1) It is widely accepted that heat pumps will play a major role for decarbonising heating. But their running costs are usually higher than gas boilers. This is because we put most of the climate policy costs on electricity and almost none on fossil fuels.
3) An obvious solution is to shift levies away from electricity. There are several options including shifting levies to fossil fuels, shifting the levies to general taxation perhaps combined with a modest carbon tax on fossil fuels or exempting the electricity used by heat pumps.
4) Option 1: Share levies based on carbon
Levies would be shared based on carbon intensity of fuels & encourage switch to increasingly clean power. NL already doing this: tax on fossil gas up to 43% higher by 2026 (compared to 2019 levels) & lower taxation on electricity.
5) Option 2: Move levies into general taxation
This approach would mean to pay for the levies on electricity via general taxation. It could be combined with a modest carbon tax on gas. This is effectively what Germany does. cleanenergywire.org/factsheets/ger…
6) Option 3: Exempt electricity from levies and taxes used by heat pumps
Households installing a heat pump would receive a levy discount on the amount of electricity used for heating. Denmark has done this with the effective tax rate being 0.1p/kWh. ec.europa.eu/energy/sites/d…
7) All of these options exist in different variations in other countries and could be adapted for the UK context. @racheljanetwolf @publicfirst_pf led analysis published earlier this year calculating what it would mean for households and the Exchequer. publicfirst.co.uk/options-for-en…
9) Why is this issue so fundamental? As long as the running costs for clean heating are higher than fossil fuel alternatives government would have to provide huge subsidies to make economics stack up or regulate for less economic technologies. Both politically very difficult.
10) In the UK the taxes and levies on gas are particularly low. This results in one of the lowest heat pump installation rates in Europe.
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1) Let’s take a step back to understand what’s going on here. The Energy Company Obligation (ECO) is a long-standing energy efficiency programme. The first variation of its kind started in 1994. 10 years ago I wrote my PhD thesis on it @ecioxford. sciencedirect.com/science/articl…
2) ECO (or the Supplier Obligation as it is also known) has always supported installing new fossil fuel boilers. Especially during EEC 1+2 and CERT millions of condensing boilers were installed. This led to very large energy savings. centrica.com/media/1635/bg_…
The UK hydrogen strategy is finally out. My take on it in this thread. gov.uk/government/new…
1) The hydrogen strategy rightly identifies hydrogen as a key ingredient for the energy transition especially in areas such as power, industry and parts of the transport sector.
2) As my quote on @BBCNews says “But, as the strategy admits, there won’t be significant quantities of low carbon hydrogen for some time. We need to use it where there are few alternatives and not as a like-for-like replacement of gas.” bbc.com/news/science-e…
Not only can we afford the costs of net zero but we will have to. The alternative is a disastrous and very costly future. Excellent piece by @jameskirkup@SMFthinktank@spectator.
1) The climate deniers lost the battle around the evidence base and failed with their attempts to discredit the science more than 10 years ago.
2) Unable to challenge climate science the deniers have now turned to the costs of net zero as the new battleground. On a weekly basis they attack policies driving decarbonisation as being unaffordable.
In recent weeks claims have been made that electrification of end uses doesn’t deliver carbon savings because it runs on dirty fossil fuel generation. I argue here that these arguments do not stack up and prolong the combustion of fossil fuels. Thread 1/n energymonitor.ai/tech/electrifi…
2) Estimating carbon savings associated with electrification is complex. A number of analysts have made admirable attempts to appraise emissions savings from a shift to EVs and heat pumps. These studies show electrification leads to significant reductions in carbon emissions.
3) The German media reported widely on research claiming electric cars that run on power generated by coal are no cleaner than petrol and diesel cars. @AukeHoekstra quickly debunked this.
The Fit for 55 package presented last week includes carbon pricing in the buildings sector through an ETS. This raises equity concerns that will need to be addressed or the project will fail. euractiv.com/section/climat…
2) Carbon revenues can also be used to lower policy legacy costs put on energy bills. This is what Germany is implementing. Revenues will be used to lower RES surcharges, relief measures for citizens and climate action support programmes. @cleanenergywirecleanenergywire.org/factsheets/ger…
Opponents of heat electrification often state heat pumps 'don't work in old buildings'. Not true says @JohnCantor2 dispelling this myth in his excellent article. And John knows - he has been designing & installing heat pumps since the 1980s. Thread 1/7 heatpumps.co.uk/2020/11/03/hea…
@JohnCantor2 2/7 First conclusion: “The right heat pump could be made to heat any building to any temperature we like. But the crux of the issue is the installation cost and the running cost.”
3/7 The question John says that we should ask is – “can we heat old buildings and achieve acceptable energy-efficiency?” His response: “Well… we probably can, and as time passes, it gets better.“