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Mission Zero – A Review of Net Zero Policy

Mission Zero is an official response to the November 2020 announcement by then Prime Minister Boris Johnson of a wide-ranging plan with ten key deliverables to drive what he described as “Our green industrial revolution”. This lay the groundwork for the government’s Net Zero programme to fully decarbonise the economy by 2050 and in 2021 the  Heat and Building Strategy. The plan has received criticism, not least for the lack of financial support, with major failings highlighted in subsequent independent reviews.

Now, we have the official government-commissioned review, Mission Zero is a 340-page report chaired by Conservative MP Chris Skidmore. As with previous net zero documentation, the government and review focus is skewed toward the domestic, with much focus on the decarbonisation of homes. From the get-go, we have argued that if buildings – which are responsible for as much as 40% of UK carbon emissions – are to be successfully decarbonised there needs to be a holistic approach that evenly tackles energy demand in domestic, commercial and industrial properties. Unfortunately, the review follows the line of thinking laid out in the original documentation, so is a missed opportunity.

Next Generation Energy Supply

In terms of tackling the big issue of energy supplies, the Mission Zero review calls for the introduction of a “cross-sectoral infrastructure strategy” that will focus on building and adapting energy supplies and systems to look at improving the low-carbon production of electricity, hydrogen and other liquid and gaseous fuels. This is at least an admission that more needs to be done to address the sustainability of national energy supplies. The removal of coal-fired power stations has cleansed much of the grid electricity supply, and the addition of solar and offshore wind has meant carbon budgets have so far been achieved. This grid is less ‘dirty’ and our electric carbon footprint is on par and will soon fall below that of natural gas. Electricity still has its issues, not least the cost, which is why clear direction on the production of hydrogen and other gaseous fuels, which are seen as potentially quick and cheaper to roll out through the gas grid, is so vital for meeting future energy and heating needs, especially for heavy industry and commercial properties with high energy demands, as seen in hot water generation.

The government is to make a decision by 2026 on whether the gas should be considered as part of national heat decarbonisation plans, again this focus is domestic, but early reports suggest that hydrogen is best suited to more industrial needs, at least initially. The review does call for the government to update its analysis by the end of 2023, “Of the whole system costs of the mass roll-out of hydrogen for heating, in order to ensure that the case for economic optimality and feasibility still holds.” That said, it is perhaps telling that the review which focuses so heavily on the domestic fails to mention the development of hydrogen boilers for the UK market, although it does call for hydrogen heating community trials to continue.

This continues to place focus on an electric-led path to decarbonisation, with warnings that desired rollout of heat pumps risks being undermined without investment in grid infrastructure. As such, the review urges the government and regulator Ofgem to make sure plans are in place for the longer-term secure investment in the electricity grid to deliver sufficient capacity of cheaper, low-carbon sources of energy.

The comparable costs of wholesale gas and electricity remain problematic, with the latter on average still costing 3.8 times that of gas, creating clear running cost issues for those considering moving over from gas to direct electricity as a source for heating. The review rightly exerts pressure on the government to honour previous commitments to review the existing levies on electricity as they “adversely incentivise the use of gas”. Levying policy costs and taxes on electricity bills keeps the price of electricity artificially high, which counters the message to adopt low-carbon technologies. Of course, the application of renewables in the form of heat pumps and solar thermal can greatly reduce the need for expensive direct electric water heating. Using the technology to preheat water helps offset potentially crippling running costs. But it is worth remembering that the high temperatures required for domestic hot water (DHW) reduce the efficiency of heat pumps. The cited coefficient of performance (COP) of 4 in the review for heat pumps and their stated subsequent greater efficiency than gas alternatives has to be questioned. Operating at optimum ambient conditions and in a low-temperature space heating mode such efficiency is attainable, but it is not ‘real world’, and should a system be tasked with supplying heat and hot water combined, as most domestic boilers are required to do, you are not going to achieve that level of COP. That will require more electrical energy to be input, with consequential rises in running costs. For commercial scale systems this is further exacerbated as minimum working temperatures need to reach 60°C for safe operation, heat pumps will therefore be pushed as hard as they can to deliver preheat working temperatures of 45-50°C in order to reduce carbon. But this comes at a cost so long as electricity prices remain high.

Better then to consider the application of solar thermal, a proven, robust renewable that once installed is essentially free to operate, ensuring a more rapid return on investment. When correctly installed and maintained, solar thermal will offset as much as 30% of the energy demands of a hot water system. This is where more support is required, with a replacement for the Non-Domestic Renewable Heat Incentive Scheme (NDRHI) which closed in March 2021. The review’s focus on heat pumps fails to address this situation, or the widely regarded failure of government-funded installation of heat pumps to jump-start wider adoption either domestically or across small businesses able to apply for support.

An End to Fossil Fuels

The Mission Zero review’s clear aims are to ensure a more rapid and effective strategy to move away from relying on fossil fuels for domestic heat in favour of heat pumps, to the detriment of alternatives and the wider impact of energy use in buildings outside of homes. That reflects the relative speed in which this review was conducted and published, so it is perhaps not surprising that much is skimmed over, whilst other elements feel partisan and certainly not independent.

This is most overtly communicated through the call to introduce a ban on the sale and installation of existing natural gas boilers on the market by 2033 to ensure the widespread adoption of heat pumps. Whilst this makes for good headlines and presents the review as making aggressive recommendations, as we have seen, it makes no mention of ‘hydrogen-blend’ or ‘hydrogen-ready’ appliances which are expected to circumvent such a ban, and account for almost all gas boilers and water heaters currently being sold, let alone ten years from now. On a commercial/industrial scale, high energy users will have to be exempt, simply due to the comparable electrical demands which would be needed for replacement and the punishing operational costs that would come with it. A ban would also effectively lead to the closure of gas-grid connections. The gas grid is both a relatively modern system of national energy deployment and the core, existing storage facility for future hydrogen production. The cost of closing and then reopening gas connections should hydrogen become a major tool in delivering net zero through the 2040s would be immense and counter-productive to the rapid and low-cost rollout imagined.

For commercial organisations seeking insight into the options for attaining net zero, the Mission Zero review unfortunately provides little impetus to generate greater support for the sector at a government level. The continued focus on domestic property is another missed opportunity to address the wider criticisms of how achieving net zero is to be realistically achieved.

If you are actively looking for approaches to introduce or increase the sustainability of your property, as well as controlling operational costs from energy consumption, addressing hot water demands is a good place to start. At Adveco we can provide accurate monitoring, correctly sized applications and provide a wealth of technology options from high-efficiency gas replacement through to heat pumps, solar thermal and electric water heating which can be optimised to your property’s specific daily needs.

The ‘Mission Zero’ review of net zero policy is available here.