Public First has published a report looking at Energy Bill reform.
The report looks at how well the UK compares to other countries when it comes to policy, uptake and incentives of decarbonised heating and heat pumps. In particular, it highlights the policies that mean renewable heat is not incentivised in the same way as renewable electricity.
Decarbonising and electrifying residential heat is crucial if the UK is to achieve its Net Zero targets. At present, however, many policy costs – such as Feed-In Tariffs, Renewable Obligation Certificates and Contracts for Difference – are imposed on electricity bills but not on gas, penalising those who do invest in cleaner options. Unless policy changes, UK households that opt for an air source heat pump will be paying £305 more a year in 2030 in energy bills than those with a gas boiler.
In this new report for 5 major energy companies, Public First presents:
- Analysis of how well the UK compares to other countries on uptake, policy and incentives for decarbonised heating and heat pumps
- New modelling looking at the incentive, distributional and fiscal implications of different options for how we might shift where policy costs are charged.
The report states that the “UK lags behind its international comparators on decarbonised heating, heat pump purchases and trajectory”.
For example:
- Germany has 2.6 times the number of heat pump sales per capita as the UK. Germany has higher renewable policy costs on electricity than the UK, but has recently introduced a carbon charge on gas which will reach £55/tCO2e by 2025. Their stimulus package last year included reductions on the electricity renewable levy.
- France has ten times the number of sales per capita as the UK. It has lower renewable policy costs on electricity than the UK, and also levies an additional carbon charge across fossil fuels, including gas.
- The Netherlands has 4.7 times the sales per capita as the UK. It has placed considerable policy costs on gas: it has the highest costs on gas, once taxes are added, in the EU.
You can read the full report here.
