The State of Net Zero – Implications from the SPRING BUDGET

As the UK moves from target setting to delivery, it’s important to take a look at how the UK is progressing towards its Net Zero goals, using the Government’s most recent plans, announcements and policies.

What did the Spring Budget announce?

The Spring Budget included some modest but interesting plans for heating policy centred around the electricity grid and planning regulations for heat pump installations. The Government recognised the UK’s inefficient planning system, consulting on changes to permitted development rights that aim to remove barriers to investment.

What’s the intended outcome?

The goal is to make it easier to install air source heat pumps as well as electric vehicle charge points. Investment will be made to support the digitisation of the planning system, exploring the opportunities that Artificial Intelligence could create to speed up the development of local plans.

Preparing for widespread electrification of heating

Alongside this, the Chancellor committed to speeding up electricity grid connection times, boosting capacity in preparation for widespread electrification as home heating is decarbonised.

Plans include halving the time it takes to build new transmission infrastructure, whilst reforming the overall connections process, ensuring new viable projects can connect to the grid in a timely and cost-effective manner.  This will see an increase in demand for heating controls as the barriers preventing heat pump installations in some areas are removed and customers seek greater control over their indoor climate.

Further policies in 2024

In addition to the Spring Budget, there were other updates on various policy schemes and initiatives in the heating sector.

Clean Heat Market Mechanism

The Clean Heat Market Mechanism (CHMM), originally set to be introduced in April of this year, has been delayed by a year. The market-based mechanism aimed to incentivise investment in heat pump systems by placing an obligation on heating appliance manufacturers, to meet targets based on the proportion of low carbon heat pumps sold each year relative to fossil fuel boilers. The scheme requires obligated parties to face penalties for each missed target, whilst providing credits for each qualifying heat pump installation. The proposals are now set to come into effect in 2025, after a short consultation on the proposed date change.

Boiler Upgrade Scheme

There have, however, been many positives for the low carbon heating industry in the first quarter of 2024. It was recently reported that demand for the heat pump consumer grant scheme, the Boiler Upgrade Scheme, increased by 39% compared to January 2023, with over 2,000 applications made in January 2024[1].

This was helped by changes made to the scheme to allow consumers to claim £7,500 towards the cost of an air source or ground source heat pump. Since 2018, there has been a notable 125% increase in heat pump sales over the past six years, with applications set to rise in the coming months as people take advantage of the increased grant levels[2].

Wins for the heating control industry

The outcome of the consultation on boiler standards and efficiencies was also published, with some great wins for the industry. The Government will be mandating the use of open protocols for heating controls and combi boilers, as well as recommending the use of Thermostatic Radiator Valves (TRVs) and auto balancing. Drayton welcomes the decision not to mandate the installation of Class VI boiler controls, allowing greater consumer choice for heating controls.

Drayton is looking forward to a future Ecodesign and energy labelling consultation in 2024, setting stronger standards for the heating industry. A key outcome of this may be the required use of open protocols for system and regular boilers by 2026, and considering if Class I-III controls should be prevented from being placed on the market.

[1] Demand for heat pumps surges as grant application increase by 39% - GOV.UK (www.gov.uk)

[2] Heat Pump Association launches new Statistics webpage showcasing growth in the sector. - Heat Pumps