Flexibility and market evolution

The study will identify the significant technical fiscal and political challenges current heat decarbonisation strategy faces and outline an alternative approach involving greater use of hybrid devices that offers both lower consumer costs and greater potential to cut carbon emissions than projected based on current policy and consumer behaviour. Arguments will be presented through four linked pieces of analysis:

1. An examination of the costs of the Government’s Clean Heat Market Mechanism (a key policy intervention to promote heat pumps in the appliance market).
2. An approximation of the additional network upgrade requirement early transfers to heat pumps represent in comparison to hybrids.
3. A view on what extending the Green Gas Levy beyond its current cut-off date could do to the emissions intensity of the gas distribution network (by encouraging more biomethane production).
4. Voter polling that analyses their view on different approaches to heat decarbonisation.

The paper will include a series of policy recommendations for government to take forward in order to enhance progress on decarbonisation of domestic heat.