This is a key policy of the Government. We will publish a heat and building strategy in early 2021 that will set out the immediate actions we will take for reducing emissions from buildings, including deploying energy-efficient measures and transitioning to low-carbon heating. This ambitious programme of work will enable the mass transition to low-carbon heat and set us on a path to meet our net-zero 2050 emissions targets.
I thank the Minister for her reply —it is good to hear that the heating and building strategy is on its way. Since this directly affects every household in the country, it certainly deserves priority in the follow-through to the PM’s 10-point plan. Bearing in mind that heating by gas has to end, but its alternatives —clean electricity and hydrogen—are at least twice as expensive, will the strategy ensure that decarbonising our heating does not lead to a massive increase in fuel poverty?
The noble Lord is absolutely correct in the points that he makes. A number of options have the potential to play an important role in decarbonising heat and we are exploring many of them simultaneously. Improving the energy efficiency of people’s homes is the best long- term solution to tackling fuel poverty. The Government have already introduced a statutory fuel poverty target to get as many fuel-poor homes to a minimum energy-efficiency rating. Furthermore, the energy company obligation scheme is focused entirely on low-income and vulnerable households.
My Lords, to follow on from the question put by the noble Lord, Lord Best, domestic gas boilers are widely used, not least in blocks of flats. To end reliance on fossil fuels, alternatives will need to be installed. What are the Government’s plans to deal with this problem?
The noble Baroness makes good points. The Government are not banning the installation of natural gas boilers, but to achieve net-zero emissions we will have to transition away completely from traditional gas boilers. We are continuing to explore how clean electricity, hydrogen, green gas and indeed shared heat networks in blocks of flats can contribute to achieving our net-zero target.
I should draw attention to my interests as chairman of a renewable heat company and as an advisor to many developments on planning matters for sustainable communities. The point that I make is one that will apply throughout the development sector and all techniques. The sector needs an early decision—it is welcome that the Government are doing this—but it also needs a long-term decision, because every company, builder, housebuilder and retrofitter needs to know what will be in place for a decade or more in policy terms, not short-term solutions.
The noble Lord raises a good point, but I hope that he is somewhat reassured by the 10-point plan, which has the potential to deliver £42 billion of private investment by 2030, accompanying £12 billion of government investment. This will create and support 250,000 green jobs by 2030. I think that the noble Lord will acknowledge that this is a long-term plan. It will be achieved through a combination of subsidies and investment by the Green Investment Bank.
My Lords, I welcome the Government’s 10-point plan, but what is being done to install more heat pumps? At the current rate of progress, it will take over 700 years to reach the target set by the Committee on Climate Change of 19 million heat pumps for the country.
I hope that it will not take that long, but one of the main pillars that my noble friend will have read about in the 10-point plan is the installation of at least 600,000 heat pumps per year by 2028. Given that the life of a boiler is usually up to three years, as each boiler rolls over we hope to be able to install more heat pumps at a natural rate. Hybrid heat pumps are being seen as a potential transitional economy, which we are also exploring.
The numerous commitments to significant government support to the hydrogen development sector in particular give us as a nation, free from pan-European competition regulations, a real chance to direct government investment into British technology and the development of British IP. What effort will be made to direct this investment into UK businesses rather than UK-based subsidiaries that feed the profits of foreign companies?
I think that the noble Lord is referring back to the mistakes that we made in the development of the offshore wind market. We are determined not to make the same mistakes. The profit from the technology that we develop in floating offshore wind and other green technologies, including the significant investment that we are making into hydrogen energy development, will provide, I hope, some reassurance.
The number of unpublished plans, statutes and White Papers will soon outnumber the scattergun 10-point environment plan. With most buildings being heated by gas, solutions to a decarbonised gas system utilising the existing infrastructure point towards a hydrogen-based gas system. What emphasis or consideration are the Government giving towards a photocatalyst material that utilises more light to harvest more hydrogen from water? That was part of my question to the noble Baroness last week. Is she satisfied that sufficient investment is being directed towards new technologies that can then be commercialised by start-ups to scale them up into solutions?
The noble Lord will be reassured that the hydrogen strategy paper will come out early in the new year. In answer to his question about photocatalyst material, I believe that the Active Building Centre in Swansea is working towards achieving new building materials and coatings that generate electricity from light and, indeed, from heat. This energy could be used to power hospitals and schools as well as homes, or it could be sold back to the national grid. This is being supported by a £36 million government grant.
Of course the work of the climate change committee informs much of the Government’s work at the moment. It has to be said that it is often a bit more ambitious than our plans, but it is an integral part of our decision- taking.
This is indeed a difficult area. The Government’s forthcoming fuel poverty strategy aims to reduce barriers to accessing support for households living in these sorts of home types, including park homes and similar. Many suppliers now provide the £140 warm home discount rebate to otherwise eligible households living in park homes through the warm home discount industry initiatives. Such households may additionally benefit from the green homes grant voucher scheme, which can provide up to £10,000 for low-income households in order to improve the energy inefficiency of their homes.
Can my noble friend confirm that the cost of installing heat pumps—£10,000 per household plus new boilers—will fall disproportionately on low-income households in the colder, northern parts of this country and least on the virtue-signalling better-off in London? She may recall that I voted against the Climate Change Act because its impact statement showed that the potential cost was twice the maximum benefit. What does the cost-benefit analysis of these measures show?
I recognise the concern that my noble friend raises in his question. However, the cost of not decarbonising heat and developing greener buildings could be an awful lot greater if it falls on future generations. The benefits will be the ability to export green technologies developed in the UK, with support for many more jobs in the green economy. The Government already spend £1 billion per annum supporting poorer households through the ECO and the warm homes discount.
Are the Government in their heat and housing strategy doing everything possible to use the heat from nuclear power stations? Some 40% of the energy from nuclear reactors, including small modular reactors, is emitted in the form of heat, which can be captured in district heating systems to heat buildings. It can also be used to produce hydrogen and other low-carbon fuels, thereby making the cost of nuclear power competitive with that of renewables.
The noble Lord is quite right on the science of his question. Indeed, the heat produced by nuclear power stations can be used for many other purposes, rather than just heat networks. After all, nuclear power stations in France are sited often much closer to conurbations than they are here. As for heat networks, the pipe infrastructure is fuel agnostic. Once infrastructure is in place, heat networks can be developed to exploit a range of lower-carbon heat sources. The Government believe that nuclear could have a role in beyond-the-grid applications, including hydrogen production. All nuclear reactor technologies have the potential to feed into the hydrogen market, by producing either low-cost electricity or heat for increasingly efficient electrolysis production.