Heat decarbonisation is likely to be one of the most challenging areas in delivering on net zero and will require the engagement and general consent of up to 29 million households. Given this need for public consent, we feel that it is vital that policy in this area is perceived as being fair, proportionate and as incentivising appropriate action.
Whilst the proposals will have a limited impact on households as they currently stand, the consultation document suggests that the scheme will be expanded both in scale and to other low-carbon gases such as hydrogen. If a levy-based approach were used to expand the scheme significantly (for example, to the regulatory level of 20% of grid gas supplies), then there would be a corresponding impact on fuel poverty if this were pursued without parallel action to improve the housing stock.
Whilst we appreciate the desire to reduce administrative complexity, the scheme’s flat rate, per meter charge does not incentivise appropriate action to reduce consumption. There is also a risk that it could undermine public confidence in the wider net zero ambition, if interpreted by the public as a sign of how future costs will be distributed.
We have set out some overall comments under the headings of i) proportionate, ii) fair and iii) incentivising action and then responded to relevant questions below this.