Environmental Audit Committee warns Kwasi Kwarteng
Environmental Audit Committee of the House of Commons has written to Kwasi Kwarteng asking ten pertinent questions on how the Government proposes to meet its aspiration to raise the number of heat pumps installed from 30,000 a year to 600,000 a year by 2028.
Philip Dunne, the chairman of the EAC, sent an excellent letter to Kwasi Kwarteng on 21 December 2020 asking for a reply by 29 January 2021.
The EAC letter is worth reading in full.
The most significant paragraph reads:
The Government has placed low carbon policy costs on the electricity side of consumer bills. As a result, the cost of electricity is roughly four times more expensive than gas. This drives out operational cost savings for customers relative to gas boiler use and increases heat pump bills. This acts as a significant barrier to heat pump adoption. Demonstrating the operational cost savings that could accrue from heat pump use (relative to gas boiler use) is a key selling point for customers. We were told that reviewing the policy costs across gas and electricity could significantly improve the customer case for heat pumps, making them cheaper to run than gas boilers in many more domestic settings. Will you consider reviewing where policy costs fall on energy bills?
The principal barrier to the uptake of heat pumps in the UK
The letter follows on from strong representations made to the Environmental Audit Committee by the GSHPA in November on the imbalance in the taxes and "environmental levies" placed on electricity as opposed to gas: the cost of the levies and taxes on one kWh of electricity are currently larger than the total cost of one kWh of gas. This is the principal barrier to the uptake of heat pumps in the UK.
The letter asks other important questions such as whether the Government will commit to funding dedicated heat pump training. However, few people will be attracted to training courses until the running costs of electric heat pumps become more attractive to consumers.
The letter asks whether the Government will commit to raising awareness of heat pump technologies to consumers. However, few consumers will become interested in heat pumps until the running costs of heat pumps become more attractive than continuing to burn gas.
The letter also asks the Government to commit to stable long-term support schemes for both the domestic heat pump market and the commercial heat pump market and urges that a "clear direction is needed now to help realise the Government's ambitions".
Electricity costs too high to make heat pumps worthwhile, MPs warn
In a follow-on article in the Daily Telegraph, Olivia Rudgard, their environment correspondent, reports that, "Electricity is too expensive to make heat pumps worthwhile, MPs have warned, as they urged the government to rethink environmental costs passed onto customers in electricity bills".