Written evidence submitted by Karl Drage (DHH0110)

Summary

Ground Source Heat Pumps are the lowest carbon, lowest whole life cost and best value for money technical solution to providing heat for buildings.  They also provide cooling out of the same package, also low carbon, and ever more important with climate change.  The different types of heat pumps – Air Source and Ground Source – are quite different, and they must be considered so, if the Government is going to achieve its net zero aims.

It is directly possible to accomplish the required change – to achieve zero carbon - in the heating of buildings through the large-scale installation of ground source heat pumps.  This is technically, practically, and economically possible - now.  Ground Source Heat Pumps are Zero Carbon ready:  As electricity is decarbonised, GSHPs go from lowest carbon heat (and cooling) to zero carbon heat (and cooling) without any modification.  The single biggest challenge preventing the move to low and zero carbon is the regulatory framework that is currently skewed toward the incumbent, high carbon emission technology and the resistance to change and inertia that it provides to its associated stakeholders.

Introduction

Karl Drage is a Fellow of the Institution of Mechanical Engineers, a past chairman of the Ground Source Heat Pump Association and is currently the Director of Business Development for The Kensa Group, the leading manufacturer and installer of Ground Source Heat Pumps in the UK.  He has been leading heat pump installation businesses for two decades, as Operations and Managing Director of GI Energy, a leading commercial installer of Ground Source Heat Pumps, and as CEO of Smart Renewable Heat, a ground source and air source heat pump installation business.  He has been involved with thousands of Heat Pump installations in the UK, as well as leading heat pump installation businesses in Europe and the US.  The views expressed here are his own, although expected to be largely aligned with those of the Ground Source Heat Pump industry.

1. What has been the impact of past and current policies for low carbon heat, and what lessons can be learnt, including examples from devolved administrations and international comparators?

The engineering science is very clear.  The decarbonisation of heat comes from providing heat through heat pumps powered by zero carbon electricity.  We are well on our way to achieving zero carbon electricity.   The path to the provision of low and zero carbon electrified heat has, however, been consistently thwarted by poorly implemented, ill-conceived or financially imbalanced legislative policy incentives.

By far the most successful policy in beating a path to zero carbon heating was the immensely successful “Merton Rule” – a 2003 planning policy implemented by Merton Council, later adopted as PPS22 across the UK – forcing architects, developers and engineers to design and adopt more energy efficient buildings.  A stark reminder that carbon emissions reduction in the built environment sits with DCLG as much as with BEIS intentions for national energy strategy and infrastructure.  On a similar note the Green Buildings Council in the US, with their highly regarded LEED building status, has had a similarly positive effect on the uptake of Ground Source Heat Pumps.

We then come to UK policy and consider the Clear Skies Scheme, the Renewable Heat Premium Payment, the Non-Domestic Renewable Heat Incentive, and the Domestic Renewable Heat Incentive scheme.  All which consistently failed to achieve their intended goals with an increasing level of detrimentality to the dissemination of low Carbon Heating technologies.  These increasingly flawed policies have caused a decade of systemic harm to the fledgling renewable heat industry, in favour of higher carbon technologies, or (opportunity) costly short term supply chain distractions.

2. What key policies, priorities and timelines should be included in the Government’s forthcoming ‘Buildings and Heat Strategy’ to ensure that the UK is on track to deliver Net Zero? What are the most urgent decisions and actions that need to be taken over the course of this Parliament (by 2024)?

Heat Pumps and the electrification of heat must be prioritised.  The only way that we can have zero carbon heat is through heat pumps.  Heat pumps have been demonstrated to be practically and economically viable for more than two decades, so there is no technological issue with this policy direction.

The Government should drop the extremely costly (and truly non-sensical) fantasy of seeking to make technological break-throughs in re-engineering the existing gas grid to a “possible” hydrogen future.  Everyone loves a “moon shot” but we should clearly recognise quixotism.  The very important facts to note are:

-          Hydrogen is critical for the decarbonisation of a few high heat sector industries.  This will lead to Hydrogen being expensive and exclusive.

-          Hydrogen is not a "Natural Fuel" like "Natural Gas".  It is Made not Mined. It is therefore better thought of as an Energy Storage and Transportation Medium, with conversion losses at each stage.

-          Since it's molecules are smaller than most gases, it causes damage to steel pipes at a molecular level - a process known as Hydrogen Embrittlement of Steel - which leads to explosions in pressurised gas.

-          It also "leaks" through polyethylene pipe. It, therefore, is not compatible with the existing gas mains.

-          Hydrogen is far more explosive than natural gas. The Hindenburg was a pertinent example of what can happen when Hydrogen meets ignition. - To get to a "domestic heating" solution is folly, as a solution is currently not economic and not practicable.

In short: Yes, let’s make green hydrogen; yes, let’s perfect techniques for carbon capture and storage, or extremely high energy use electrolysis; yes, let’s overcome all of the vast array of engineering problems associated with the management of hydrogen; yes, let’s replace all of the industrial high heat steel and cement making processes with greener hydrogen fuelled technologies.

BUT, NO!  Let’s stop wasted time considering the use if this precious resource as a precarious stop gap technology between 2030 and 2045 just because we happen to currently enjoy pumping flammable gasses into domestic homes.

The vaccine to the renewable heat problem already exists – shared ground loops, ground source heat pumps and 5th generation district heating – is the answer, and the only “moon shot” challenge, is a far simpler one, of how do we legislate to get this very real, very practical, very cost effective solution to be installed through the systematic replacement of the existing ground based gas main.

Fundamentally, the Government should legislate to ensure that the lowest carbon solutions are always considered and that lower carbon is incentivised through either planning policy or local taxation and that future proofing achievement of Net Zero should be demonstrated.  Heating systems should be Zero Emission NOX and SOX, maintaining clean air.  Consideration of whole life cost should be forced – such that the market can clearly decide using the fundamentals of the market economy – i.e. Legislate Low Carbon, let the market fight out low cost and better service.  The Government should protect the fuel poor, the vulnerable and the consumer, with subsidy schemes that bridge the gap and enable a soft transition to low carbon technologies.

3. Which technologies are the most viable to deliver the decarbonisation of heating, and what would be the most appropriate mix of technologies across the UK?

Shared Ground Loops with distributed Ground Source Heat Pumps are the lowest whole life cost and lowest carbon heating technology available to the built environment.  They do not require innovation support – to that effect they are already past TRL9 – and there are many operational scale demonstrators working completely “normally”.  The only challenging – albeit a grand one – is to get the policy right to ensure their delivery on a massive scale.

Shared Ground Loops are also known as ambient loops or 5th Generation District Heating.

Rather than every building being connected by underground pipe containing pressurised flammable gas (which when thought of abstractly, is actually crazy); a 5th Generation District Heating Systems connects every building with a local network of buried pipe containing treated water – as a heat transfer medium.  This water is then used as a heat source, or heat sink to provide the very lowest cost and carbon Heating and Cooling (Air Conditioning) to each building.

(Note Ground Source Heat Pumps and Water Source Heat Pumps are the same technology.  Air Source Heat Pumps are very different.)

4. What are the barriers to scaling up low carbon heating technologies? What is needed to overcome these barriers?

The price of gas versus the price of electricity is the current number one barrier.  A price difference artificially loaded with regulatory influence.  This balance could be corrected, and the heat pump industry would be mobilised overnight, with the wind of private capital in its mainsail.

The biggest barriers are the vested interests of the high carbon fuels stake holders, and the inertia – simple resistance to change – in the commercial systems and supply chains of the heating industry.  The industry requires systemic change – led by utility / energy provider and heating equipment suppliers - and new actors, service providers or low carbon heating coordination agencies to underpin and oversee the installation standards and skills transition of domestic installer contractors.

Each step of the value chain should be re-centred:

Gas boiler manufacturers need to change or be replaced by Heat Pump Suppliers

Merchants and Suppliers need to shift to Heat Pumps

Plumbers and Heating Engineers need to fit Heat Pumps instead of boilers

Engineering Consultants need to design heat pump systems

House Builders / Developers need to install Shared Ground Loops instead of Gas Mains

DNOs need to size grid capacity for heat pumps, and replace Gas Mains with Heat Networks

Energy Companies need to shift business models to affordable LZC Heating instead of Gas.

The SAP assessment mechanism in buildings needs to be corrected to correctly assess net zero.  If this simply took into account what the carbon factor of the grid will be in 5, 10 and 15 years time (this is already planned) then the right technologies will be installed.  Both the EPC and SAP mechanism is not a true assessment of Net Zero, and this should be corrected.

5. How can the costs of decarbonising heat be distributed fairly across consumers, taxpayers, business and government, taking account of the fuel poor and communities affected by the transition? What is the impact of the existing distribution of environmental levies across electricity, gas and fuel bills on drivers for switching to low carbon heating, and should this distribution be reviewed?

Private finance and the use of funding mechanisms can enable the fair distribution of the costs of decarbonising heat across consumers, business and government.

Ground Source Heat Pumps are lower cost than any other heating system.  Over the reasonable life of a building, the whole life cost of an electrically driven ground source heat pump system is more than 10% lower cost than the whole life cost of a gas boiler system.  That would be on today’s prices of 4p for a unit of gas, and 14p for a unit of electricity.  Fuel costs that are inappropriately weighted.  However, this is not the full picture.  Ground Source Heat Pump systems represent much better value, as the installation, the ground asset, lasts considerably longer.

Worked example for a 6kW heating system – including installation and maintenance:

6. What incentives and regulatory measures should be employed to encourage and ensure households take up low carbon heat, and how will these need to vary for different household types?

A Carbon Tax penalising the use of energy from sources high in carbon emissions.

Control of point of use emissions, with air quality regulations banning the use of NOX and SOX emitting boilers.

Educating Consumers on “Value for Money.”  True value for money, not “lowest cost install.” Driving awareness of the Whole Life Cost and funding the ground side utility element of the technology.

Penalising companies that continue to invest in high carbon emission fuel assets – such as gas mains.

The government should legislate to encourage the housing market to value zero carbon homes.  One way to do this may be to eliminate stamp duty on true Net Zero Houses.

The biggest incentive should be the whole life value for money, and long-term savings enjoyed by Ground Source Heat Pump systems owners.

7. What action is required to ensure that households are engaged, informed, supported and protected during the transition to low carbon heat, including measures to minimise disruption in homes and to maintain consumer choice?

Energy companies are well equipped to engage with the public.  Every home and business is engaged with a conversation with their energy supplier on at least a monthly basis, and energy companies enjoy the privilege of serving businesses and consumers with their heating and power needs.  The government should mobilise this channel.  Through mechanisms such as ECO – which should be re-thought – the government should ensure that energy companies, and challenger brands, spearhead the move to low carbon heating, in conjunction with volume housebuilders and developers.

8. Where should responsibility lie for the governance, coordination and delivery of low carbon heating? What will these organisations need in order to deliver such responsibilities?

The Government should use legislation to force the Zero Carbon aspect of the equation – it is technically possible, and it is technically possible in an affordable manner.  The Government should stop trying to force the matter around cost.  The market can do that.  Simply legislate that zero carbon solutions must be installed.

Until legislation is used to force zero carbon, then renewable, low and zero carbon sources will continue to operate in an uneven battleground, where the government continues to allow advantage to high carbon emission technologies.

The Industry will take care of Quality and Standards, the Government needs to stop meddling in schemes like MCS, which have made it much more costly, with a very significant administrative burden, to be an installer of renewable heat technologies.  The barrier to enter renewable heat for “normal” plumbers is significant, maintaining the prevalence of high carbon fossil fuel devices.

December 2020