Combined Heat & Power

Demand Side Services

Energy Efficiency

Heat Networks

BEIS back 20-fold growth of heat pump supply chain now

19 March 2021

The Department for Business, Energy and Industrial Strategy has further backed the rapid expansion of the heat pump industry, building on its commitment to see 600,000 heat pumps installed annually by 2028.

This week BEIS told industry that the heat pump supply chain could grow 20-fold before any strategic decision on heat decarbonisation in the UK needs to be taken.

Speaking to members at the Association for Decentralised Energy’s Winter Reception, Danny Newport, Deputy Director, BEIS Heat and Buildings Strategy team, said the Government wanted to see the full mix of heat decarb scale.

Answering a question on the risk of creating stranded assets, Danny said he did not believe there was any immediate risk of making the wrong decision about technology, and the deployment of market-ready technologies should not be delayed while the Government makes long-term strategic infrastructure decisions.

He added that Government would be much more successful at making such decisions once technologies had been allowed to scale.

“I think we can grow the heat pump supply chain 20-fold before even getting close to a regret level of deployment.” 

“Similarly, with heat networks, there are areas of the country that heat networks are always going be better suited to a heat network, we are unlikely to regret that.”

“We are going to be much more successful at addressing these big strategic decisions when we are choosing between a number of winners that are in motion, than we are trying to do it today where we have a static choice between two or three options, neither of which are a genuine consumer proposition at scale right now.”

Danny confirmed that the Government’s Heat and Buildings Strategy is unlikely to be published until May.

Danny said:

“This is a really big priority for the Government at the moment, and the fact that it is taking a little while to get out reflects the level of attention and involvement across Whitehall that is going into the Net Zero sector strategies in the run up to COP this year. It is an agenda that is very, very high on the political agenda right now, from the very centre outwards.

“There are real big no regret steps that we can take, and we can take them now and the strategy is going to be about how we can do that with a mind to the difficult decisions that are coming down the road to us.”

This was echoed by headline speaker and Parliamentary Under Secretary of State at the Department for Business, Energy and Industrial Strategy, Lord Callanan, who opened the ADE’s annual reception.

Lord Callanan said:

“Through government funding, through industry effort, I want to see a growth in the industry supply chain securing benefits for Britain and British companies by increasing the number of green jobs and helping us evolve into low carbon leaders with a thriving export market.”

The ADE’s Winter Reception brought together industry leaders for a high-level discussion on how to decarbonise heat, with the event addressing the full range of technologies involved, including heat pumps, heat networks, hydrogen, energy efficiency, and demand side flexibility.

A theme of needing to act quickly on heat decarbonisation emerged, with all speakers calling for market-ready technologies to be deployed now, rather than wait for strategic decisions to be taken by the Government.

Chris Stark, chief executive officer at the Committee on Climate Change also used his opening address to call for action, saying: 

“We have been gripped by making the wrong decision for too long. There are a set of properties where we know what the right solutions will be and we should be moving to put that quickly in place.” 

He was joined on a panel by Clem Cowton, Director of External Affairs at ADE member Octopus Energy, the ADE’s Head of Policy Caroline Bragg, and Karl Drage, director of strategic business development at Kensa Heat pumps, which also sponsored the event.

While welcoming the Government commitment to immediate action, Karl highlighted the role zoning - a street by street approach - and more strategic thinking could play in the transition. 

Karl said:

“We need to consider the whole life, whole system cost and carbon emissions.  True value-for-money is really important to the consumer.  Often consumer choice is modelled as if cheapest up-front wins.  But you have to consider the cost of the supporting utility infrastructure, and the potential for private finance to fund long-term assets - in the same way as mobile phones are funded.  You probably don't have the cheapest phone, you have the one that is more user-friendly.  Regarding the cheapest appliances, we must consider the utility infrastructure, and that might not be the right choice for the capacity market or the electricity generators - which eventually consumers pay for - so we maybe need to step in with the zoned approach and help consumers make a choice which is better for them in the long run.”

 

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