Chancellor Philip Hammond announced in the Spring Statement on 13 March 2019 that:
- “We will introduce a Future Homes Standard, mandating the end of fossil-fuel heating systems in all new houses from 2025.“
- “We will publish proposals to require an increased proportion of green gas in the grid, advancing decarbonisation of our mains gas supply.”
These announcements re-enforce previous statements from the Committee on Climate Change (the CCC), that without a step change in approach, the UK would be unlikely to meet its obligations under the Paris Agreement on reductions in carbon emissions. Read the Chancellor’s Spring Statement in full.
The consequences of these announcements are threefold:
- The Future Homes Standard will require significant improvements in the build quality of new homes, to reduce heat losses substantially. It is likely that these homes will need far better air tightness levels (much fewer draughts). Homes will also make use of a Mechanical Ventilation Heat Recovery (MVHR) system to provide a stream of fresh air (Read about MVHR systems).
- Boiler manufacturers are likely to lose out on new home sales, with manufacturers of other products such as heat pumps likely to benefit. Whilst the market for boilers for new build homes is relatively small (circa 100,000 units), compared with the market for replacement boilers in existing homes (around 2,000,000 units/year), the long term trend is clear.
- Efforts to decarbonise the existing natural gas grid will need to be accelerated. Although no specific timescales are mentioned in the Chancellor’s statement, a change from 0.1% hydrogen to 20% is certainly possible by 2025. To have a fully decarbonised gas grid, using 100% hydrogen, could be achievable by circa 2035 but this potentially requires large scale Carbon Capture and Storage if natural gas is used as the source of hydrogen.
Our View On The Future Homes Standard & Banning Connections To The Gas Grid
The idea that new homes should be built to a high standard with superior energy efficiency is not a new one but it is a good one. The energy required for space and water heating can be reduced by upwards of 70% by doing this alone. That improvement is a game changer in itself – who would need a 30kW output gas boiler in a new home when the maximum heat demand from the home was nearer to 5-10kW and the average demand maybe 1-2kW? Other forms of heating become options, such as air source heat pumps or much lower output gas boilers . The frustration is that we have lost so much time due to short term thinking by politicians. The previous Zero Carbon Homes standard, which would have delivered most of the same benefits as the proposed Future Homes Standard, was cancelled in 2015 by Philip Hammond’s predecessor as Chancellor, George Osborne, reportedly after lobbying by house builders who favoured lower standards of build. Their argument at the time was that better homes cost more to build; this was true to a point but, over the lifetime of the home, the total build and operating costs of a well insulated home are substantially lower.
Whether gas boilers should be banned in new homes is more debatable. If the politicians actually do what they say, and require decent standard homes to be built, then most of the problem goes away anyway; owners of Passivhaus standard homes rarely if ever use space heating. For the much lower levels of heating needed with energy efficient homes then there are a variety of product solutions, including decarbonising the gas network. Offering different technology alternatives is the wisest choice; policy makers have a poor track record at picking technology winners.
Will it Cost More to Heat New Homes?
The simple answer is No, not if it is done properly. No doubt there will be many articles written in the next few years about how heating new homes will be much more costly using electricity. However that fails to understand how heat pumps work and the performance they can deliver. An heat pump can be used to extract far more energy from the heat source (the air, the ground or a body of water) than it consumes. Heat pumps are measured according to their coefficient of performance or COP (sometimes CP or CoP) and typically produce a COP of around 3.5. That means a heat pump using 1kWh of electrical energy can deliver 3.5kWh of heat.
Table 1 below illustrates how this could work. If a home is spending £800/year on 20,000 kWh of space heating using gas then a much better insulated home (HE) could reduce the energy demand by 70% and reduce the cost to £240/year. As an alternative to using gas, a heat pump with a CoP of 3.5 would require 1,714 kWh of electricity to deliver 6,000 kWh of heat, costing £308/year. It’s a £68 extra cost compared to the gas option but well below what an existing home using gas would cost. The key takeaway from this is that the biggest gain is from building homes to a high standard. If heating these quality homes takes much less energy and dramatically reduces energy bills then the cost of decarbonising heating is affordable.
Table 1: Comparison of cost of different heating alternatives
|Options||Fuel||Energy demand |
|Annual heating |
|Existing built home||gas||20,000||£800|
|High efficiency home (HE)||gas||6,000||£240|
|HE with Heat Pump||electric||1,714||£309|
Based on gas price of 4p/kWh and electricity price of 18p/kWh.
Even if gas boilers were not banned in new build homes, their design would have to change anyway to cope with the substantially lower power outputs needed to keep well insulated homes warm.
We await the publication of the Future Homes standard with interest.