Chief Strategy & Regulation officer, Dr Tony Ballance shares his response to the CCC Carbon Budget.
The Committee on Climate Change (CCC) has today published its 6th Carbon Budget, and there is certainly much to welcome within it.
I was delighted to read the CCC’s call to mandate hydrogen-ready boilers by 2025 at the latest. For some time now, Cadent has been pushing for this policy change – which will mean that every replacement boiler installed after 2025 is ready for the conversation of the gas network to hydrogen. Ensuring these boilers are progressively rolled out across the UK will significantly reduce cost and disruption for customers when the hydrogen transition comes. That is an outcome we wholeheartedly support.
More broadly, I am very pleased to see the CCC recognise the important role hydrogen can play in moving towards Net Zero, including in decarbonising heating as well as transport and industry. Policy proposals such as the CCC’s for 250 hydrogen vehicle refuelling stations by 2040 and the development of hydrogen technology to reduce industrial emissions by 7 MtCO2e per year by 2035 are laudable, and initiatives Cadent welcomes. We are ready to work closely with partners from across Government and the private sector to support these.
That is not to say, however, that there aren’t elements of the CCC’s 6th Carbon Budget which are a little cause for concern.
Are heat pumps the answer?
The CCC has focussed strongly on heat pumps as a route to decarbonising heat. Heat pumps are a clearly more mature technology than hydrogen heating systems, so the CCC’s decision to direct their attention towards that technology is understandable. However, while heat pumps are a fantastic piece of technology in the right circumstances their limitations are important to understand.
The CCC’s position on the decarbonisation of heat seem to be predicated on an assumption that almost two thirds of homes would be suitable for refitting with heat pumps. This may be an assumption which fully considers the significant disruption a widespread rollout of heat pumps would bring to consumers, be it through the behaviour changes heat pumps require or the massive cost implications of insulating houses to make them heat pump ready.
However, we are concerned that these factors may not have been fully considered. I am keen to ensure that in the move towards decarbonising heating, the UK does not rush towards the wrong solution and in doing so, negatively impacts on those who currently rely on the gas network to heat their homes and businesses.
Impact on customers
Any change also needs to consider fully the poorest in society.
The CCC’s proposals to make natural gas more expensive, by pricing carbon, have to be seen as a sensible step in delivering Net Zero in terms of stimulating the transition towards electric heating solutions. But at what cost?
The people who will suffer from that policy prescription the most are the poorest in society. Increasing the cost of natural gas will make the poor poorer, and will hurt those who are least able to convert their homes to a low carbon heating solution – be that because of tenure or simply because of their financial limitations.
The cost of natural gas will have to increase as part of the transition towards Net Zero, but the impact of such a price rise has to be closely considered together with wider policy options to ensure those who already struggle to pay their fuel bills are not, quite literally, left out in the cold.
Cadent will continue to work with the CCC and partners across the energy world to ensure a the transition to Net Zero can be achieved ensuring that we don’t lose sight of what the changes ahead mean for those who matter the most: the consumer.