CHALLENGE TO OFGEM

The energy regulator, Ofgem, has been challenged by a leading energy trade body to examine the real-world consequence of shifting homes from gas onto heat pumps.

The CEO of Energy and Utilities Alliance (EUA), Mike Foster, has written to the regulator Jonathan Brearley, calling for a village-sized trial of decarbonising homes using heat pumps.

The trial will mirror that currently being considered for homes to be converted to hydrogen, another option being considered to decarbonise the UK.

Mr Foster said:

“A Heat Pump Village trial will replicate what will happen all across the UK if the government decides that hydrogen will not replace natural gas. Such a trial, conducted now, will help inform the regulator and government of the consequences for the consumer.”

“Electricity networks will need massive upgrades to the wires, the substations and even the pylons. Homes need assessing for their suitability for a heat pump. That means looking at the fabric of the building itself, its outside space, its internal pipework or even where to put a hot water tank. A Heat Pump Village trial does just this.”

“Ofgem should have the consumer at the very heart of its thinking. Reinforcement of the power network will come at a massive cost; the consumer will foot the bill so they have a right to know what this is likely to be. They should also be told what is required from them in their homes.”

“Alongside Hydrogen Village trials, a Heat Pump Village trial will provide the much-needed evidence for policymakers as they tackle the challenge of decarbonising UK homes. The cost of a trial will be miniscule compared to getting this wrong. I urge Ofgem to step up to the plate and take a lead.”

FULL LETTER TO OFGEM

26^th October 2022

Jonathan Brearley CEO Ofgem

Dear Jonathan

Heat Pump Village trials

As you know, the Gas Distribution Networks are currently working on Hydrogen Village tri­als, to assess how a transition from natural gas to 100 per cent hydrogen would work. This involves detailed house-to-house examination of gas appliances; consideration of what network changes are needed and how the consumer reacts to this possible route to do­mestic decarbonisation. It will be an invaluable learning exercise, which frankly should be done at more than one site to ensure the widest reach of data.

But I am conscious that no such exercise is being conducted for alternative technologies, such as heat pumps. The BEIS funded Low Carbon heat trial is fundamentally a different proposition and cannot be compared to the Hydrogen Village trials. Under the BEIS scheme, households have self-selected to receive heat pumps from wide geographical ar­eas, meaning that any impact upon the electricity network is diluted and will not reflect the real world experience that mass adoption of heat pumps brings. A heat pump trial, in a dedicated location, would simulate the real world challenges that power networks will face.

Importantly, such a trial would also give great consumer insight into the challenging area of heat decarbonisation. It would examine not only customer attitudes, but also house-by­house suitability for heat pumps taking into account the building fabric and any heating system changes needed, such as hot water storage or microbore pipe restrictions.

Examining a whole “village” this way will also address the important matter of designing a

process for local gas network decommissioning, if hydrogen does not replace natural gas, whilst protecting consumer interests.

Failure to consider such a trial suggests two things, firstly that Ofgem do not consider heat pumps will replace gas, hydrogen, in the future or they do not want to know what the power network costs and consumer response will be to moving homes off gas.

I look forward to hearing that Ofgem will consider a Heat Pump Village trial.

Yours sincerely,

Mike Foster

CEO – Energy and Utilities Alliance