We stand at a pivotal moment for the future of energy in the UK. The government’s recent decision to remove the Winter Fuel Payment for pensioners presents a difficult winter for many, highlighting the urgent need to rethink how we can protect the most vulnerable in our society while advancing towards a more sustainable future for energy.
The Case for Electrifying Heat
The answer lies in electrifying heat — creating parity for low-carbon heating solutions and making them accessible and affordable for all. Currently, the cost of electricity in the UK is among the highest in Europe, which makes it challenging for families to transition to renewable heating. Making electricity more affordable would accelerate the adoption of low-carbon technologies, such as heat pumps and heat batteries, reducing reliance on fluctuating gas and oil prices.
Lowering electricity costs would not only alleviate the financial burden on households but also align with the government’s long-term decarbonisation goals by driving down the costs of renewable energy.
Rethinking How We Fund Our Energy Transition
To make this vision a reality, we need to rethink how we fund our energy transition. One immediate step is to remove the Green Levy from electricity bills. These levies, originally designed to support subsidies for renewable electricity generators and energy efficiency schemes, have the unintended consequence of disproportionately increasing costs for lower-income households.
In addition, our electricity grid requires highly efficient technologies, like heat pumps, as well as highly flexible technologies, like heat batteries, to operate on 100% renewable electricity. To facilitate this, VAT relief and subsidies should be extended to low-carbon heating technologies, such as heat batteries. This would help create cost parity between low-carbon and traditional heating systems, making the former a viable option for all — not just a privileged few.
The Role of Heat Batteries in Decarbonising Home Heating
Lord Callanan, Vice Chair of the Net Zero APPG and former Parliamentary Under Secretary of State at the Department for Energy Security and Net Zero, recently emphasised the vital role that heat batteries can play in decarbonising home heating, particularly in smaller properties where space is limited.
He stated:
“It is vital the new Government takes advantage of a mix of low-carbon technologies to help decarbonise our homes. Heat batteries will provide much-needed flexibility and choice for consumers, reducing demand on the grid at peak times, whilst also helping reduce bills and carbon emissions.”
A recent webinar featuring experts from across the energy sector echoed the same sentiment. Tom Lowe, Founding Director of Thermal Storage UK, called for “immediate action on the electrification of heat”, while Jack McKellar, Innovation Programme Delivery Manager at UK Power Networks, highlighted “the importance of heat batteries to heat homes and help load shifting to minimise grid impact.”
At tepeo, we’ve seen this potential firsthand. In the Neat Heat Trial, a collaborative effort with OVO and UKPN, we installed our ZEB, which uses heat battery technology, into homes across the UK. After the 18-month trial, 100% of participants chose to keep their ZEB, citing equivalent comfort levels but with cheaper running costs. This clearly demonstrates a strong demand for innovative solutions like heat batteries, which save money, cut carbon emissions, and help balance the grid. However, to reach their full potential, these technologies need to be made affordable and treated equally under VAT and subsidies, like heat pumps.
Electrification of Heat: A Social and Environmental Imperative
The electrification of heat is not just an environmental necessity; it is a social imperative. By reducing electricity prices, removing green levies, and providing targeted subsidies, we can create a fairer and more sustainable energy system for everyone.
We urge the government to take two critical steps:
Reform Green Levies: Start by consulting on changes to the green levies framework, a step that is already in the pipeline. Reforming this framework will help address the current policy and regulatory barriers that prevent low-carbon technologies from reaching their full potential.
Embrace Domestic Energy Flexibility: Support a renewable electricity system by fostering domestic energy flexibility, especially given the government’s ambitious new target for clean electricity by 2030. This means supporting all technologies that can contribute to a greener future and removing barriers that stifle innovation.
Now is the time for the government to act decisively, consult widely, and implement the necessary changes to bring about a just energy transition.
Johan du Plessis, CEO, tepeo Ltd