CCC must explain its low estimates of heating conversion costs

Climate change committee must explain why £10,000 costs per household are much cheaper than the £21,550/£27,300 costs for heat pumps in September Government report.

The sums just don’t add up in CCC recommendations on home heating costs.

The 6th Carbon Budget report released by the Committee on Climate Change (CCC) on 9th December calls for gas boilers to be banned in domestic properties from 2033, and claims that the average additional installation cost per household for a new heating system would be less than £10000, and that 63% of homes would need spend no more than £1000 on retrofitting energy efficiency measures. However, government figures contradict these claims.

The CCC is recommending moving to electric powered heat pumps. There are two types of heat pump, a fully electric one, or a hybrid heat pump that includes a gas boiler. Hybrid heat pumps allow the existing radiators to be kept, but moving to a fully electric heat pump requires expensive modification, either new underfloor heating, or new, larger radiators. With a fully electric heat pump, it would also be necessary to fit a new water tank.

The challenge in using hybrid heat pumps is that it would require the gas network to be retained, which is a good thing, but that the much lower volumes of gas used would undermine the economic viability of the gas businesses. At some points the CCC refers to using hybrid heat pumps, but this is hard to square with their other plans to scale back the gas network.

A report in 2020 by Delta-EE for BEIS compared the costs of installing different types of heating system. This report shows that a like-for-like replacement of a gas combi boiler by a local installer can cost as little as £2250, while a new build gas central system including new radiators, putting in the gas supply line and controls would be £5400. These are the heating systems used by 85% of UK households today.

In contrast, an 8kW air source heat pump (ASHP) fully installed including fittings, buffer tank, cylinder and controls, but excluding the heat distribution system would cost £ 8,750. In reality, for a non-hybrid heat pump, it would be necessary to fit new radiators, and, for example, a 16kW Air Sourced Heat Pump (ASHP) fully including a heat distribution system would cost £21550.

Ground Source heat pump systems cost more, for example, a 12kW GSHP fully installed including buffer tank, cylinder, ground works, controls and the heat distribution (underfloor heating downstairs and radiators upstairs) system would cost £27350.

A hybrid heat pump is a bit cheaper than a fully electric system, but only by between £450 to £2800.

Gas Users Organisation Technical Director, Andrew Newman, explains:

“The sums just don’t add up, based upon official government figures.

“24 million households who currently use gas central heating will expect proper scrutiny of the high costs that they would be expected to pay. It is quite clear that by quoting an “average” figure of £10000 per household, the CCC are putting the most optimistic gloss on the real costs.

“Consumers deserve an explanation from the CCC about why their Carbon Budget report doesn’t reflect the true costs for households of switching to heat pumps, evidenced in existing research documents published by BEIS.

“The first thing to acknowledge is that for the majority of households, finding an additional £10000 up-front to change their central heating system is already an impossible ask. But in reality, for many households the costs could be much higher.

“Most UK consumers are not aware of heat pumps, but they are well-understood as the technology is widely used in other countries, where they don’t have the benefit of a national gas distribution system. Heat Pumps are an efficient form of electric heating but domestic consumers would expect to see higher fuel bills compared to gas. In 2018, BEIS commissioned a report into heat pumps by Element Energy, that concluded that in all scenarios considered, the lifetime costs for consumers using heat pumps would be higher than if they stuck with their existing gas heating.

“If the CCC is assuming that lower costs can be achieved by using hybrid heat pumps, which use both electricity and gas, then the CCC needs to explain the economics of how the gas distribution system would be paid for, when the volumes of gas supplied would only be a small fraction of today’s usage. This would likely lead to job losses and additional stress on workers in the industry.

“Households are being expected to ditch their existing gas central heating systems, which are clean, convenient and the cheapest option available, and deserve answers from the CCC.”