Heat pump plan would cost £300bn, says Policy Exchange

Plans proposed by the previous Government to decarbonise heating by fitting electric heat pumps in most homes by 2050 would cost about £300bn, claims a new report from the Policy Exchange.

The paper, which takes into account the installation cost of more than £8,500 per heat pump, the cost of upgrading the grid, and the additional 100GW of power generation capacity that would be required to meet the demand for electricity, reveals that it would cost as much as £12,000 per household to deliver the coalition’s plans to reduce carbon emissions from domestic heating.

The analysis argues that the newly created Department for Business, Energy and Industrial Strategy (DBEIS) needs to “completely re-think its approach and look at alternatives,” with the research organisation also highlighting that the government could still meet its target of reducing carbon emissions from domestic heating by 80 per cent through a range of measures.

The UK-based think tank suggest that improving energy efficiency by tightening standards for new build homes and for existing private rented properties, linking the stamp duty system to energy performance to encourage households to improve their properties and making better use of gas by encouraging people to replace old boilers with new highly efficient boilers could all contribute to the government’s carbon reduction goal.

The report also proposes expanding the use of “greener gases” such as injecting biomethane into the gas grid, which can be made from food waste, along with supporting the development of new technologies which convert “black bag” residual waste into synthetic biogas and exploring the possibility of converting the gas to the grid to run on hydrogen.

The paper warns that the UK is significantly off track to meeting legally binding carbon budgets covering the period to 2032, and the lack of progress to decarbonise heating could make or break the UK’s carbon plans. It also urges the government to put affordability at the heart of its decarbonisation strategy by shifting away from its focus on electric heat pumps to alternatives.

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