Smart Systems and Heat: Phase 1

Decarbonising heat is the biggest challenge the UK faces in terms of transforming the energy system to meet carbon reduction targets and achieve our clean growth ambitions. Yet low carbon heating must appeal to consumers if the UK is to tackle climate change.

Energy Systems Catapult delivered the UK’s largest smart, consumer-focused project aimed at overcoming the barriers to the decarbonisation of residential heat – the Smart Systems and Heat (SSH) programme.

SSH Phase 1 (2014-2017) focused on developing capabilities, tools and insights for Local Energy System Modelling and Domestic Energy Services and was delivered by the Energy Systems Catapult for the Energy Technologies Institute.


The Challenge and Opportunity

Heating accounts for 37% of  total UK carbon emissions, with heating for our homes and buildings responsible for around 20%.

To achieve our Net Zero targets, the UK’s 27 million households will need to rapidly adopt new low carbon heat solutions through the 2020s and 2030s.

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.

The Project

The SSH programme focused on delivering the UK’s largest smart, consumer-focused project addressing the decarbonisation of residential heat, by building:

  • Deep understanding and evidence around consumer needs and how to harness low carbon solutions;
  • Key tools and capabilities to help industry, local authorities and policymakers.

SSH phase 1 was delivered by the Energy Systems Catapult for the Energy Technologies Institute and in partnership with Newcastle City Council, Greater Manchester Combined Authority and Bridgend County Borough Council.

SSH Phase 1 (2014-2017) focused on developing capabilities, tools and insights on:

  • Local Energy System Modelling – we designed a planning framework to help local government, energy networks and other key local stakeholders prepare for a low carbon future in an cost-efficient and strategic way.
  • Consumer-focused Propositions – research revealing consumers experiences with home heating and how smart technology can help energy providers understand what consumers want from heating, turning passive bill-payers into discerning customers.
  • Domestic Energy Services – investigated how the emerging ‘smart home’ could help consumers get high quality experiences from low carbon heating solutions.

Our Outputs

1. Local Energy System Modelling

We designed a planning framework to help local government, energy networks and other key local stakeholders prepare for a low carbon future in an cost-efficient and strategic way.

Insights from our “Local Area Energy Planning” reports include:

  • Local Area Energy Planning should be integrated with the Local Plan process, encouraging a Whole Systems approach to meeting the challenge of climate change, fuel poverty and cost effectively transitioning local energy systems.
  • Central government should consider how to support and co-fund local areas to undertake Local Area Energy Planning to help understand options and plan to decarbonise local energy systems. Considering the role of local government and other local bodies such as the recently established local energy hubs in facilitating this.
  • Due to their fundamental role in the energy system, energy network companies should actively participate in Local Area Energy Planning, working with local areas, as part of their obligation to take a Whole Systems approach under the RIIO-2 framework.
  • Utilise Local Area Energy Planning to target investment in housing retrofit programmes and heat network development, to ensure cost effective decarbonisation of the whole energy system.
  • Build up a knowledge base of insights from Local Area Energy Planning, so that local characteristics and options for decarbonisation can inform national energy strategy.
  • To rationalise current practices, support and publish data gathering standards and requirements for organisations (e.g. local government and energy network operators) responsible for the collation and spatial representation of energy use, assets and infrastructure.

2. Consumer-focused Propositions

Research revealing that consumers care more about their experience of using heat, than how it is delivered. From enjoying a hot shower to using heat to relieve pain, many consumers are initially unaware of the value that heat is adding to their lives. People care more about their experience of using heat what the type of device (eg. gas boiler, district heat, electric heat pump) is delivering the heat. We explored how the smart technology can help energy providers understand what consumers want from heating, turning passive bill-payers into discerning customers.

Insights from our How people can get the heat they want, without the carbon? report include:

  • We found 2/3 of households report suffering at least one of these problems – draughts, damp, mould and overheating (even in winter).
  • Few consumers realise how much they value using heat to improve their health, relationships and property. Most rely on heat to relieve aches, host guests or prevent pipes freezing.
  • Yet many endure problems to avoid the hassle, disruption and challenge of tackling them.
  • We found people care far more about their heating experiences than how the heat is delivered. Yet varied in which experiences they valued and how much they wanted to spend on them.
  • Virtually no-one presently knows all of their heating upgrade options or which they think are worth the cost.
  • Every home needs upgrading in different ways to deliver these experiences without emitting carbon. It is technically challenging to design solutions that will work well, and each home has unique features.
  • Most consumers liked the idea of buying a service, like a warm home, rather than kWh of fuel and a boiler, controlled from a smart home technology.
  • They would prefer to be able to trust these energy services providers to simplify this complexity of selecting and installing an upgraded low carbon heating solutions, as long as they could still control their experiences.

3. Domestic Energy Services

Society is progressing toward connected homes, which is likely to enable a profound change in the way people buy energy; away from input commodities people can’t understand toward service outcomes people value. We explored how energy providers could use data from the emerging ‘smart home’ could enable profound changes in their energy retail provision, such as selling ‘Heat as a Service’ instead of units of fuel, to deliver high quality heating outcomes that consumers really valued. We also looked at how this could be used to accelerate the switch from gas central heating to low carbon alternatives, including the need for commercial, policy and regulatory arrangements to converge.

Insights from our Domestic Energy Services report include:

  • Underpinning such a profound change in energy retail services will be the emergence of open data frameworks and advanced machine learning.
  • Carefully designed user experience can help people become discerning customers, discovering what they value and expressing their expectations to retailers.
  • Data analytics reveal opportunities for helping customers to achieve better comfort experiences and to determine how best to deliver low carbon solutions.
  • Innovative future services could focus on selling the experiences people value, opening  new business opportunities to capture new value beyond the meter – by using a new dialogue and new datasets to help people obtain the heating experience they want.
  • Central to a profound change in domestic energy retail will be the emergence of a service language with which customers and suppliers can align expectations.
  • Data enables ‘warm hours’ to be priced like insurance offerings, given the inherent uncertainties due to the fabric of the home, how it is used and energy costs.
  • There are potential market failures that could be avoided by thoughtful early design to ensure device vendors can capture a share of value from services.
  • There are significant opportunities to better integrate low carbon heat components and improve the quality of connected home devices for the mass market.
  • Installation and maintenance teams are critical in a customer’s journey towards connected homes and advanced energy services, but they need to prepare.
  • Decarbonisation could help the vulnerable access basic energy services, but there are also risks