Asked by
To ask Her Majesty’s Government what is their estimate of the
total cost of replacing gas boilers and heaters in all homes in
the United Kingdom; when any such replacement programme will
commence; and what charges will fall on (1) individual
households, (2) property owners, and (3) tenants.
(Con) [V]
My Lords, I beg leave to ask the Question standing in my name on
the Order Paper. I declare my interests as set out in the
register.
The Parliamentary Under-Secretary of State, Department for
Business, Energy and Industrial Strategy () (Con)
We are currently developing different pathways to decarbonise
heat, and as such it is too soon to estimate these costs
accurately. However, the climate change committee estimates that
the investment required to decarbonise the entire economy and
meet net zero is less than 1% of GDP until 2050. Ensuring that
the costs of transition are allocated fairly is a priority, and
we will publish a call for evidence on affordability and fairness
by April.
(Con) [V]
My Lords, I thank the Minister for that reply. These estimates
are interesting but, according to the Government’s excellent
energy White Paper, there are 23 million existing homes attached
to the gas supply grid. While it clearly makes sense to equip
newly built homes with hydrogen or heat pumps or other
technologies, is not the cost of retrofitting all existing
homes—estimated by a government research paper at anything
between £2,500 and £8,000, or more, per dwelling—and possibly
having to replace large parts of the gas delivery grid as well,
clearly going to be absolutely astronomical, whether it falls on
consumers or taxpayers? Given the tiny contribution, at best,
that this whole project could conceivably make to taking over all
global emissions growth, is this really the wisest or most
effective use of our national resources in combating worldwide
climate change?
(Con)
I understand the point my noble friend is making, but we do of
course have a legal commitment and obligation to reach net zero
emissions by 2050. Of course, 19% of total UK greenhouse gas
emissions come from buildings, so we clearly need to take action
in this sector. We also marry that up with an ambitious
international agenda. We are hosting COP 26 this year and we will
seek to persuade our international partners to follow this agenda
as well.
(Lab)
[V]
My Lords, there are certainly home owners who live in flats on
estates that were possibly originally built as social housing,
with communal gas boilers and integrated estate-wide heating and
hot water systems. Individual solutions will not be possible in
these circumstances. Will the Minister say whether any thought is
being given to such circumstances to quantify the problem and, if
so, what support will be available to replace or upgrade such
systems?
(Con)
I point the noble Baroness to the social housing decarbonisation
fund, which will deliver transformational change by upgrading a
significant amount of the social housing stock that is currently
below EPC up to that standard.
(DUP) [V]
In recognising the Government’s desire to reduce greenhouse gas
emissions throughout the United Kingdom, one must also recognise
the need to ensure that the transition is fair to householders
and businesses. Therefore, can the Minister tell the House what
detailed study has been done to identify any additional costs
there will be to run any new heating system? How can we ensure
that those living in poverty will be able to bear that financial
burden and keep their families warm?
(Con)
The noble Lord is right that we need to make sure that the change
is affordable. We have a number of schemes to help low-income
families. We have the ECO scheme and the green homes grant
scheme, both of which considerably incentivise low-income
families to make these changes.
(Con) [V]
My Lords, may I press my noble friend on this point, bearing in
mind that this will be government-enforced expenditure and will
place a significant strain on many household budgets? Following
this Question Time, will he discuss with the Chancellor the
phasing out of all the means-testing of the winter fuel allowance
and its replacement at an appropriate time with a boiler grant,
especially to all those in receipt of universal credit?
(Con)
We are committed to keeping the winter fuel payment to ensure
that older people have the security and dignity they deserve, but
we do have boiler grants, as my noble friend referred to them,
through the green homes grant that are specifically designed and
targeted at poorer members of society.
(LD) [V]
My Lords, I declare my interests as set out in the register. We
need to ensure that green hydrogen is the predominant form of
hydrogen used in the gas grid and elsewhere. To that end, what
consideration have the Government given to using contracts for
difference to drive down costs and encourage innovation in the
production of green hydrogen, as we did so successfully for
offshore wind during the coalition Government?
(Con)
I understand that the noble Lord is very keen on green hydrogen
and I agree with him on these points, but we are committed to
consult on the preferred hydrogen business model in quarter 2 of
2021 to finalise a decision next year. Alongside this we will
bring forward further details in 2021 on the revenue mechanisms
that will be available to support these proposed business models.
(Con)
[V]
My Lords, planning for the phasing out of all use of gas boilers
is, to my mind, a very bold step, especially when the nature of
the possible replacements is unclear. What steps are the
Government taking to ensure that the energy and construction
industries will have the capacity to cope with this change? For
example, I understand that there is currently capacity to install
only 30,000 heat pumps a year, whereas the need is estimated to
be more than 600,000.
(Con)
My noble friend makes some very good points, but the forthcoming
heat and building strategy will set out the direction of travel
for decarbonising heat. We are working closely with the industry
to create the jobs needed to meet net zero. We recently carried
out research. There will be enough skilled heat pump installers
to deliver our ambitions. We recently published that supply chain
research, which shows that heat pump manufacturers are able to
meet a significant ramp up in demand.
(CB) [V]
My Lords, some 1.75 million boilers are installed every year. I
understand that the cost of the hardware alone, using an average
price, is in excess of £3 billion annually. Most manufacturers
are based abroad and the profits are being sucked out of the UK
economy, principally into euros. We must expect these numbers to
increase dramatically as fossil fuels are abandoned. Will the
Minister please explain what the Government are doing to
recapture more of this huge business by encouraging British
technologies and British businesses to reclaim this important and
growing sector of our economy?
(Con)
The noble Lord is right. We have a number of incentive schemes. I
referred to the ECO scheme and the green homes grant scheme. We
want to be one of the world leaders in this field and we are
working with manufacturers to advance the technology to bring it
down to affordable levels to enable its wide- spread use in the
UK.
(Lab)
[V]
The recent energy White Paper stated that
“we will assess the case for encouraging, or requiring, new gas
boilers to be readily convertible to hydrogen”.
Having recently experienced on 30 December the seizing up of a
system boiler, I would like to know what assessment is needed for
the Government to require hydrogen-ready boilers to be quoted
alongside the conventional, and for the price premium for
hydrogen-ready to be reduced progressively towards a conventional
price if the consumer or bill payer is unaware of the requirement
for all new boilers to be hydrogen-ready by 2025. Is this in the
heat and building strategy that the Government are still
preparing to publish?
(Con)
We are supporting the development of prototype hydrogen-ready
boilers that are not available at the moment through the Hy4Heat
programme, which is due to conclude this year. Subject to its
findings we plan to consult later this year to seek views from
stakeholders on the role that hydrogen-ready appliances will play
in the transition to net zero.
(LD) [V]
My Lords, the Minister referred to ground source heat pumps. How
realistic are they as a green energy solution in terms of
construction and cost?
(Con)
They are one option. Air source heat pumps are another option and
hydrogen a third. Domestic retrofit of community energy systems
will also play a role. We will need to use a number of different
technologies, but ground source heat pumps are certainly one
possible technology.
(CB) [V]
My Lords, it is clear that retrofitting all UK homes with
low-carbon heating is a long way off. Very many households will
depend on heating by electricity, which is at present much more
expensive than its fossil fuel alternatives. Will the Minister
confirm that the Treasury’s net zero review is looking at
rebalancing the cost of electricity to make it more affordable,
not least for those otherwise facing deep fuel poverty?
(Con)
The Treasury’s net zero review, to which the noble Lord referred,
is considering how the transition to net zero will be funded.
Alongside this we are publishing a call for evidence by April to
begin a strategic dialogue between government, consumers and
industry on affordability and fairness. We have also expanded
government support schemes, which I referred to earlier, to those
on low incomes, who are likely to benefit from them or to be at
risk of fuel poverty. We will respond to our consultation on fuel
poverty in due course.
