IGEM response to the Department for Energy Security and Net Zero Select Committee's call for evidence on Heating our Homes

Response from the Institution of Gas Engineers & Managers (IGEM) to the Department for Energy Security and Net Zero Select Committee's call for evidence on Heating our Homes.

Introduction:

Licenced by the Engineering Council, IGEM is the professional engineering institution for gas – representing thousands of engineers, technicians and managers across the UK and overseas, and hundreds of businesses that are a significant part of the emerging hydrogen supply chain.

As advocates of excellence, IGEM’s core aim is to help all those involved with gas to achieve and maintain the highest standards of professional competence. Working with stakeholders from across the industry, we seek to inform current and future energy policy whilst representing the views of our members and the wider gas community.

IGEM fully supports the transition of the energy system to meet a net zero future and are playing a key role in supporting the evidence base for the application of low carbon gases in the gas network. As well as developing the first Hydrogen Technical Standards, IGEM facilitated a change in regulations on the quality of gas allowed to be injected into the transmission and distribution network, to enable a higher proportion of greener gases such as biomethane and hydrogen. 

Our role across various industry and governmental groups sees us working directly with gas network companies, manufacturers, consultants, contractors, safety experts, academia, regulators, policy advisors and policy makers, to assess the evidence base and develop informed recommendations on the future of the gas grid.

We welcome the opportunity to respond to this call for evidence and aim to represent the collective views of IGEM Members and our gas industry stakeholders. We have selected questions from the call for evidence which are of greatest relevance to our members and provided our response below. 
    
1. What policy changes are needed to deliver energy efficient homes across the UK?

Energy efficiency and retrofit initiatives to date have had limited success, due namely to funding shortfalls, the level of disruption for consumers and the lack of education/engagement with the public. Addressing these issues is key to the success of policy in this area.

Policy must be consumer-centric and directly address cost barriers for consumers, particularly low income/vulnerable households, shaped by a clear understanding of consumer behaviour. 
As outlined in their report, Connecting the Watts¹, Policy Connect's key policy recommendations, following a nine-month long enquiry, called for: 

1. Every government department to publicly sign up to apply a ‘Net Zero Test’ to its individual strategies and policies and be held to account.
2. Local government and its partners, who have the reach into local communities and businesses, should be empowered to plan the transition and resourced to make it happen, street by street.
3. The government to establish a network of independent consumer information hubs, which would provide information about net zero, consumer protections and offer tailored advice, ensuring no one is left behind.
4. The net zero delivery authority should work with local authorities and relevant businesses, such as energy suppliers, to deliver a public information campaign about the path to net zero.
5. Policy that supports a whole-systems approach to decarbonising heat; utilising a range of low carbon energy vectors; capitalising on shared network infrastructure and local resources which will support a least-cost energy transition and maintain consumer choice.

2. What are the key factors contributing to the under-delivery of the UK’s government-backed retrofit schemes?

No answer.

3. Which standards and assessment frameworks are needed to deliver a reliable, skilled workforce capable of transitioning UK homes to modern heating solutions?

The labour force currently installing and maintaining domestic boilers is very well placed for retraining on hydrogen-ready and hydrogen appliances, a contrast to the workforce available for other key technology pathways.

The industry has produced a new interim training Specification which covers training for those persons wishing to extend their range to include blends of up to 100% hydrogen. The Specification also covers those persons involved in working on the coordinated neighbourhood and/or village trials for hydrogen. The Specification documents the requirements of the training, including knowledge and understanding and performance criteria that will be undertaken off-site. It also covers the requirements for the minimum time spent on each subject along with the activities that are required to be undertaken.

Work is underway through the government Hydrogen Skills and Standards for Heat programme to establish the technical standards for domestic and non-domestic hydrogen gas installations, and associated competence frameworks and training specifications for installers.

The development of standards and assessments will need to be underpinned by:

• Clarity in government policies and strategies that influence investment in domestic heating technologies. This is needed for industry to make confident investments on which workforce numbers can be predicted and for workforce competencies and skills needs to be fully understood and planned for, in order to avoid skills shortages. 
• Robust, industry-led, flexible and responsive skills systems. Skills systems need to be able to support agile and responsive delivery that does not compromise quality and that can keep pace with technological and regulatory requirements.

A good example of an industry-led responsive approach is SGN’s H100 training facilities, delivered through a local college, which is developing all that's needed for network engineers and installers, that can be replicated for nationwide readiness and delivery.

4. How might the Government support innovation in delivering local solutions?

The gas industry is preparing for the transition from natural gas to hydrogen. We urge the government to continue supporting the safety and use case for hydrogen’s role in the decarbonisation of domestic heat, including blending up to 20% hydrogen into the existing gas system and the hydrogen village trials. The local trials will provide essential learning and foster consumer engagement and acceptance which are crucial steps to enable government to make an informed decision on hydrogen for home heating by 2026. 
Innovation should also consider future needs, beyond first-of-a-kind projects, as demand for hydrogen grows. Development of the initial hydrogen infrastructure to meet the 2035 net zero power system target (flexible electricity generation from hydrogen turbines/engines), as well as industrial demands, should consider the capacity of this infrastructure to connect further demand. This will help future proof the investment to allow for conversion of city/town/villages and meeting domestic demand. 

5. What role should customer choice play in the future planning of energy networks for home heating?

Customer optionality plays a crucial role in the future planning of energy networks for home heating and the success of heat decarbonisation. Recent examples from both the UK and Germany demonstrate the importance of engagement with customers on heating innovation choices, when plans to replace conventional gas boilers with low carbon alternatives resulted in considerable public backlash. In the UK, customers campaigned to stop plans to change their natural gas boiler to a hydrogen boiler and in Germany, consumer backlash, dubbed the ‘heating hammer’, led to hydrogen-ready boilers being installed following opposition to removing traditional gas boilers.

As we transition towards cleaner and more sustainable energy systems, involving customers in the decision-making process can lead to more efficient, equitable and environmentally friendly outcomes.

Different households have different energy needs, preferences, and financial circumstances. Allowing customers to choose from a range of heating technologies, such as hydrogen-ready boilers, electric heat pumps, solar thermal systems etc., empowers them to select solutions that best align with their requirements and financial circumstances and will support customer ‘buy-in’. Some properties present more difficulties and disruption to change heating technology than others, including those which require replacement microbore piping (involving re-plastering, redecoration and re-carpeting), or insulation retrofit prerequisites to installation. Having modern versions of traditional-style gas showrooms with all domestic energy technology would help bring the public on board and educate them on their options. 

This approach can help customers make informed decisions that can reduce energy consumption, lower costs, and decrease carbon emissions. Coupled with enabling customers to choose when and how to heat their homes through demand response programs. 

However, it's important to balance customer choice with system-wide efficiency. The home heating energy transition will depend on factors such as local resources, regional infrastructure, and environmental or economic viability on a larger scale. Therefore, a holistic approach to planning that considers both individual choices and overall impact is essential.

The following policy interventions will help progress the decarbonisation of domestic heating, maintaining flexibility and minimising disruption for households, without the dependence on considerable shifts in customer behaviour:

• Mandating all new boilers are hydrogen-ready from 2026 – this is a no-regrets option for government whilst the future of hydrogen for home heating is being decided.
• Hydrogen blending into the existing gas network – helping reduce near-term emissions and supporting hydrogen market development.
• Increasing biomethane production and blending into the existing gas network.
• Supporting heat networks infrastructure investment.
• Creating the Future Systems Operator (FSO) at pace – with the rapid inclusion of hydrogen within its remit, to optimise existing assets and new infrastructure as part of a whole systems view.

6. Does the current state of consumer protections for low-carbon home technologies represent a barrier to uptake of these products?

The transition to low carbon heat requires changes to the vast majority of homes in the country, and therefore must be supported by strong public engagement and high-quality protections, standards and advice services.

As well as engagement and awareness, households need to be supported during the transition. Government must be confident that consumer protections are adequate for the large numbers of households transitioning to new heating systems; that they cover all low carbon heating options; and that they protect different households in different regions, particularly to avoid one region having a low carbon heat switchover that is comparatively more expensive or disruptive than in other areas. Standards and certification systems for retrofit of low carbon heating also need to be strengthened, aligned and widened to cover all low carbon heat systems. There may need to be greater resource for those who deliver, monitor and enforce protections.

Local advice centres that offer home visits to impartially assess the potential for low carbon heating and energy efficiency will be particularly important for educating and supporting households – As successfully demonstrated in Scotland. However, those who are disengaged and less likely to access advice services will still rely strongly on heating engineers. It is therefore crucial that heating engineers are highly trained to be able to provide good advice to households on options for low carbon heat, and to fit them to a high standard. Developing regionally specific upskilling programmes for heating engineers should be an urgent priority. 

7. How will the public be able to afford the switch to decarbonised heating?

The transition to decarbonised heating must be affordable for consumers. Any upfront costs for customers associated with adopting new heating technologies must be carefully managed with support schemes specifically designed to not disproportionately impact vulnerable and low-income households. Research conducted by Policy Connect outlines a range of principles that support this²:

• Any scheme that is driving uptake of a certain technology should be based on up-front grants, rather than on-going payments: or if the scheme is based on on-going payments, it should have a ring-fenced component to widen access to those who are fuel poor and vulnerable.
• Any scheme should be funded through general taxation where possible, as this most fairly takes into account household’s ability to pay. If it is levied on energy bills, a form of means-testing should be introduced to make household contributions to the scheme correlate to their income.
• Schemes must benefit the fuel poor at least proportionally compared to the general population: and ideally more. There should also be additional support for those in fuel poverty to cover a general increase in energy prices resulting from decarbonisation.
• Schemes should not penalise those who are late to switch, for example by ensuring that charging frameworks for energy networks are fit for expected changes in the future.

In terms of technology installation within homes, air-source heat pump installation costs can vary between £8,750 and £21,550 ³ which is prohibitively expensive for most consumers, even with available government grant support. The Boiler Upgrade Scheme’s (BUS) statistics suggest that the average cost of replacing a boiler with a heat pump is £13,500; following a BUS grant of £5,000, it leaves a £8,500 shortfall for consumers to pay. Conversely, boiler manufacturers have already guaranteed that hydrogen-ready boilers will have cost parity with existing gas boilers and will be effective without considerable retrofit of homes. Mandating hydrogen-ready boilers is a no-regrets option that the Government can implement now to help speed up the energy transition, pending a decision on hydrogen for domestic heating.

8. How will decarbonisation plans be drawn up in each area?

Which heating decarbonisation plan is adopted should be based on a local assessment, looking at factors such as local infrastructure/supply, building type and fabric, carbon savings potential, consumer preferences and costs. Hydrogen, biomethane, heat pumps, hybrid technologies, and to some extent heat networks, all have a role to play in the decarbonisation of heat. A 100% electrification of heat approach is impractical due to the challenges of energy storage, intermittency, peak energy demand, energy demand ramp-rates and the scale of infrastructure required to fulfil needs both locally and nationally. IGEM is calling for a 'whole-system' approach for decarbonising heat – a portfolio with major roles for hydrogen, wind, nuclear, energy efficiency and demand response that are optimised for lowest total system cost and balanced across local, regional and national levels. 

To inform area-specific plans, a careful assessment of the local context should take place:

• Gather data on existing heating systems, energy consumption and emissions.
• Identify the housing stock, including types of buildings, ages and energy performance.
• Evaluate available low-carbon heating technologies that suit the local context and housing stock.
• Consider resource availability, infrastructure requirements and compatibility with existing systems.
• Involve local governments, community organisations, housing associations, energy providers and residents in the planning process.
• Hold workshops, public consultations, and surveys to understand local needs and concerns.

These local factors should also be considered through a national lens, ensuring that a phased, area-by-area approach is adopted to minimise strains on appliance supply, materials, labour and network capacity. Local desire to invest in some technologies may be appropriate for a least cost system, whereas some solutions may be better invested in elsewhere.

With regards to the opportunities that hydrogen presents to local planning, the development of hydrogen clusters across the UK is a central part of the UK Government’s Hydrogen Strategy and present an opportunity to maximise the use of the infrastructure being built and the hydrogen supply, to support the widest possible remit across industrial, flexible power generation and domestic uses.

It is often not recognised that gas distribution pipes serve a range of demands through a shared network. Distributed industry outside of clusters, flexible power generation and homes are all located together in cities, towns and villages. As such, the government must avoid a siloed decision on hydrogen use in home heating. There are other local demands that are dependent on hydrogen which balance local electricity supply and provide local employment for people in the area. It truly is a whole system, economy-wide matter, rather than a sector by sector consideration. 

Spatial analysis conducted by Element Energy, on behalf of Cadent, identifies six major industrial areas of the UK that are also well located for large-scale hydrogen production. Although these regions cover just 7% of the UK by area, crucially, they represent 39% of HGV registrations and 42% of demand for domestic natural gas (2019). This demonstrates the considerable potential to scale up production and use of hydrogen in these regions, and the opportunity to maximise supply efficiencies across industrial and domestic end uses⁴.  

The FSO will need to be engaged with the planning and delivery at a local level to ensure a least-cost balance of transformation, from national infrastructure through to changes within our homes. Uncoordinated investment across the energy system risks asset underutilisation which would add unnecessary cost to customer bills.

Significant progress is needed in improving the energy efficiency of buildings, however over-retrofitting may turn out to be more expensive than using more net zero energy. The investment balance needs to be struck in a cost-optimised way across buildings, electricity and gas networks, energy storage, generation, production and interconnection. 

9. Do the current EPC frameworks help consumers make informed decisions on transition?

No answer

10. Do standards need to differ for different types of housing?

It is important to recognise that different types of housing stock will require different low-carbon technologies and solutions, and therefore, potentially different standards. No single low-carbon home heating technology will suit all housing and therefore a tailored approach should be adopted. 

Standards should take into account concerns over the effectiveness of certain low-carbon heating technologies for specific types of housing stock and some non-domestic buildings. The challenge of retrofitting old housing stock with low-carbon heating technologies is often overlooked, with reports stating that heat pump-only systems could be unsuitable for up to 54% of the existing UK housing stock⁵  - this equates to 8-12 million homes. 

We urge the government to build on this research and conduct a detailed assessment of the UK housing stock, looking at factors such as building fabric, feasibility of insulation measures, internal space for hot water cylinders or other heat storage assets, suitability of existing pipework and radiators, and other potential internal system change requirements. As part of a whole systems approach, the results of this research can be used in conjunction with local assessments of grid infrastructure, resources, industrial clusters etc. to coordinate the optimum heating solutions for each property/locality. 

Not accommodating these factors in the home heating transition could result in considerable disruption and ineffective heating for many consumers, higher energy bills, additional strain on electricity infrastructure and a delay in decarbonising homes. 

11. What is the role of different levels of government in developing, funding and implementing schemes?

No answer

<sup><sub>1. Connecting the Watts: The Case for a Net Zero Delivery Authority, Policy Connect, December 2021
2. Uncomfortable Home Truths: Future Gas Series Part 3, Policy Connect, October 2019
3. The Cost of Installing Heating Measures in Domestic Properties, Delta-ee, July 2018
4. The Future Role of Gas in Transport, Green Gas Transport Pathway, Cadent, 2021
5. Decarbonising Heat in Buildings: Putting Consumers First, Energy & Utilities Alliance, April 2021</sub></sup>