The future of heating in the UK: heat pumps or hydrogen?

Changing how we heat our homes is more complicated than it sounds. Currently, the two frontrunners are electric heat pumps and hydrogen, with each offering potential benefits and challenges.

For example, ‘blue’ hydrogen, which is commonly produced from natural gas, cannot play a significant role without a greater roll out of carbon capture, utilisation and storage (CCUS) infrastructure, and the availability of affordable ‘green’ hydrogen is still some way off. Heat pumps, on the other hand, involve an upfront cost, which means many people may need financial support to make the switch, but they are much more efficient than traditional gas boilers.

In December 2020, the Climate Change Committee (CCC) recommended a scale up of both low carbon electricity and low carbon hydrogen on the pathway to net zero emissions, however. Let’s consider the scale of development of each technology so far.

Electric heat pumps are already a proven low carbon technology that can be installed in any property type. They have been promoted by both government and the CCC as a viable low carbon heating system.

The Prime Minister’s Ten Point Plan sets out an ambition to install 600,000 heat pumps per year by 2028, and the Scottish Government is targeting a peak of 250,000 renewable heat installations a year in the 2030s, of which the majority are likely to be heat pumps. The CCC has suggested that 3.3 million heat pumps need to be installed in existing homes by 2030, rising to eight million by 2035 to reach net zero targets. This equates to one million installs per year in new and existing homes by 2030, which suggests that the level of ambition will need to increase.

Scaling up the heat pump sector is vital for achieving net zero – and presents both a challenge and an opportunity. There are more than four million homes in England now using oil, coal, LPG and less efficient electric heating that would benefit from being retrofitted with low carbon heat pumps as a first priority.

Under current plans, gas and oil boilers will be banned from newbuild homes from 2025. All homes built after this date must be zero-carbon ready, which means heating must come from low carbon sources like heat pumps.

However, currently less than a quarter of a million of the UK’s 29 million homes have heat pumps. In 2019, 27,000 were installed – compared to the 100,000 additional homes connected to the gas network and the 1.7 million replacement boilers installed. This means that heat pumps account for less than 2% of the market in the UK.

This low uptake is disappointing, especially when we look at deployment in other parts of Europe. In Norway for example, over one third of households have heat pumps and they account for 95% of new heating.

While heat pumps were identified early as a key technology to enable the transition to low carbon heating, issues with installation costs and practicalities have since emerged. A lack of familiarity with the technology is another barrier, but one that can be addressed by providing people with good information about the benefits of heat pumps.

At Energy Saving Trust, we offer advice and support to encourage the uptake of heat pumps, including information on potential cost and carbon savings. Homeowners are less likely to invest in an unfamiliar technology unless they can get expert, impartial advice on how to make it cost effective for them – something that Energy Saving Trust can offer.

For many homeowners, the expense of a heat pump is significant; better incentives to install the technology, such as grants to help with the upfront expense or low-cost financing, will be essential to increase uptake. The Scottish Government-funded Home Energy Scotland Loan offers up to £10,000 (£2,500 loan plus up to £7,500 cashback) to help cover the upfront cost of installing a heat pump in Scotland, however there is no equivalent funding scheme currently available in the rest of the UK.

In his Ten Point Plan, Prime Minister Boris Johnson listed ‘driving the growth of low carbon hydrogen’ at number two. Working with industry, the government is aiming to develop 5GW of low carbon hydrogen production capacity by 2030, enough to power around 1.5 million homes. Driving this growth could reap significant benefits – the UK Government estimates hydrogen could deliver a 9% cut in overall carbon emissions by 2032, based on 2018 levels.

The CCC suggests that hydrogen will add value in areas less suited to electrification and will be vital in providing flexibility to deal with intermittency caused by renewable generation in the power system. The main role for hydrogen, however, appears to be in areas like shipping and hard-to-decarbonise parts of industry. Low carbon gas (hydrogen and biomethane) could potentially meet just 13% of overall domestic heat demand, though it may also add value in ‘topping up’ heat in homes where the main heating system is a heat pump. Up to five million homes could have hybrid systems that use both a heat pump and a hydrogen or biomethane boiler – with low carbon gas meeting just 20% of heating demand in these houses.

There may be additional niche uses for hydrogen too. In regions where ‘green’ hydrogen produced by abundant renewable electricity could be used as a form of energy storage, it may be more practical to heat homes from this source. For example, hydrogen could be used for residential heating in low population areas located near to hydrogen production facilities, if electrification of these homes is difficult.

There are several pilot hydrogen heating schemes in development around the UK. In the north east of England, two homes are being built with household appliances fuelled entirely by hydrogen. The houses in Low Thornley, Gateshead, will use 100% hydrogen for domestic heating and cooking in appliances to highlight the potential of hydrogen as a low carbon replacement to natural gas.

Unlike natural gas, which was responsible for 54% of carbon dioxide emissions from fossil fuels in the UK in 2019, hydrogen produces no carbon at the point of use. In some respects, switching from natural gas to hydrogen could be relatively straightforward for households – existing boilers would need to be replaced with hydrogen equivalents, but much of the supply infrastructure is already in place (although it may need investment to be ‘hydrogen ready’). However, as yet there is no blueprint for a conversion of the gas grid to hydrogen anywhere in the world.

Producing hydrogen at the scale required to decarbonise heating will not be easy. And there are two further challenges: although costs are expected to fall in the future, it is currently expensive to produce and, as mentioned, most of the hydrogen produced right now is not low carbon.

Hydrogen produced from natural gas contains no carbon itself, but carbon is given off in the process. That carbon must be captured and stored indefinitely – with the end product known as ‘blue’ hydrogen – for use as a low carbon gas. Producing enough ‘blue’ hydrogen to help decarbonise the UK’s heating system will only be possible with significant scaling up of CCUS infrastructure.

It is also possible to produce low carbon ‘green’ hydrogen through a process called electrolysis, using renewable electricity to extract hydrogen from water. However, the CCC has warned that the UK would need 30 times as much offshore wind farm capacity to produce enough ‘green’ hydrogen to replace all existing natural gas boilers.

The government is expected to publish two strategies in 2021 that will be critical in changing the way we heat our homes and buildings. The Heat and Buildings Strategy is expected to deliver clear signals to homeowners and industry on how domestic heating will need to transition to align with the UK’s net zero goals. The Hydrogen Strategy will need to set out a vision for hydrogen’s role in meeting net zero, as well as the actions and incentives required to develop supply.

Policymakers will need to make key decisions in the next decade about the future of heating in the UK and set out a detailed roadmap to net zero. This will likely impact the balance between electrification (for heat pumps) and low carbon gas in decarbonising heating, and the resulting implications for both the electricity grid and gas networks.

The fact of the matter is that we do not have to make a binary choice of heat pumps or hydrogen – we will need both to get to net zero. Hydrogen has the potential to replace fossil fuels in areas where electrification may not be feasible or cost-effective. However, realistically until the UK has affordable and abundant ‘green’ hydrogen or reliable CCUS infrastructure, its role in heating our homes will be limited. We need to take action to decarbonise now. So as the UK’s electricity grid becomes greener – and with the government’s own ambition to install 600,000 heat pumps a year by 2028 – we expect heat pumps to lead the way in transitioning to net zero heating by 2050.