Energy white paper: Powering our net zero future

Transition to cleaner fuels

Background: Buildings are second largest source of emissions after transport. Fossil fuels dominate, used by 90% homes for heating, cooking, hot water. 85% homes are connected to gas grid.

Electricity

Future: Electricity to dominate. Government will ramp up wind farms, nuclear, test out a hydrogen village, and biomass. Will be enough wind farms to power every home in the UK. Will reinvigorate the industrial heartlands outside of London and the south east.

• Cars - introducing new building regs requiring electric vehicle charge-points in all new homes/non-residential buildings. Mass rollout of electric cars and charge points. Sale of diesel and petrol cars to end by 2030. By 2035 all cars will need to have no tail end emissions.
• Heat - electrification of heat. Move away from fossil fuel boilers over next 15 years. More Grow electric heat pump installation in new builds from 30 - 600 thousand per year by 2028. Look out for Heat and Building Strategy to be published early 2021. The electric network will become more decentralised and localised. Local solutions will be encouraged. Will be rolling out district heating systems.
• Gas - consultation this year re proposal to end gas grid connections to new homes built from 2025. Intend to increase biomethane in gas grid. Hydrogen to heat homes: Pilot for hydrogen town by 2025. Still early days. Exploring requirement for ‘hydrogen-ready boilers’

Heat networks

• Funding - £122million funding for New Heat Network Transformation programme. LAs to designate new heat network zones by 2025 (areas which be readily connected to a low-carbon heat network). Will mandate connection unless not cost-effective.
• Planning - will consider how zoning be integrated with wider local area planning for the environment, infrastructure and place.

Background: 20% of homes currently overheat in summer.

Tighter legislation

• Review of Decent Homes Standard to raise minimum performance standard as none in social rented sector at present and support decarbonisation. Government to work with Housing sector on this.
• Future Homes Standard will require new-build homes to be fitted with low-carbon heating, and high levels of energy efficiency. A roadmap for implementation to be published a.s.a.p. Meanwhile uplift in current standards.
• Clean Growth Strategy ambition: all homes should meet EPC C by 2035, where practical, cost-effective and affordable.
• Revised regs - changes to Energy Performance of Buildings (England and Wales) Regulations 2012 to deliver (EPC) Energy Performance Certificates Action Plan launched Sept 2020. Existing homes to hit EPC Band C by 2035. All rented non-domestic buildings to hit EPC Band B by 2030.
• New policy - energy-related products policy to be launched in spring 2021. Will be consulting on ecodesign and energy labelling regs across a range of products to make energy-using products (household appliances) more efficient.

Improved guidance

• Roll out of smart meters: guidance published for drafting building specifications to help install smart meters in new build homes. Avoids need for costly retrofitting.

Sequencing

Transition to start with least energy efficient housing stock first and prioritise those in fuel poverty. Look out for updated Fuel Poverty Strategy for England to be published in early 2021. Will set out multi-billion-pound plan to transform the poorest quality housing.

Funding

• Extending Energy Company Obligation (ECO) from 2022 to 2026 to support fuel poor consumers.
• Expanding Warm Home Discount (WHD) to low income homes
• Green Homes Grant - Voucher scheme.
• Local Authority Delivery schemes. (£500 million of the Green Homes Grant has been ring fenced for LA delivery).

Vouchers can be spent on cavity wall and loft insulation, air-source heat pumps, draught proofing, replacing single glazing with double or triple glazing.

• Home Upgrade Grant scheme will upgrade energy performance of worst-quality off-gas grid homes in England by supporting the installation of energy efficiency measures and low-carbon heating.
• Upgrade social rented homes: £50 million for 2020/21 to upgrade social rented homes to EPC band C, piloting innovative retrofit projects across UK. Further funding for Social Housing Decarbonisation Fund.
• Heat Recovery Support Programme - help business reuse heat which would otherwise be wasted.

Retrofitting costs to be halved by 2030: Whole House Retrofit programme is a competition to drive down install costs. Retrofits improve health and well-being, via reduction of risk to summertime overheating and damp or mould growth.

Grow the market for green finance products - consulting on how mortgage lenders could support homeowners to improve energy performance.

Empowering consumers & communities

All new builds to have smart technology to enable active not passive consumers. Improved smart tarrifs, comparison tools. Government to support energy suppliers to develop strategies for consumer engagement to help people cut bills.

Government exploring ‘Smart local energy systems’ - community based initiatives that bring together a range of issues (heat, power, transport) to reduce emissions in an integrated way, while also promoting local jobs and businesses. LAs key to delivering these systems by combining energy into their wider statutory work on housing, transport, waste and planning.

Sharing of data

Drive for increased reporting so energy industry is more transparent.

Manufacturing

Look out for new Industrial Decarbonisation strategy in 2021. Will deliver four low-carbon clusters by 2030 - centres where related industries have congregated and can benefit from using shared clean energy infrastructure.

Transport

Look out for Wider Transport Decarbonisation Plan in spring 2021, 25 year Environment Plan (air quality, biodiversity, water, resource efficiency, waste reduction).

Workforce skills

Strategy for upskilling through ‘Green Jobs Taskforce’ and National Skills Fund to be launched in 2021. 

Need more installers to retrofit existing buildings with energy efficiency and clean heat measures. In September 2020, launched Green Homes Grant Skills Training Competition -  £6.9 million funding to a range of energy efficiency and low-carbon heat skills providers and support delivery of the Green Homes Grant scheme

• Invest in transport - zero emission buses, vehicles, cycle lanes
• Hydrogen
• Nuclear Power - large scale
• Offshore wind - quadruple capacity by 2030
• Jet zero and green ships - sustainable aviation
• Greener buildings - more energy efficient, move away from fossil fuel boilers
• Carbon capture
• Protect natural environment.

• Ambition to capture carbon for ongoing storage but it’s very early days. CCUS (Carbon capture utilisation and storage)
• North sea oil and gas industry is to be commissioned. Big transition of industry into renewables.
• Treble biomethane use by 2030. Will put a green gas levy on suppliers to fund this transition but expect costs to be passed on to consumer.

New decommissioning market - Using UK’s experience of decommissioning, hope to become world leader in subject and export ‘decommissioning’ as a service.

New UK carbon market - (ETS) Emissions Trading Scheme - The Government will ramp up buying and selling emissions allowances.

Competitiveness Electricity prices are higher in the UK than Europe but the Government recognises this and is compensating UK business for this lack of competitiveness.

Value for money - Increasingly green power is the cheapest power. There have been rapid falls in the cost of renewables.

Agriculture and aviation are the hardest sectors to decarbonise.

There are currently no ‘green transport solutions’ for HGVs.