How to solve the UK’s heat pump problem

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With fossil fuel prices skyrocketing, emissions from homes in the UK stubbornly high and the price of clean electricity from renewables tumbling, it’s clear that we are not taking the right approach to heating our buildings. Heating, which is dominated by gas, makes up a large share of energy consumption and contributes 23 per cent of the UK’s greenhouse gas emissions, so tackling it is vital for both energy security and clean energy goals.

Government and much independent analysis identifies heat pumps as the key technology to replace gas boilers. The British government has committed to installing 600,000 of them a year by 2028. Yet while the number of heat pump installations is growing, deployment in the UK remains at very low levels.

Preliminary estimates for 2022 show that the UK installed only 60,000 heat pumps – equivalent to two heat pumps per 1,000 households. This puts the UK at the bottom of the European heat pump league table. In Finland, which tops the rankings, nearly 70 heat pumps per 1,000 households have been installed.

How can the UK become a European leader in heat pumps? The House of Lords’ Environment and Climate Change Committee has carried out an inquiry into the UK’s main heat pump support scheme, called the Boiler Upgrade Scheme (BUS). It concluded that the scheme is “failing to deliver on its objectives with a disappointingly low take-up of grants”; at the present rate only half of the allocated budget would be spent. The design of BUS is not perfect, but it has stimulated the market, even without any government promotion. After failed programmes such as the Green Deal and the Green Homes Grant, the UK can ill-afford yet another scheme that does not meet its potential.

Grant policies such as BUS are typical in all markets with significant heat pump deployment, but it is only one of many ingredients for a successful programme. When we analysed successful heat pump policies around the world, we found that in addition to funding programmes such as the BUS, three other ingredients are needed.

Ingredient one: the running costs of heat pumps need to be significantly lower than those of fossil fuel heating to encourage consumers to make the switch. While heat pumps are currently cheaper to run than gas boilers, the cost savings are relatively modest. The reason for this is that in the UK electricity is taxed for carbon emissions and the majority of levies for environmental and social programmes are attached to electricity bills. Gas and heating oil are subject to no carbon tax and much more limited levies. Several countries have faced similar problems and have begun to reform how they tax and attribute levies to energy, making heat pumps a much more affordable proposition. The UK government is working on this through its electricity market review but this is being held up by delays.

Ingredient two: market certainty through clear regulation and phase-out dates for fossil fuel heating systems. The International Energy Agency says no more fossil fuel heating systems should get installed after 2025 to meet net-zero targets. Many countries have adopted and announced such bans and once put in place, investment in heat pumps has followed. As the Lords committee points out, mixed messages around hydrogen for heating and the lack of clarity about the future of the gas grid is not aiding the transition away from fossil heating. Chris Skidmore MP was right to call for a firm end date for the installation of gas boilers in his net-zero review. The government should also firm up its proposals to ban fossil fuels in new homes and homes off the gas grid.

Ingredient three: wider co-ordination around heat pumps, alongside effective communication to consumers. As the Lords committee points out, 80 per cent of people in the UK have little or no awareness of heat pumps and almost two-thirds are not aware of the need to change their heating system as part of the journey to net zero. A well-designed and executed engagement programme that boosts the role for local authorities and local heating solutions is crucial.

The decarbonisation of UK heating was previously primarily a legal requirement. It’s increasingly clear, however, that it’s an economic imperative, too. Significant political capital is needed to reform the UK’s policy around heating, but that investment will return dividends. The sooner the system can be reformed, the better the returns will be.

The original version of this article first appeared in the New Statesman.

Climate Action is Energy Security: Recent Developments in the Power Sectors of India, China, and Europe

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Significant progress has been made in the renewable energy sector, with wind and solar power making up a substantial portion of global power production, accounting for almost one-quarter of noncarbon-emitting generation. This is a considerable improvement from just a decade ago when they produced less than 1% of total global electricity. Furthermore, wind and solar power are now often the long term, least cost options, making them an attractive investment for countries looking to decarbonize their energy systems.

Despite the growing momentum towards renewable energy, global coal-fired generation still totaled a record high in 2021, up by 8.5% from the previous year. The lion’s share of CO2 emissions still come from countries committed to becoming net-zero carbon in the next few decades. Nonetheless, this article suggests that a decarbonized global power system is still possible and the transition can be achieved at a low cost while maintaining high levels of reliability.

To support this clean energy transition, the article discusses the power sector reforms that are currently underway in India, China and Europe. Despite their different institutions, history and power system setups, these regions share some common trends: they rely heavily on planning and recognize the value of demand-side resources. These regions offer promising pathways for power sector reform and they provide hope for a decarbonized energy future.



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How to prepare our grids for electric trucks

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In mid-February, the EU Commission is due to publish a law proposal essential to the energy transition, the next CO2 standards for heavy-duty vehicles (HDVs)The proposal is expected to accelerate the emissions reduction of fossil-fueled trucks and, in parallel, incentivise sales of battery electric trucks.

While it’s widely recognised that electrifying freight kilometres is key to cutting the EU’s transport emissions, some stakeholders raised doubts about whether power grids will be able to manage the charging of electric trucks.

The short answer is yes, but accelerated grid connections and smart charging will be key to integrating these new EVs into our power grids and keeping costs in check.

“Smart” or “managed” charging means charging EV batteries, for instance, those of electric truck fleets at a rest stop or depot, when costs for electricity are lowest, i.e. renewables are available and there’s spare capacity on the grid. That way, smart charging reduces carbon emissions and the need for costly upgrades of the power grid. 

Ambitious CO2 targets are key

Setting an ambitious target for zero-emission trucks in the upcoming proposal is crucial to accelerate urgently needed reductions of freight emissions.

Trucks — ranging from urban delivery trucks to long-haul tractor-trailers — represent less than 2% of Europe’s vehicles but cause around 25% of emissions from road transport, and freight volumes are growing. 

While current e-truck numbers are still low in Europe, they will grow significantly through 2030, according to announcements by governments and truckmakers.

Recent research shows that by 2035, most electric trucks across short, regional and long-haul segments will likely be competitive to Diesel trucks in cost, but also range, payload and driving times. Energy regulators and grid operators need to anticipate these growing e-truck numbers and proactively plan for trucks’ grid use. 

Plan for it now

To optimally integrate electric trucks into power grids, governments need to start planning now. This includes matching the needs of hauliers in terms of charging demand and locations, with the grid’s current and planned hosting capacity, e.g. as outlined in national grid investment plans.

The energy demand for battery-electric trucks in Germany is estimated at 13 TWh in 2030, or the equivalent of about 1% of the country’s total electricity produced. This does not necessarily imply increasing peak demand by the same amount. Some investments in grid reinforcements will be needed, but how much will fundamentally depend on how truck charging is optimised.

The analysis available so far suggests that additional peak demand from electric truck charging can be reduced by 50-80% if charging is optimised, depending on use cases and favourable regulatory conditions, e.g. the availability of time-of-use tariffs.  

The majority of electric trucks needed for urban and regional use can charge at the depot, where smart charging overnight or mid-day (e.g. to absorb wind or solar energy) provides great potential to save costs.

Long-haul trucks, operating long-distance trips across the EU, will rely more on public charging. Their mandatory resting time of at least nine hours offers plenty of flexibility to exploit readily available grid capacity as well as cheaper energy.

Smart charging, based on time-of-use tariffs, helps truck operators automatically adjust their charging to constantly changing cost of electricity. It is also possible to optimise for shorter charging periods, for example during their minimum 45-minute mandatory break at highway truck rest areas.

A growing range of smart charging services is already available for passenger EVs across Europe offering tariffs and software that helps fleet owners to optimise charging to their schedule.

Energy market reforms just opened for consultation, offer an important opportunity to advance the availability of time-of-use pricing of energy and networks, and the build-out of a market for smart charging services.

Key arbiters in preparing the power grids are Europe’s transmission and distribution grid operators who have a tremendous opportunity in e-mobility to optimise grid efficiency.  

Make truck charging a priority

EU decision makers can help truck operators transition to electric by quickly finalising two more legislations that will help deploy the charging infrastructure in the next decade.

The Alternative Fuels Infrastructure Regulation, currently in final negotiations, will support Member States in building the necessary public charging framework for trucks along Europe’s highways.

The Energy Performance of Buildings Directive (also in negotiations) sets requirements to upgrade new and existing buildings with EV charging infrastructure and shouldn’t miss the opportunity to advance upgrades at logistics depots, too.

The EU won’t be able to reach its climate goals without drastically cutting freight emissions. Direct electrification via battery trucks is now the widely recognised way forward, offering the most energy-efficient option to decarbonise road transport.

But if charging is not planned for proactively, and managed smartly, the additional electricity demand will lead to higher costs for consumers, the power system, and the environment.

It may also eventually slow down the clean energy transition, or pave the way to more inefficient alternatives such as hydrogen.

Accelerating EV sales is not enough — we now need to ensure EV’s efficient integration into our power system, and use the existing infrastructure more efficiently before expanding it, through smart planning and charging.

The original version of this article appeared in Euractiv.

Good COP/Bad COP: Balancing fabric efficiency, flow temperatures and heat pumps

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Heat pumps are widely recognised as the key technology to decarbonise building heat demand in Ireland. To receive grants for heat pumps, homeowners in Ireland are required to have a heat demand per unit of floor area, known as a ‘heat loss indicator’ (HLI), below a certain level. The HLI requirement was designed to protect households from high bills if they switched to a heat pump.  

There is a concern that the HLI is limiting heat pump deployment, thereby hindering Ireland’s goal of net zero in 2050. This review of the HLI policy and associated rules was undertaken alongside a discussion of heat pumping technologies and their operation, optimal performance and innovation. While there is still a major role for building fabric energy efficiency upgrades, innovation in heat pumping technologies means they may be able to more easily replace combustion-based technologies than has been previously assumed due to better performance and higher output temperatures.

To achieve more rapid and potentially smoother deployment of heat pumps, current HLI grant requirements should be reevaluated. Initially, the HLI requirements could be loosened, subject to relevant consumer advice and protections. In the longer term, a focus on flow temperatures and in-situ performance may be more appropriate. Building fabric efficiency requirements could be maintained but simplified. Finally, trials and programmes to evaluate heat pump performance in Irish buildings should be expanded and expedited in order to provide accurate and local data on this strategically important technology.

Five key actions for activating household demand-side flexibility

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Securing a clean, efficient and affordable power system is a complex undertaking in the best of times. The current energy crisis, however, has compounded the challenge with a cost-of-living crisis, the need to free Europe from its dependency on Russian fossil gas, and the ever-present spectre of climate change. A seemingly insurmountable task begs all available resources. One of the most powerful — and often undervalued — solutions is household demand-side flexibility.

Empowering and rewarding consumers who are able to shift how and when they use electricity is a vital power system resource. Demand-side flexibility contributes to a reliable and decarbonised power system while reducing costs, a critical outcome for low-income and disadvantaged households.

On 28 September, the Electrification Academy was pleased to welcome Sophie Yule-Bennett to unpack the insight and recommendations from RAP’s 2022 study The joy of flex: Embracing household demand-side flexibility as a power system resource for Europe. She explored:

  • The benefits of demand-side flexibility: sustainability, reliability, equity and affordability.
  • Barriers to flexibility as a resource.
  • Five key actions for activating household demand-side flexibility.

Metrics matter: Efficient renewable heating and cooling in the Renewable Energy Directive

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The Renewable Energy Directive (RED), designed to help meet the EU’s ambitious 2030 and 2050 climate targets, sets targets for growing renewables usage for heating and cooling in the building sector. As currently written, however, the RED encourages inefficient uses of renewables in buildings to meet these goals.

In this paper, we suggest reforms to the RED would ensure a more efficient and balanced approach to renewable heating and cooling in the EU. It shows that the RED’s metric for determining the contribution of renewable heating and cooling tends to favour less efficient technologies. The paper also discusses how the use of electricity for heating and cooling is not accounted for in the RED definition of renewable heating and cooling, nor in the methodology for the renewable contribution of heat pumps.

By adapting the definition of renewable heating and cooling and updating the definition of renewable heat from heat pumps, the RED can provide a more comprehensive overview of the status of decarbonising the sector. We recommend the following policy adjustments:

  • Amend Article 7 (3) of the RED to calculate the useful energy produced instead of fuels consumed to produce it.
  • Mandate Eurostat to develop a consistent method for counting the amount of (renewable) electricity used for different services including heating and cooling, both in general and from heat pumps. To avoid double counting, remove this electricity from the heating and cooling sector when calculating the headline renewable share.
  • Amend Annex VII of the RED to include the electricity used to drive heat pumps so that it accounts for the full contribution of heat pumps.

EV smart charging: A golden opportunity for distribution system operators

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Electric vehicles (EVs) offer a cleaner, more energy efficient means of transportation than vehicles with internal combustion engines. Less well known is that they also provide a still largely unused resource to improve grid operation. Although the additional electricity demand from EVs will be manageable on a power system level, it may create the occasional challenge for parts of local distribution grids.

Smart charging of EVs can ease these periods of stress and increase overall efficiency. A “smart” charging process automatically adjusts the EV’s demand for electricity to periods of low stress on the grid – or to periods with an abundant supply of renewable electricity – and thus ensures lower costs for the user and the system.

As a result, smart charging can help avoid, or at least defer, costly investments in network capacity. With the growth of smart charging technology and services that turn the potential aggregation of residential flexibility from EV charging into a powerful, responsive system, distribution system operators (DSOs) have a golden opportunity to capitalise on EVs as a grid resource.

Smart tariffs pay off

In a 2022 study, the Regulatory Assistance Project (RAP) analysed nearly 140 tariffs and services for EV smart charging in Europe. Most of these services are based on dynamic time-of-use energy tariffs: when high renewable energy supply on the power system coincides with periods of low electricity demand, wholesale day-ahead prices drop. EV drivers save money by shifting charging to these cheaper periods, as their retail pricing follows these hourly wholesale rates.

European consumers face dramatically higher bills due to increases in energy and electricity prices over the last 12 months. Shifting EV charging to lower-priced periods has helped mitigate the rise in costs and improve the savings potential because the price spread within a given day grew even more in the last year. In Germany, for example, the difference between base and peak power prices grew from 17% to 52% between 2020 and July 2022. A reduction in levies on consumer bills counterbalanced the increase in the base prices almost entirely. Consequently, users who charge during off-peak hours can keep their charging costs stable, and those not yet using smart charging have been offered a strong incentive to do so.


DSOs are missing the boat

With growing incentives for EV drivers to use smart charging, the number of tariffs and services continue to grow too. However, RAP found that few – just 13 out of 139 – smart charging services and tariffs use data from local grid operators that reflects the actual system conditions. Without these signals, such as those provided by time-varying network tariffs or by market-based, aggregated residential flexibility, grid operators are missing out on an opportunity to optimise grid efficiency.

Basis for smart tariffs and services


Designing time-varying, or “time-of-use”, network tariffs can align consumer interests with those of grid operators: Similar to dynamic energy contracts that mirror day-ahead wholesale spot market prices, a dynamic network price could signal to consumers where and when to shift their electricity consumption. This can mean adjusting charging away from peak hours to limit demand peaks on the grid or shifting to times when renewables are plentiful. Simulations based on initial pilots of dynamic network tariffs suggest clear benefits for consumers with flexible resources such as EVs, and importantly, cost reductions for all other system users. EV charging, and the emerging market of smart charging services, serves as a great test bed for further trials of dynamic network tariffs.

Paving the way for flexibility

Even static time-of-use network tariffs – such as simple night and day rates – can go a long way towards improving grid efficiency, especially when combined with procuring market-based flexibility. The 2019 European Electricity Market Directive requires DSOs to use market-based flexibility wherever possible to avoid or defer grid upgrades or new connections. However, many member states still have not implemented this provision in their national legislation. The greatest flexibility resource in Europe is households, with EVs typically being their most flexible device. Without the proper regulatory framework, it will remain largely untapped.

Local system operators could use the aggregated flexibility offered by smart charging services to improve network operations. EV drivers benefit from their participation and DSOs gain access to a powerful distributed flexibility pool. Grid operators in the UK are leading in the use of market-based flexibility. Over just a few years, the contribution of EVs has grown as high as 22 megawatts of flexible capacity, the volume offered by smart charging service in Scotland.

The golden ticket

As more and more EVs connect to the grid, the flexibility of smart charging offers DSOs a formidable solution. Energy regulators can help grid operators make the most of this golden opportunity to improve system management and reduce costs by designing network tariffs that reflect actual conditions on the network to encourage flexibility. Creating the framework conditions for the best use of flexible resources in local grids will help lower the cost of the energy transition – and allow smart charging to shine.


A version of this article originally appeared on EnergyMonitor.

Revitalising EU-Ukraine cross-border infrastructure for a secure, clean energy future

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The Russian invasion of Ukraine is having a significant impact on the Ukrainian power sector. In recent years, the sector had started moving towards greater integration with the European Union and was making inroads into the shift to renewable energy sources.

The current situation is very challenging; not only is it slowing the nation’s energy transition, but it is also disrupting past achievements. Burgeoning renewable energy sources are being curtailed or shut down at unprecedented rates. This downturn results from the destructive effects of the war, coupled with inflexible generation sources.

One way to rectify this imbalance would be to maximise the current potential for interconnectivity between Ukraine and the EU. This, in turn, would allow the country to work towards three goals simultaneously. The increases in commercial energy flows can contribute to: increasing energy security, providing funds for continuing operation and reconstruction, and allowing for greater integration of renewables, thus achieving decarbonisation objectives faster.

While there are technical and legal requirements which must be fulfilled in order to expand Ukraine’s connectivity with the EU, decision-makers can maximise the value of the process by:

  • Implementing transparent, market-based instruments for cross-border capacity allocation.
  • Ensuring solutions benefit all customers and do not only serve individual vested interests.
  • Laying out a roadmap for long-term structural reform of the Ukrainian energy system. Ideally, it focuses on ensuring energy security and advancing European and Ukrainian decarbonisation goals.

The joy of flex: Embracing household demand-side flexibility as a power system resource for Europe

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To meet its 2050 climate goals, Europe will need to purge its power sector of carbon emissions by the mid-2030s. This means integrating renewable energy resources such as wind and solar at an unprecedented scale and pace. Only one path allows for rapid decarbonisation while maintaining a reliable energy system, minimising system costs and increasing energy democracy. We must ensure that customers have the incentives and tools they need to adjust the flexible portion of their electricity use in ways that are beneficial for the system.

Flexible resources are essential to balance supply and demand and make best use of renewable generation.

In addition to climate impacts, the most recent energy price crisis has underscored the urgent need to release Europe from gas dependency — and therefore from exposure to gas price volatility — by progressing swiftly to a clean, efficient and electrified energy system.

This paper focuses on the greatest untapped source of flexible demand across Europe: household flexibility. Households can increasingly shift how and when they use electricity, without compromising utility or comfort, thanks to new digital technologies and storage. Yet, as the users with the lowest individual electricity use, they often face the greatest barriers. If enabled effectively, through inclusive access to flexible assets, markets and retail offers, there is an opportunity to improve energy services and reduce costs, which is particularly important for low-income and vulnerable households.

For household demand-side flexibility to take its rightful place in the energy transition, swift and concurrent effort is needed on multiple levels of policy and regulation. Underpinning this process is the principle that demand-side flexibility is more than an individual customer right; it’s a vital, cost-effective power system resource that should be valued as such.

Europe needs a cohesive regulatory strategy to create the infrastructure that will enable large-scale, aggregated customer flexibility. As a starting point, this paper presents a five-point action plan for scaling up household flexibility in Europe, with specific recommendations for carrying out each action.

  • Action 1: Create robust tools for measuring and valuing customer flexibility.
  • Action 2: Incentivise flexibility through energy market price signals.
  • Action 3: Ensure a level playing field for demand-side resources.
  • Action 4: Accelerate installation of flexible assets in homes.
  • Action 5: Make flexible actions easy and safe for customers.

By investing now in strategies that wholeheartedly embrace household demand-side flexibility as a power system resource, Europe can avoid paying a much higher price later.