Decarbonisation of Heat: Why It Needs Innovation

Published: 18 March 2020

Decarbonising heat is key to achieving Net Zero, and innovators have a vital role to play. Here is our overview of the decarbonisation challenge and how we can tackle it through low carbon home heating innovation.

Why do we need to decarbonise heat?

Heating is the United Kingdom’s biggest source of carbon emissions, which are the fossil fuel gases that contribute to climate change.

In June 2019, the UK Government committed to a Net Zero carbon emissions target across the economy by 2050.

Clean Growth – Transforming Heating: Current Evidence

“Heating is central to our lives. In our homes, we rely on it for comfort, cooking and washing. Businesses need heating and cooling for productive workplaces and heat is integral to many industrial processes. It is the biggest reason we consume energy in our society.”

Department for Business, Energy and Industrial Strategy 

How much does heating contribute to UK carbon emissions?

Heating accounts for about 37% of total UK carbon emissions when including industrial processes. The breakdown of UK carbon dioxide emissions from heating is:

  • Space heating (including a relatively small amount of cooling) = 17%
  • Hot water = 4%
  • Cooking = 2%
  • Industrial processes = 14%.

Of the 17% of carbon emissions from heating (and cooling) in buildings, about 13-14% can be attributed to domestic homes.

Hot water use is significant in the health, hospitality, emergency services and education sectors, driven by demand for washing facilities. Heat demand for cooking and catering is high in the hospitality sector.

Heat is used in a range of industrial processes, from high temperature blast furnaces for making iron through to lower temperature steam in food thawing processes.

Top 5 reasons why decarbonising heat is so hard:

  1. Net Zero targets – under plans to reduce carbon emissions to Net Zero by 2050, certain sectors of the economy will continue to emit carbon that will need to be offset. But that means tougher targets for heating, with most buildings needing to become zero carbon.
  2. Size of the challengeonly about 5% of homes currently have low carbon heating. The UK is dominated by fossil fuel gas – with 85% or about 24.5 million homes heated by natural gas.
  3. No silver bullet solution – low carbon or carbon neutral heating solutions already exist, however a top-down “blanket” solution such as all-electric or all-hydrogen is projected to cost twice (2.28%) or three-and-a-half times (3.51%) as much respectively compared to a bottom-up approach that chooses the best low carbon heating solutions on a place by place basis.
  4. Poor energy efficiency – UK building stock is generally of poor thermal efficiency. Around 2/3 of households suffer from either damp, drafts, or overheating – wasting energy and making home life uncomfortable.
  5. Incentives and workforce – almost half of people (48%) have no awareness of low carbon heating and current incentives do not encourage many households to switch to low carbon heating. For every 100 qualified gas engineers in the UK there are less than two low carbon heating engineers,while 74% of heating professionals were not fully confident in selecting suitable low carbon heating for clients.

What do Net Zero targets mean for heating?

Under the UK’s new 2050 Net Zero carbon emission targets, the Committee on Climate Change expects certain parts of the economy – such as air travel, agriculture and cement-making – will continue to emit some carbon. These emissions will need to be captured using Bioenergy and Carbon Capture and Storage technology or be offset through measures such as carbon sequestration by planting trees.

But for heating, the overwhelming majority of buildings and homes in the UK will need low carbon solutions that enable them to reach near zero carbon by 2050. Though there will be exceptions and some hard-to-treat buildings could continue to be responsible for significant emissions.

Insight and Solutions:

Living Carbon Free – Exploring what a net zero target means for households“The CCC believe average emissions from heating per household need to be brought down from 2,745 kgCO2e to just 138 kgCO2e. This would require natural gas heating to be all but eliminated, either through a switch to hydrogen in the gas network, or a transition to alternative non-gas solutions.”

 

What is the size of the decarbonisation challenge?

Currently, heating in the UK is dominated by fossil fuels, with 85% or about 24.5 million homes (and over two million businesses) supplied directly by the mains gas grid. Converting them to low carbon heating over the next 30 years to 2050 is a similar sized task as the switch to central heating – which took 35 years to increase from 30% to 95% of homes from 1970s,

In comparison, 8.6% of homes are heated by electricity generated by traditional storage heaters or modern heat pumps, 4.1% by heating oil, 0.8% by solid fuel, and 0.7% by LPG. In total, around 3.7 million homes in Britain use non-mains gas fuels for their primary heating, with only the Netherlands having a higher penetration of natural gas for heating across Europe.

Yet 90% of people say they prefer their fossil fuel gas boiler to low carbon alternatives and almost half of people (48%) are not aware that gas boilers are a source of carbon emissions.

Insight and Solutions:

Local Area Energy Planning: this pioneering approach models the unique characteristics of a local area including the type of building stock, existing energy networks, heating technologies available, future electrification of cars, as well as local spatial constraints and opportunities – to help support local authorities, network operators, businesses and communities to plan a cost-effective low carbon transition and choose the right low carbon heating solutions on a place by place basis.

 

What is low carbon heating?

Less than 5% of home heating is currently low carbon – mainly comprising electric heat pumps, wood burners and biomass boilers (which requires burning wood, plants and other organic renewable matter).

Electric heat pumps provide lower carbon heating than gas boilers because the electricity supply of the UK is currently over 50% low carbon – with nuclear power contributing around 20% of generation and renewable energy such as wind, solar and landfill gas contributing around 35%. Low carbon biomethane also makes up a very small proportion of gas content in the existing gas grid, mainly generated using anaerobic digestion technology.

While the electricity grid will need to become zero carbon by 2050, to decarbonise heating at the pace and scale required, there are three main options that will likely be rolled out to homes and buildings in different parts of the UK.

The right options for each household will depend on the Local Area Energy Plan (see above).

Heat pumps: operate like a refrigerator in reverse. Manufacturers offer either air-source and ground-source heat pumps, which sit outside a building and extract warmth from the air or ground to heat water for radiators. Heat pumps are powered by electricity. Hybrid systems with a heat pump and gas boilers are also an option.

 

District Heating: communal heating systems that deliver heated water to radiators in numerous homes and buildings via a system of highly insulated pipes. Heat is generated from a single, local energy source such as a biomass or gas-powered ‘combined heat and power plant’ or local waste heat from industry.

 

Hydrogen boilers: operate with similar functionality to traditional natural gas boilers by heating and supplying water to radiators. Manufacturers will soon make “hydrogen-ready” boilers available to consumers, although hydrogen gas production needs to grow from virtually zero to supply industry and heavy transport as well as heat. Hybrid systems with a heat pump and hydrogen boilers are also an option.

Insight and Solutions:

Heat-as-a-Service: Energy Systems Catapult is running trials with energy companies in the 100-home Living Lab to test the concept of selling a service outcome – a warm and comfortable home – rather than selling units (kWh) of fuel. HaaS helps households to switch to low carbon heating in 3 Steps.

3 Steps to switch to Low Carbon Heating:

  1. Put heat where you want it – install advanced smart heating controls to improve control over comfort and cost, while providing bespoke data on the thermal performance of your home.
  2. Keep the heat where you want it – use bespoke data to make cost effective energy efficiency upgrades to reduce heat loss (and the amount of energy required).
  3. Make the heat low carbon – switch the fossil fuel boiler to the low carbon heating option in your Local Area Energy Plan (see above).

Why is energy efficiency important for decarbonising heat?

In general, UK housing stock has poor thermal efficiency, with around 2/3 of households suffering from either damp, drafts, condensation, mould or overheating.

Improving energy efficiency in UK homes is vital to reduce the amount of energy needed and carbon emitted when heating homes. It also reduces energy bills and improves thermal comfort for residents which contributes to better health and wellbeing.

Low carbon heating technologies – such as heat pumps – operate most effectively in combination with energy efficiency upgrades.

Implementing the easy wins, such as cavity wall and ceiling insulation, are two of the least regret options – and many homes have already had this installed.

Some homes will require more extensive retrofitting, such as external wall insulation and double/triple glazing, which will play an important part in the future energy system and should be targeted appropriately to avoid unnecessary cost. However, very deep energy efficiency retrofits, could be comparable in cost to rebuilding the entire housing stock (in excess of £2t).

Insight and Solutions:

Home Energy Dynamics: this first-of-a-kind simulation tool, models the interactions between different domestic heating systems, consumer data from digital heating controls, building fabric and weather data to help support decision making on low carbon technology retrofits in residential properties.

 

How can we accelerate innovation in low carbon heating?

To get almost 30 million homes to switch to low carbon heating requires more than simply installing of a new heat pump or hydrogen boiler. The UK needs innovation, investment and incentives to ensure low carbon heating is as good of better than what people currently enjoy with gas central heating.

Insight and Solutions:

Living Lab: Energy Systems Catapult has developed a unique real-world trial facility of 100 connected homes, where innovative businesses can rapidly design, market-test and launch smart energy products and services. Innovators can also test installation processes, understand interactions with other products/services, policies or regulations and ensure their innovation works for vulnerable households.

How can we make zero carbon buildings?

Currently around 20,000 homes annually are converted to low carbon heating, yet we need to be converting 20,000 homes a week (1 million annually) by 2025 to hit our 2050 targets.

Innovators are struggling to address this market failure and unlock the commercial opportunity, due to technical, regulatory, economic and social barriers that block new low carbon heat products, services and business models getting to market.

Insight and Solutions:

6-steps to Zero Carbon Buildings: Energy Systems Catapult is exploring a 6-step approach to build markets for zero carbon buildings. Potential policies to drive restructuring and innovation on a grand scale in everything from building products through to smart controls and home energy apps.

 

Heat Decarbonisation Academy: Energy Systems Catapult is exploring options to: better understand the skills and training needed to scale-up the low carbon market across the whole energy system; develop the tools and methodologies needed to create new professions such as ‘home energy advisors’ and ‘systems integrators’; and create a consortium to advise training providers and businesses in the supply chain. 

 

How are we supporting innovators to decarbonise heat?

If you’re working on a low carbon energy solution, we can help by providing support, guidance and access to a wide network of expertise.



Energy Launchpad

We help innovators navigate the challenges of energy system transformation and capture the opportunities, by delivering support across three tiers. So  far we’ve helped 44 SME Innovators with tailored Incubation and Acceleration support to springboard their products, services and business models towards commercialisation and scale up. A further 182 SMEs have accessed our Universal offering.



Universal

The front door to Energy Systems Catapult for SMEs, helping newcomers gain insight about the UK energy system and the Catapult, find partners, access events and workshops, plus sign-posting to: funding calls, investors and international opportunities.




Incubator

Tailored support for selected SMEs utilising the Catapult assets and capabilities, and delivery partner offerings, such as business model development, energy system integration assessment, consumer insights guidance, digital fitness, market testing and validation, investor readiness, specialist advice, as well as identification for Acceleration support.




Accelerator

Scale-up support for selected high-impact potential SMEs. Support includes those areas outlined in incubation but in more depth, as well as help to access demonstration environments such as our Living Lab, engagement with potential corporate clients and investors, and links to international opportunities.