Written evidence submitted by EDF Energy (DHH0144)


EDF is the UK’s biggest generator of zero carbon electricity and is the market leader in provision of energy efficiency measures through the Energy Company Obligation (ECO).

EDF is committed to helping Britain achieve net zero, including tackling the urgent issue of how we heat our homes - the electrification of heat provides the most immediate solution. Read our report on our contribution to a Green Recovery here.


         Home heating is responsible for a large part of UK emissions (c14%, or 67Mt of carbon per annum in 2018) so decarbonising it should be a priority as the UK moves towards Net Zero.

         EDF is the market leader in ECO in the last year alone, we installed more than 46,000 energy efficiency

solutions into UK homes.

          Since 2018, the ECO measures EDF have installed have delivered £830 million in lifetime bill savings for our customers which saves 260,548 tonnes of carbon entering our atmosphere each year.


         Combined with energy efficiency, electrification of heat through heat pumps can play the major role in decarbonising heat. EDF strongly welcomes the ambition shown by the Prime Minister’s recent

Ten Point Plan for a Green Industrial Revolution, especially in the new 600,000 per year target for heat pumps by 2028:

o        As an established low carbon heat technology that is widely deployed across Europe, heat

pumps can immediately reduce heating emissions and should form a major part of any

upcoming Heat and Building Strategy.

o        As set out in the Energy White Paper, growing the installation of heat pumps can also support up to 20,000 high quality, low carbon jobs by 2030.


         With the right incentives and regulatory framework to create customer demand for low-carbon heat, energy suppliers can play a leading role in this process, building on existing customer relationships to provide new smart low carbon heating solutions and services.


         To deliver on this ambitious new target for heat pumps, Government must focus on the creation

of incentives and the regulatory framework for roll-out drawing on elements of the successful electric vehicle model. This means:

o        Providing customers with help to meet the higher up-front costs of heat pumps. This

should be in the form of a grant, modelled closely on the simple customer friendly process used successfully for electric vehicles over the past decade. Tax incentives such as VAT reduction or variable stamp duty should also be considered, just as government has reduced vehicle excise duty

for EV purchases.

o        Enabling customers to realise annual savings from a more efficient heat pump. This

requires addressing current distortions in the charging of policy costs between electricity and gas, including through placing a carbon price on the consumption of gas and other fossil fuels (oil, LPG), and through moving Energy Company Obligation costs to gas bills.

o        Developing a regulatory framework to phase out fossil fuel heating, firstly in new homes, then in the off-gas grid (2020’s), then in the mass of on-gas network homes (2030’s onwards)

o        Tackling the wider barriers to decarbonising heat through improving the energy efficiency of homes, developing the skills base for heat pumps/low carbon heating and stronger public communication of the need for change and options available.



         There must be the right balance of policy costs between low carbon electricity and fossil fuels, such as gas. Today, around 23% (22.92%) of a customer’s electricity bill covers levies that are designed to

accelerate and support our shift to net zero, whilst gas bills bear just 2% (1.86%) of the cost.

o        We would like to see policy costs aligned more closely with the “polluter pays” principle,

which implies a different allocation of policy costs and taxes between electricity and gas

o        Alongside incentives, regulation (including building standards, barriers to direct replacement of fossil boilers and reformed EPC ratings) should play an important role in gradually phasing out fossil fuel heating.

o        Vulnerable consumers should be prioritised in this transition and protected through any changes to the way policy costs are allocated.


         Other technologies will also play a role in heat decarbonisation, but the scale of that role is today uncertain or suited in specific circumstances only, for example:

o        Low-carbon district heating is an option for densely built new build areas and where a heat network already exists

o        Low-carbon hydrogen is likely to play a role alongside electrification and may be of particular value as a source of peak heat and as a heating fuel for a range of industrial processes. However further work is needed over the coming decade to answer questions about the technology and this work will inform the scale and nature of the role that hydrogen can play in home heating.


         The rollout of low carbon heating solutions will only reduce home heating emissions so far and we must continue to make progress in increasing the energy efficiency of the UK’s housing stock.

o        The ECO scheme has been useful in improving energy efficiency in fuel poor homes and

could be expanded to include the ‘able to pay’ market. Previous obligations that have included

an able to pay element resulted in successful delivery of energy efficiency measures to many households who otherwise may not have engaged e.g. Carbon Emissions Reduction Obligation

(CERO) in earlier ECO iterations, and the Carbon Emissions Reduction Target (CERT).

o        Expanding ECO to include those who are able to pay will also develop supply chains and enable

further delivery of energy efficiency to fuel poor households. Solely targeting fuel poor households makes finding eligible customers inefficient, expensive and can result in homes being overlooked.

o        Future schemes should also ensure that all suppliers are obligated, with no minimal threshold, so that every supplier can support improving energy efficiency and household carbon emission reductions.


         Smart meters will also form part of the modernisation of the nation’s energy infrastructure and when linked with heat pumps and electric storage heating, can enable more grid flexibility and the ability to warm homes with electricity that is less costly and carbon intensive.


April 2021