The general election result has redrawn the UK’s political map, not least across our rural communities where new Labour (and quite a few Lib Dem) MPs now represent the interests of constituents and consumers who are often overlooked in the energy and decarbonisation debate.
Great British Energy is tasked with delivering clean power by 2030, as well as decarbonising the electricity grid and investing in a massive increase in the UK’s capacity for renewable energy. It has promised to reduce everyone’s energy bills by £300 per year. But what will this mean for rural energy consumers who suffer from rural grid constraints, in some of the oldest, least energy efficient homes in Britain? After all, it’s these communities who will live among the new onshore wind farms that will be built, and the new transmission lines that will carry energy to our towns and cities. It’s these households and businesses that could find it more difficult and expensive to decarbonise; particularly their heating.
A key challenge remains finding a mix of low carbon heating solutions that are acceptable and affordable for all homes and premises without too much disruption or cost to ordinary families and businesses. We welcomed the last government’s decision in September to drop plans to ban the replacement of oil and gas boilers in rural, off-gas-grid homes from 2026 –instead aligning this with plans to ban fossil-fuel boilers in homes on the gas grid by 2035. Many rural MPs were persuasive in exposing the difficulty some of their constituents would face if this unfair “rural-first” boiler ban had gone ahead as originally planned without sufficient financial support.
Ed Miliband, the new energy secretary, has echoed this since taking office in July and has confirmed that the Labour Government could remove the 2035 commitment. Instead, Labour intends to incentivise the uptake of heat pumps and other low carbon heating technologies to meet net zero.
A multi-technology approach to decarbonising heat will be even more important in rural areas – where a wider range of low carbon heating solutions will be needed to reflect the older and more varied building types that are prevalent in the countryside.
A significant number of rural properties may not be reached by grid and energy efficiency upgrades, due to the relatively high cost. The government should therefore support alternative low carbon solutions, including Renewable Liquid Gases (RLGs) such as Calor’s BioLPG that will help rural homes and businesses to decarbonise without a high upfront cost. RLGs are a direct drop-in replacement fuel for existing LPG boilers, and are already sold in the UK – albeit still in relatively modest volumes. The journey to net zero need not create disruption for consumers.
Heat pumps remain an expensive option. The latest statistics show that the average cost of installing an air source heat pump via the existing government Boiler Upgrade Scheme (BUS) is £13,333. This also does not include the energy efficiency retrofit sometimes needed for the heat pump to run efficiently. The BUS grant of £7,500 only covers a small part of this – with households expected to pay the difference. The National Audit Office (NAO) also found the cost of heat pump installation has not fallen as rapidly as the government previously predicted.
The rural decarbonisation challenge is perhaps most acute in Scotland where the government appears unrealistic about the cost of transition. According to Stephen Good of the Just Transition Commission, “The Scottish Government has estimated £33bn is needed to decarbonise Scotland’s homes and buildings. We have approximately 2.6 million homes and 230,000 non-domestic buildings, so if you do the basic maths, that’s about £11,500 per building. That might just about cover the installation cost of a heat pump in an easy-to-treat property. To meet the tougher end of the net zero objectives, we’ll need likely four times that investment, so circa £45,000 per building to do it once and do it properly…”
The NAO also said the UK government’s assessment that up to 20 per cent of all homes won’t be suitable for heat pumps needs greater clarity. It is likely that a large proportion of these homes will be hard to treat rural homes, requiring high heat-demand solutions, so may therefore be unsuitable for heat pumps. At the moment, low carbon, high heat-demand solutions –including standalone boilers which run green gas or hybrid heat pumps (that use existing gas boilers) – are not supported by existing grants such as the BUS.
The previous government’s position on hybrid heat pumps seems increasingly untenable following Energy Systems Catapult’s report, Innovating to Net Zero 2024, which identified that hybrid heating systems could reduce total energy system costs by 7 per cent (£200bn) compared to heating systems without hybrids. This could help the new government reach its 2030 clean grid target at lower cost.
A simple solution for an incoming government would be to tweak existing support programmes such as the BUS to include other low-carbon technologies. It seems inconsistent that the scheme allows consumers to upgrade to a biomass boiler, but not a hybrid heat pump. A hybrid heat pump is also low carbon and has much lower particulate emissions. The Scottish government already provides grant and low-interest loans that include hybrid heat pumps via its Home Energy Scotland Scheme. The UK government should follow suit.
To increase the availability of RLGs, the government could follow the lead of the Sustainable Aviation Fuel (SAF) mandate – an obligation on airlines to progressively increase the proportion of sustainable fuel they use for their planes. The SAF mandate provides a blueprint for the LPG industry to accelerate the transition to RLGs.
If implemented, LPG suppliers, like Calor, as well as suppliers of domestic heating oil, would be required to supply increasing volumes of renewable fuels to their customers. This approach could catalyse the low carbon transition in rural home heating, particularly for those homes unsuitable for a heat pump. We would like to continue discussions with the new Labour government on how best to implement this in the rural heating market.
The new UK government could also look at Welsh Labour’s recently published heat strategy that acknowledges the role existing boilers could play if run on biogases such as RLGs. The new government should take a holistic, inclusive approach to decarbonising home heating. A fair transition to net zero shouldn’t mandate a certain technology; it should acknowledge the evidence that shows varying property types require a range of approaches and should support all low carbon technologies. As we move towards net zero, we need government policy to support low carbon heating solutions which are suitable for every home.
