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CBI recommendations to remove gas central heating from millions of households would fail consumers

Gas Users Organisation, the consumer group representing domestic gas customers, says that CBI recommendations to remove gas central heating from millions of households is like Marie Antoinette telling bakeries to only bake cake





In a recent report from CBI and the University of Birmingham, the bosses club recommends that 20000 households per week should be disconnected from the gas grid, and that gas boilers should be phased out. They recommend a huge expansion of heat pumps, and connections to heating networks.


The CBI acknowledges that most households have no awareness that a revolution of domestic heating is being planned.


Andrew Newman, Technical Director of the Gas Users Organisation, explained:


“Most UK consumers are very happy with their current gas central heating, which is clean, convenient, and reasonably cheap. We all know that more needs to be done to bring home heating to net zero, but the interests of customers need to be considered, and the CBI fails to do that.


“There are strong options to keep the existing gas networks, and source the gas within it from renewable sources, this can be biomethane, similar to the natural gas we already use, but made from renewable sources, and also hydrogen.


"These options are quite exciting because biomethane made from municipal waste would actually be carbon negative, and hydrogen can be made from renewable electricity and then stored until it is needed much more easily than electricity can be stored.


Most UK consumers are very happy with their current gas central heating, which is clean, convenient, and reasonably cheap. We all know that more needs to be done to bring home heating to net zero, but the interests of customers need to be considered, and the CBI fails to do that.

“The CBI’s plan prefers heat pumps, and heat networks. Most UK consumers are not really aware of heat pumps yet, this is a relatively efficient form of electric heating, but most customers would find them more expensive to run than gas.


"To work effectively, older homes would need an expensive and disruptive refit, with new larger radiators, or underfloor heating. Heat pumps are much more expensive to fit than gas boilers, around £9000 for an air sourced heat pump, and around twice that for a ground source heat pump.


"A report from Element Energy for the government on heat pumps concluded that in all scenarios considered, heat pumps had higher life- time costs for consumers than gas heating. The CBI report is also rather vague about where the huge expansion of electricity generation and transmission capacity would come from to power all these heat pumps, but we can be pretty sure it will be the consumer who will pay!


“Heat Networks work by connecting homes to a central source of heat, rather than having their own heating system. They are more common in Europe than in the UK, and once on a heat network, customers have no choice to disconnect. Reports from the CMA, the consumer group Which? And Citizens Advice have all reported lower satisfaction levels for customers on heat networks, and sometimes much higher charges. Most heat network customers in the UK are in social housing, and have effectively been conscripted onto them.


“Some of the CBI’s recommendations on heat are sensible, but there is a clear authoritarian streak in their approach, where they are prepared to shift the cost of reducing carbon emissions onto ordinary families, which will increase fuel poverty and inequality.”

NOTES FOR EDITORS


The Gas Users Organisation C.I.C. is a recently formed community interest company established to operate for the benefit of the 24 million households who use domestic gas, and for individual engineers registered with Gas Safe.

https://www.gas-users.org/

Contact: Andrew Newman CEng MIET, Technical Director, on 0754 0859 227

Or email Andrew.newman@gas-users.org CBI report, https://www.cbi.org.uk/articles/net-zero-the-road-to-low-carbon-heat/, published 22/07/2020

The CBI report recommends:

“Government should mandate that after 2025 all new boiler installations must be part of a hybrid system or be ‘hydrogen-ready’. By 2035 no new natural gas boilers should be installed and only air source or ground source heat pump or hydrogen powered boilers should be installed, including heat network connections.”

See Energy Networks Association plans on decarbonising the gas network by 2050:

The benefits of a Balanced Transition approach are that it achieves a 90% carbon reduction from today to 2050 and it:

  • Avoids moving an additional 12 million homes completely away from gas– where the highest customer costs are imposed.

  • Allows more choice, and via high uptake of hybrid heat pumps, additional peak generation demand only grows to 24GW rather than the 48GW under E&HN.

  • Avoids decommissioning the entire residential gas network (total cost of £4bn).

  • Could reduce the additional investment in electricity distribution networks (capex & opex, discounted, over 2012–2050) by £8bn (or more if smart solutions are not rolled out).

  • Avoids pushing heat networks out as far into suburbia – 3 million fewer homes are required to switch to district heating.

https://www.energynetworks.org/gas/futures/overview.html

Report on the performance of heat pumps for BEIS, “Hybrid heat pumps study”, Element Energy, for Department for Business, Energy & Industrial Strategy https://www.gov.uk/government/publications/hybrid-heat-pumps-study (April 2018)

The report by Element Energy for BEIS evaluates the upfront costs of Hybrid heat pump (HP), HP and gas boiler heating systems for a typical semidetached house.

Their report shows (in 2016 prices):)

i) a conventional gas boiler as typically costing £1570

ii) a stand alone HP costing £8975

iii) a HHP with high T emitters between £6170 and £6725

iv) a HHP with low T emitters costing £8525

See previous Gas Users statement on heat pumps: https://www.gas-users.org/post/new-heat-pump-charter-is-welcome

The government has been encouraging the roll out of heat pumps through a subsidy called the Renewable Heat Initiative (RHI), and by January 2020, a whopping £141.9 million in subsidies has been paid under the Domestic Renewable Heat Initiative (RHI) scheme towards 5812 ground source heat pumps. An average subsidy of £24,415 per installation, with further subsidies towards air sourced heat pumps.

See previous Gas Users statement on heat networks: https://www.gas-users.org/post/consumer-interests-must-be-protected-while-growing-the-heat-network-sector

We are concerned that many heat network customers currently experience poor service, and that a significant minority are charged high prices. As heat networks decarbonise they are likely to become more expensive for their customers, and given that a high proportion of heat network customers are vulnerable or in financially precarious circumstances, then this could contribute to fuel poverty and inequality.

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