The three phases of the heat transition
The UK is in the early stages of a heat transition. Most of us currently use fossil fuel boilers to heat our homes, and we need to replace them all with low carbon alternatives. To meet net zero we need to have replaced all fossil fuel boilers by 2050, or maybe a little earlier. That may be even more complicated than it sounds.
The heat transition will involve a number of changes with significant knock on consequences — most notably a big expansion in electricity demand and a big drop in the number of homes using gas. With so many moving parts to consider, we will need to plan the heat transition in more detail than we currently do.
To help us plan this heat transition, it may be helpful to split it into three phases between now and 2050. Each of these will require different plans and policy approaches.
1. The growth phase (Now to 2035 / phase out date for new boilers)
The first phase is all about growing the low carbon heating industry steadily every year. The key aim for this phase is to develop enough capacity to install low carbon heating systems in every home replacing its heating (likely to be some way over 1 million homes per year). Although this will begin to reduce the number of boilers in homes, they will remain the most common form of heating until some time after the phase out date.
2. The replacement phase (2035 to Early 2040s)
The second phase involves replacing all the fossil fuel boilers that reach the end of their life. Over a few years, this will dramatically increase the stock of low carbon heating systems and reduce the number of boilers in operation, meaning a big increase in electricity demand and a big reduction in the number of homes using gas.
3. The decommissioning phase (2040 to 2050)
The third phase will see the replacement of the final fossil fuel boilers. As the number of households using gas for heating declines, the gas distribution grid is likely to become progressively more expensive to run, and will likely need to be decommissioned or replaced.
The chart below sets out a stylised view of these three phases, based on what a successful UK heat transition would look like. The reality is unlikely to be this neat.
Planning the heat transition
Given the complexity of the heat transition it will need to be more carefully planned than is currently the case.
Forward planning would allow for:
- Identifying local bottlenecks in the electricity grid that may arise from increased demand from low carbon heating
- Identifying areas where the number of homes using gas is likely to decline more rapidly, affecting the viability of the gas distribution grid
- Connecting energy infrastructure — especially the distribution network — to the local government planning system
- Identifying opportunities for collective switching to low carbon heating
Identifying neighbourhoods for zoning as heat networks or other shared heating systems.
In the first phase of the heat transition, this planning will focus primarily on increasing uptake of low carbon heating and managing grid constraints. But planning for gas grid decommissioning will need to start early, and will become more prominent during the replacement and decommissioning phases, as will the pressure on the electricity grid.
Subsidies and affordability
Making low carbon heating affordable — and financially attractive — to all households is a key prerequisite for a successful heat transition. This will need to be achieved through a mixture of government action — cheaper electricity, access to finance, subsidies — and market innovation, including cost reduction and new offers to consumers.
Growth phase: The emphasis must be on increasing the uptake of low carbon heating each year. This is likely to require significant government subsidies, and the cost to government will increase significantly as more low carbon heating devices are installed each year. Government should also focus hard on making low carbon heating as affordable as possible in other ways, particularly by reducing the cost of electricity relative to gas.
Replacement phase: Government would ideally be able to reduce or phase out subsidies altogether — the number of low carbon heating installations made each year would greatly increase the cost to the exchequer. However, there may be a case for continuing subsidies for low income households.
Decommissioning phase: Attention will likely shift to supporting households remaining on gas. Gas is likely to get significantly more expensive during this phase, as the costs of maintaining (or decommissioning) the gas distribution network are spread across fewer households. The question of how these costs are borne — by households, by tax payers or by companies — will be particularly challenging, particularly for lower income households remaining on gas. There may also be a need to consider increased subsidies for boiler scrappage in the latter part of this phase.
Public consent and support
For the heating transition to succeed, securing public consent and support is essential. This is true at both political level and on the level of individual households and businesses.
During the growth phase, the priority will be increasing the public’s appetite for low carbon heating, making it more attractive and desirable to switch. Without decent levels of public support, it will be harder to implement a phase out date.
During the replacement and decommissioning phases, the key challenge is likely to be persuading the most reluctant households to switch to low carbon heating.
Where more planned or communal approaches to low carbon heating — such as heat networks or street by street transitions — are used, maintaining people’s consent will be especially important.
The heating industry and workforce
The UK’s low carbon heating industry needs to scale up rapidly during the growth phase, adding thousands of additional extra installers each year. It is likely many of these workers and businesses will be current gas engineers who transition into low carbon heating, although growing a pipeline of new entrants to the industry will also be important. If the industry cannot grow quickly enough to replace every boiler by the time of a phase out date, the phase out is unlikely to succeed.
During the replacement phase, the heating industry will begin maintaining more heat pumps as well as installing them. During the decommissioning phase, the number of first-time installs — which typically take longer — should decrease, which may reduce the overall size of the workforce required slightly. The transition from a rapid growth phase into a steady state industry will be challenging, particularly as the majority of today’s gas boiler engineers will have retired by the 2040s.
This is in many ways a stylised and simplified view of what the heat transition will involve, but it may provide a framework for developing long term policies. While many of the decisions that need to be made towards the end of the heat transition seem a long way away, these policies will have to be developed well in advance of being implemented.
One thing seems clear about the heat transition: there are too many moving parts for a purely ‘organic approach’ to be relied upon. To achieve a successful transition, it will need to be planned to a degree.
