Decarbonising Scotland’s heat - the elephant in the room

Posted: 10 Dec 2020

Pauline Blanc

Customer Policy & Strategy Manager

If you ask people what they can do about climate change, you’ll often hear about switching from a petrol car to an electric vehicle, eating less meat, flying less often. However, very few people mention installing insulation and low carbon heating technologies...

The energy system is complicated, it’s evolving quickly and even industry players have differing opinions about the right decarbonisation pathway. At Kaluza, working with our partners including Mitsubishi, Dimplex and Sunamp, we are pushing progress on existing electric heating solutions.

About 11% of global greenhouse gas emissions come from heating our homes. Yet, in most countries, the focus has been on decarbonising power generation. In Scotland, the contrast is salient with fossil-fuelled generation falling by more than 70% in the last decade but only 4% of homes having low carbon heating today. Despite today’s numbers, Scotland has one of the most ambitious targets committing to decarbonising 1 million homes by 2030 and all homes by 2045. So, how do we get there? We need to address the elephant(s) in the room.

The ‘customer’s dilemma’

Pam, who lives in Glasgow, cares deeply about climate change and the environment and does everything she can to play her part. She realises that her gas boiler needs replacing and, whilst she knows that her electricity and gas providers promise her carbon neutrality, she doesn’t know whether that truly offsets the emissions of the gas she uses. She is therefore looking for a solution that doesn’t emit in the first place. Pam will quickly realise that this isn’t an easy task… 

Finding and selecting the right low
carbon technology solution

Pam will have an array of low-carbon heat technologies to choose from, from heat pumps and solar thermal panels to electric storage heaters. Encouragingly, there appears to be a range of technology options available to Pam. Unfortunately, Pam has a lot of research to do on her own and information is hard to find.

In theory, an installer would guide Pam in choosing a solution that best fits her needs, with local planning authorities on-hand to help identify critical regional differences in housing stock, networks and climate. However, current market uncertainty is holding back installers and local authorities on incentivising customers to install cleaner technologies altogether, therefore slowing down the wide scale rollout of existing and viable technologies and associated services.

UP FRONT AND ONGOING COSTS

Another big challenge for Pam will of course be cost: both upfront and ongoing. Pam will soon realise that decarbonising her home will require an energy efficiency upgrade, like most Scottish homes. This has huge long-term benefits (comfort, running cost reduction) but requires upfront investment. Beyond efficiency, switching to electric heat is also initially expensive – particularly when compared to a boiler replacement. 

To help, Pam could access the recently-launched renewable heat scheme for homeowners, a £4.5 million cashback incentive to help people install renewable and energy efficiency measures in their homes. Through this incentive, Pam could receive up to £13,500 of Scottish Government support. 

So, what can we do to help future Pams?

Consumer awareness & engagement 

Pam is an exception. Currently, very few consumers take an active interest in how their homes are heated, as long as it’s affordable and they are comfortable. Decarbonising heat will require individual behavioural change at a national scale. Consumers will need to upgrade their homes’ insulation and choose low-carbon heat technologies. This is a huge ask of consumers and new business models such as heat-as-service are emerging to ease this transition. Upfront costs will need to be considerably lower and consumer confidence in technology significantly higher, helped by moving performance risks to the supplier, not the customer. 

Empowering consumers as part of a smart grid

The wider energy system will also need to effectively accommodate these new electric, low carbon heating systems so it can continue to balance supply and demand while integrating higher levels of renewable energy. This requires the demand of devices to be intelligently managed so that they take in energy when it is cheaper and greener rather than times of high demand. 

Exciting progress has been made with AI-enabled heating systems in Scotland. Working on the world’s biggest pilot smart grid project, SMILE H2020,  Kaluza is demonstrating devices’ smart grid compatibility on the Isle of Orkney,  through optimising domestic storage batteries, heating systems and even electric car chargers to import wind energy from the 900kW community turbine during off peak hours, or when there is surplus wind generation.

 

Scaling the technologies available today 

We must avoid a ‘wait-and-see’ mindset when it comes to technology. This may not be a one-horse race, but that should not prevent Scotland backing the likely winners – such as smart electric heating – with conviction today. Over the next ten years, there is a huge opportunity around implementing existing low-carbon heating options – particularly energy efficiency upgrades and electrification of heat. By starting with new homes and off-gas grid properties we can quickly learn best practices to be replicated across the on-gas grid housing stock.

Clean solutions remain too expensive and incentives to help overcome the upfront cost differential between heat pumps and fossil fuel systems – grants, scrappage schemes, cashback programmes – would all help level the playing field. We must also encourage local authorities to develop their own heating strategies, involving their communities based on their context and resources, providing better market visibility to those involved in the heat value chain.

The need for clear signposting and policy certainty 

Most Scottish homes will need to change in order to meet national decarbonisation targets. To achieve this, most people, like Pam, need to be more aware of their options and have easy access to all the information and guidance they need. Consumers need to be financially supported in their transition and to be rewarded for making the switch as well as enjoying a warm home. 

This requires all industry players, smart technology solution providers, device manufacturers, installers, energy retailers, lenders, to work together to develop attractive product offerings that solve these challenges. Comprehensive policy packages that send clear, long-term signals to the market and bring forward accessible, smart and cost-effective solutions will be key. 

The Scottish government is due to publish its Heat in Buildings Strategy by the end of the year. We look forward to hearing about the specifics of the strategy and getting on with the challenge!

 

With thanks to Iain Duncan (OVO Energy) and Katie Milne (OVO Group) and Marzia Zafar (Kaluza) for assistance in writing this blog.

(1)https://ourworldindata.org/ghg-emissions-by-sector

(2) https://www.theccc.org.uk/publication/reducing-emissions-in-scotland-2020-progress-report-to-parliament/

(3) Energy Systems Catapult research presented during the 9th of November workshop

About the Author

Pauline Blanc

Customer Policy & Strategy Manager

Pauline is Kaluza's Customer Policy and Strategy Manager, working tirelessly to empower consumers to become active participants in the future energy system. Prior to joining Kaluza, Pauline worked as an Innovation Manager at the World Energy Council. Collaborating with experts globally, she led the organisations' breakthrough work on energy storage, the future of the grid, and hydrogen. Pauline has an MSc in Environment and Development from the London School of Economics and Political Science

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