It still feels a bit unnatural given how typically, in previous years, the heating industry has had very little expectation for fast, dramatic change. However, once again, the government has signalled its intention to shake up how things are done.
The new Powering Up Britain report is the latest document setting out the government’s energy security and net-zero objectives. What was mentioned was along the lines of what most pundits would have expected, but there were a couple of interesting announcements and comments that are worth examining in greater detail.
The first is the extension of the flagship Boiler Upgrade Scheme (BUS) until 2028 – that’s three years more than before. If the BUS is to be considered a success, I think many would agree that it was in need of extension.
There’s been no indication that we will be installing heat pumps in enough numbers by 2025 without the carrot of a government subsidy, so an extension until 2028 will help towards ensuring that heat pump installations don’t fall off a cliff once the subsidies dry up, providing assurances for the industry as a whole, and especially for installers looking to train in this area, who might be worried about a lacking future pipeline of work.
The Powering Up Britain report also specifically mentions the government’s aim to make it as cheap to buy and run a heat pump as a gas boiler. The extended BUS will help achieve this, it says, but interestingly the report also signals an intention to rebalance the costs of electricity and gas.
Daily pricing in Britain’s wholesale electricity market is always set by the most expensive generating plant – usually a fossil fuel-fired one. According to academics at University College London, even though gas-fired power plants account for just under 40% of Britain’s electricity supply, they set the power price more than 80% of the time; surely a clue that the current system isn’t working.
If electricity costs are uncoupled from gas, there’s a real opportunity for heat pumps to break free of the fossil fuels that are arguably holding them back.
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