first need to be retrofitted to quite a high standard. However, it is commonly acknowledged that, as the Committee on Climate Change report last year stated, these policies are deemed to have failed, mainly due to the public’s reaction to them. Basically, they cost too much, and it is too much hassle. So does the Minister agree that getting the public on board with retrofitting is a crucial first step towards meeting net-zero targets and that local authorities are absolutely crucial to that task? We must take the public with us.
Indeed I do agree with the noble Baroness that we have to take the public and local authorities with us. As we will set out in the upcoming strategy, we acknowledge that there is further work to do to understand the many constraints that are facing us and how best we can work with both the public and local authorities.
Is the Minister aware that, within the current calculations of energy performance certificates, air-source heat pumps are given a poor rating on the basis that electricity is seen as an expensive way to heat a property. With current requirements to have at least an EPC E rating for any domestic residence, rising to a suggested D rating by 2025, could the Minister confirm that EPC regulations will be reviewed to reflect energy efficiency rather than the cost of energy?
My noble friend well reflects my correspondence—I am receiving a lot of letters on this important issue at the moment. A call for evidence was issued in 2018 on how further to improve EPC accuracy and reliability and how these changes can be implemented. As my noble friend may be aware, the Government have published an EPC action plan detailing a series of actions that we can take to improve EPCs.
My Lords, is the Minister aware that if all our demand for heat as a nation goes electric, at peak heat requirement we will need five times the current peak electricity generating capacity, and that does not include any extra demand for electric cars and transport? What will the Government do to ensure that we have the correct and renewable generating capacity to cater for this revolution?
We already work closely with Ofgem and key electricity network stakeholders to assess the network impacts and the future requirements arising from the increased deployment that the noble Lord highlighted. The work is focused also on how these requirements can be met cost effectively and practically, and on the potential role of flexibility in switching demand away from peak times.
My Lords, in the absence of a heat and building strategy, with only a scattergun, 10-point plan at the start of another financial year for local councils, what will the Government implement to co-ordinate local area energy planning into an effective patchwork of integrated solutions, starting with incremental core funding schemes?
My Lords, I refer to the undertaking given in the Minister’s letter of 25 January to a director of a company in the domestic heating decarbonisation sector promising that the green homes grant would support shared ground source heat pump installations in high-rise apartment blocks owned by social landlords. Up to last week, only one ground source heat pump had been supported by the GHG. When will this undertaking be implemented?
My Lords, decarbonising home heating, responsible for around one-fifth of our emissions, is an enormous challenge. There are a number of different technological approaches to meeting it, not just heat pumps, all with uncertain practicality and unsettled economics. The Government have published a road map and a timetable for the transition to electric vehicles. Will they produce an equivalent plan for home heating?
Yes is the short answer. As I mentioned earlier, we are developing options for how a long-term framework of policy approaches can set us on a path to decarbonising heat, homes and buildings. The heat and building strategy will set this out in more detail.
My Lords, is my noble friend rural-proofing the new strategy? He will be aware that a lot of houses in rural areas are off the mains gas grid and will need alternatives because heat pumps are so expensive. Is he considering bioenergy fuels and other alternatives?
Heat pumps are probably the best way of deploying electric heat in many rural areas, but we agree that it is a problem in rural areas that are not connected to the mains gas grid and often have shaky electricity supplies as well. This is a challenge that we are aware of, and we are meeting many representatives from the sector to work out how we can overcome these problems.
My Lords, all supplementary questions have been asked. We now move to the next Question.