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UK needs to cut emissions by 78% by 2035 to meet net-zero

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Under the original Climate Change Act, the UK pledged to cut net emissions by 80% by 2050. Now, it will need to deliver a 78% reduction by 2035 if it is to meet its long-term net-zero commitment. That is according to the Climate Change Committee (CCC), which has published its Sixth Carbon Budget for the period between 2033 and 2037.

The CCC described the budget as the toughest yet with chief executive Chris Stark saying that the UK will need to decarbonise at a faster pace in the next 30 years if the net-zero target is to be met. Stark explained that the Committee has deliberately opted to ‘front-load’ decarbonisation – more will need to happen in the 2020s and the earlier half of the Sixth Carbon Budget period than in the latter half and the 2040s. Heat, and the broader decarbonisation of buildings, is one of the major priorities identified by the CCC which has based its calculations on a scenario in which 40% of the emissions reductions needed will be delivered using pure-technology solutions.

The new recommendations will see heat supply drastically transformed from its current reliance on natural gas if the country is to decarbonise all aspects of the UK’s infrastructure and economy. The budget has set a mandate for fossil fuel boiler installations to end across the UK entirely from 2033, with fossil fuels phased-out from heating in public buildings by 2025 and in commercial buildings by the following year. It added that these stricter targets to phase out higher-carbon technologies in public buildings would also support a government aim of realising a 50% reduction in emissions by 2032. The 2033 date has been set to take account of the typical 15-year turnover of boiler stock, while also allowing for the scaling-up of supply chains to deploy heat pumps at a mass scale.

The recommendations aim for 37 per cent of public and commercial heat demand to be met by lower-carbon sources as of 2030.  According to the CCC, heat pumps should cater for 65% of the predicted need, 32% of heat should be provided by district heating systems, whether low or high-temperature supply, with a further 3% from biomass by the end of the current decade. By 2050, CCC estimates that 52% of heat demand should be met by heat pumps, 42% from district heat, with hydrogen boilers covering the remaining 5% of national demand.

One caveat, however, was that since the dates operate alongside the deployment of low-carbon heat networks and planned regional rollouts of hydrogen conversion of the gas grid, the phase-out outlined may not apply in any areas designated for these alternatives. This makes a nod to a net-zero that derives balance between pure hydrogen systems and electrification, both delivering decarbonisation of heating. It also highlights the danger of supporting one technology and ignoring another when the pace of development is so much steeper and will continue to be so as we move towards 2050. To this end, the CCC is using what it describes as a ‘balanced pathway’ scenario upon which to base its calculations and that its delivery will require ‘systems change’ and a ‘whole economy approach’ to decisively meet the UK’s legal target of fully eliminating and offsetting carbon emissions by 2050.  Under this ‘decisive’ decarbonisation plan, the CCC has warned that a sizable majority of change must be made within 15 years.

Talk to Adveco about how we can help you create more sustainable heating and hot water applications for your buildings.

Funding Retrofit For Public Buildings.

Funding Retrofit For Public Buildings

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The Government’s Public Sector Decarbonisation Fund is a £1b fund being made available now for the upgrade of public buildings and social housing to make them more energy-efficient and environmentally friendly. Projects with a focus on decarbonisation of heating and hot water will undoubtedly be a priority when granting funds as, according to 2019 figures issued by the Department for Business, Energy and Industrial Strategy (BEIS), heating, cooling, ventilating, and providing hot water and lighting for the built environment still generates 17% of greenhouse gas in the UK.

Part of a wider £3b plan to upgrade the UK’s buildings, the plan has been generally welcomed, as it is hoped to support up to 120,000 jobs across the construction sector, as well as boosting local investment through local job creation.

Designed to aid public sector organisations in England, including central government departments, agencies, local authorities, and especially schools and NHS Trusts. The plan’s intention is to improve buildings’ operational performance, reduce CO2 emissions, raise comfort levels for staff, plus reduce in building-related complaints and maintenance backlogs. This is to be achieved through the specification and installation of energy-efficient and low carbon heating measures.

However, the fund is only being made available for a single year, and since its announcement in July, has raised queries over whether government departments and local authorities have the time or resource to spend this effectively. Facility and energy managers responsible for public sector real estate should already be exploring their options for project design and delivery, not least because of the wider concerns over project timescales in the wake of Covid-19. It is, therefore, crucial to be scoping out retrofit projects as soon as possible.

At Adveco, we have almost 50 years’ experience supporting the refurbishment of public sector heating and hot water systems. While studies show that over the next two decades renewable energy sources (RES) – a mix of district heating, heat pumps, wind and solar energy – will be crucial to the energy supply in the heating market, we would lean towards more technology-open scenarios that not only predict large proportions of heat pumps but also assume the use of gaseous fuels. Just as electricity is becoming greener so too can the gaseous fuels which will contain larger shares of renewable ‘green’ hydrogen gas and other synthetic fuels by 2050. This supports the adoption of a hybrid approach that combines new and existing technologies, which we not only see as more practical but is both cost-effective and less influenced by the volatility of a RES electricity-only approach. The hybrid approach is especially valid when it comes to refurbishing old and inefficient systems, as well as extending viable systems where fresh demands outpace the original scope of the application.

From the latest high-efficiency, ultra-low emission condensing gas and water heaters to electric appliances, sustainable solar thermal and air source heat pumps, Adveco is deliberately positioned can support the introduction and integration of the latest technology. Typically, the latest generation of appliance not only is more efficient, but it can also offer a far more compact footprint, so makes refurbishment simpler, and without needing extensive building work to accommodate plant require less capital expenditure. If systems require scaling up to meet increased demands for heating and domestic hot water (DHW) then refurbishment can quickly become more complex, and if a hybrid system is employed, greater space may be required for the dual systems, as well as additional controls and pipework. Should the availability of space be an issue Adveco can design and build off-site prefabricated plant rooms that make full advantage of unused space, such as flat roofs, to expand capabilities.

If a hybrid heating system is chosen, it offers great advantages for cost-effective control, for example, a hybrid heat pump/gas boiler system is able to reduce the maximum power consumption of a system by smartly balancing the heat generators for greater efficiencies and lower operational costs whilst guaranteeing high system temperatures to ensure the comfort of those still living or working in the building during refurbishment work. And, by selecting the optimal (ecological) heat generator whenever possible (via an energy management system) it can also be optimised for CO2 emissions. Should the building envelope be renovated, the required heating load decreases and the existing gas boiler can take on less of the annual heating work, and it could eventually be put out of operation.

An extra £50m will fund social housing through a demonstrator project for the Social Housing Decarbonisation Fund (SHDF). This UK-wide demonstrator scheme will see grants supplied to upgrade the energy efficiency of over 2,000 of the worst-performing social homes. Again, Adveco has a long heritage designing and delivering multi-occupancy applications for heating and DHW.

To secure climate-neutral building stock by 2050, public sector facility managers desperately need help to achieve practical and cost-effective sustainability. At Adveco we can help with a full-service application design team who can provide an assessment of your properties’ demands and correctly size an application. We can help recommend the optimum appliances to deliver highly efficient systems that provide the best value in terms of capital and operational expenditure, whilst meeting the need to reduce emissions. Our commissioning service also ensures installation is carried out correctly and the system is safe to operate, which then unlocks long-term manufacturer quality warranty service.

If you haven’t started to scope out your project, or need aid, please contact us today about your project.

The Route to a Green Grid

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Decarbonisation of gas supplies is seen as a necessary step towards meeting the UK’s carbon reduction targets, including the net zero greenhouse gas emissions target by 2050.  A new round of consultation from the Department for Business, Energy and Industrial Strategy (BEIS) has laid out a structural proposal, the Green Gas Support Scheme, to be funded by a Green Gas Levy to increase the proportion of biomethane injection in the grid.

The intent of the consultation is to put in place the necessary mechanism “as soon as is practicable”, with the intent of launching the scheme within the year. The scheme would operate through to the financial year 2025-26, but initially, only support biomethane as this currently is the only green gas commercially produced in the UK. Crucially, the consultation recognises that to further decarbonise the gas grid, there is a need to widen support to other potential green gases in the longer term. This is important as it opens the door to further consultation on the strong potential of hydrogen blending to meet the more widespread demands for an alternative, green gas that can take full advantage of the highly effective infrastructure already in place to deliver gas to properties, both commercial and domestic, throughout the country.

As biomethane is produced from biomass, it is considered renewable and can offer significant carbon savings when compared with natural gas. The Committee on Climate Change (CCC) consider the production of biomethane from waste as a low-regrets option and recommend continued government support.

To date, biomethane has been supported by the Non-Domestic RHI. As funding commitment to new projects ceases in March 2021, the Green Gas Support Scheme is intended to provide new investment for the industry, enabling the development of new production plants in order to encourage an increase in the proportion of green gas in the gas grid. The proposed tariff mechanism should help address the significant ongoing operating costs of plants. Additionally, as the payments are to be directly related to the specific volumes of biomethane injection, it will continue to incentivise ongoing biomethane production after the capital costs are paid off.

A major facet of the current consultation phase is intended to ratify a robust cost control framework to ensure that costs do not rise unexpectedly, damaging the value of any investment in the technology. It is believed that by driving investment into this sector, biomethane production will see an uplift, along with a reduction in production cost as plants are sized optimally based on individual characteristics and feedstock availability.

Looking beyond this scheme, focus must expand to recognise the value and importance of hydrogen in the mid to long term as the defacto choice for green gas delivery at scale. That means actively supporting hydrogen production through the Green Gas Support Scheme, or its successors. Given that blending small proportions into the natural gas supply and deployment within industry would not initially require major infrastructure changes, the use of hydrogen is truly advantageous.

We recognise that hydrogen is expected to play a valuable role in meeting the needs for heating the UK’s commercial buildings but will never be a 100% solution. This is why deployment in combination with heat pumps as part of a ‘hybrid system’ remains the best, and most cost-effective to deploy and operate method for commercial organisations to decarbonise operations and drive a low carbon economy.

Whether the ongoing consultation on green gas and low and high-temperature appliances decides to recognise the importance of ‘hybrids’ with financial support, the simple truth is that for the wide majority of commercial organisations looking to refurbish, capital investment and operational costs for heating and cooling systems are a critical decision factor. Hybrid systems offer the best option now and in the longer term as new Green Gas options come into play. It would, therefore, be greatly advantageous for the Government to recognise and support technologies that advance low carbon adoption now and support retention of existing infrastructure that would prove critical for the deployment of next-generation long term green technology.

Adveco FPi Air Source Heat Pumps.

Clean Heat Grant to Replace the Renewable Heat Incentive

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The Department for Business, Energy and Industrial Strategy (BEIS) has confirmed that the non-domestic Renewable Heat Incentive (RHI) is to close to new applicants on 31 March 2021. This has led to the launch of consultation for the ‘Future support for low carbon heat’ which details the proposals for support mechanisms following the closure of the scheme.

Replacing the RHI’s tariff-based support is the £4,000 Clean Heat Grant set at a flat rate as opposed to scaling with system size or changing across technology types. The intent is to drive businesses to find which technology is the most cost-effective for their property and address the barrier of upfront costs.

BEIS has indicated it believes the majority of applications will be for air-source heat pumps (ASHP). The Government is proposing to support both low and high-temperature units, where installations provide space and water heating in buildings, but not ‘hybrids’ installed alongside a fossil fuel system.

As part of the consultation process, the Government continues to consider the role that gas/electric hybrid systems may play in the longer-term decarbonisation of the gas grid, noting recommendations relating to Hydrogen in a low carbon economy. Under this scenario, widespread deployment of hybrid systems help to retain the long-term value of the gas grid to the energy system, while enabling near-term reductions in carbon emissions.

Adveco can support commercial businesses wishing to design new low carbon systems featuring  ASHPs. The FPi range of ASHP, for example, delivers an easy to install method for commercial sites to achieve lower cost water heating or cooling. With sleek looks and quiet operation, the compact monobloc design is capable of providing domestic hot water (DHW) at up to 55°C, or cool water to -7°C for use in fan coils. The FPi range is able to achieve an above-average coefficient of performance (COP). Ranging up to a very high COP of 4.7, FPi ASHPs can make a real impact on a property’s energy consumption.

The initial response to the announcement has been mixed, especially regarding the lack of extension of the non-domestic RHI and the instigation of a cap on the future grant scheme. More importantly, for many commercial sites, ASHP will not be enough in isolation, so you need to understand the limitations and why combining with other technologies and controls to create a hybrid system is a necessity. The hybrid approach also offers better compatibility with existing DHW distribution systems and the demands of higher thermal requirements, providing the versatility to reduce operational costs while maintaining the higher water temperatures demanded by commercial DHW operations. A hybrid system built around Adveco’s FPi can help businesses meet their carbon targets in the coming decade while keeping running costs low and should not, it is hoped, be summarily dismissed from the Clean Heat Grant. Exclusion could have a damaging effect on the decision by commercial properties to refurbish systems to be more environmentally friendly if costs become prohibitive without financial support from the Government.

BEIS will retain the right to review the grant levels in response to market changes or “if uptake falls substantially outside the expected range”. Funding for the Clean Heat Grant has been committed for two years to March 2024, after which the scheme will close to new applications.

The Clean Heat Grant consultation closes on 7 July 2020. Read the latest on the consultation process.

Solar collector panels.

Solar Thermal – Proven Route to Sustainability

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A.O. Smith Solar Thermal SGS system

The A.O. Smith Solar Thermal SGS system

Solar thermal represents a vital component for addressing sustainability within commercial organisations. Obviously, solar thermal systems are most productive in the summer months, when there is most sunlight, so this does result in the additional need for non-renewable energy sources during the winter months. Despite this, sustainability is more than achievable, and Adveco will design applications and package the appropriate technology. The A.O. Smith SGS solar water heater with IT storage vessel is a perfect example of a sustainable application. The intelligent solar control of the system ensures maximum efficiency. Even with little solar input, the required hot water temperature is guaranteed by the gas burner operating as a back-up system.

SGS System in situ on North Cumbria Police Headquarters’ award-winning ‘green roof’.

SGS System in situ on North Cumbria Police Headquarters’ award-winning ‘green roof’.

An example of this application in practice is the North Cumbria Police Headquarters’ award-winning ‘green roof’. The building incorporates an A.O. Smith SGS 60-ITE 750 solar system. The solar heat input collected by the 2×5 solar collectors (on-roof-frame construction) is transferred to the available hot water supplies via the ITE 750 which is controlled together with the collectors by the SGS 60. With the use of a single system controller the SGS 60 only fires its high efficiency condensing gas burner when hot water demand outstrips the available stored and solar heat input.

When Stockport Metropolitan Borough Council’s Ponsonby Building was refurbished into a stylish working environment for more than 450 staff, 12 solar collectors were installed on the outside wall feeding an A.O. Smith ITS 1000 to meet the hot water demand. The ITS, an indirect tank, is fitted with two coils. In solar configuration, the upper coil is connected to the primary circuit (boiler) whilst the lower coil is connected to the solar circuit. The top coil after-heats the water if the solar contribution is insufficient. The lower coil transfers the solar contribution which is collected by the solar collectors.

If a solar thermal application is designed to leverage the Government’s non-domestic Renewable Heat Incentive (RHI), this adds a new revenue stream that helps to increase return on investment and reduce the payback period.

Designed to provide financial incentives to increase the uptake of renewable heat by businesses, the public sector and non-profit organisations, the Government has spent £550m to date on non-domestic RHI to reduce carbon emissions. RHI is currently applicable to solar thermal for commercial uses including large and small businesses, plus schools and hospitals. Administrated by Ofgem on behalf of the Department of Energy and Climate Change (DECC), tier one of the RHI incentivises non-domestic energy producers for either the life of the installation or 20 years as a maximum. If conditions are met, with equipment, including a generation meter, being installed by a microgeneration certification scheme (MCS) accredited installer, eligible businesses in England, Scotland and Wales will continue to be paid for installations completed and commissioned before 2021. After 31 March 2021 new installations may not receive any form of subsidy.

Successful systems will them receive quarterly payments per kilowatt hour (kWth) of energy use, however, if your system is metered as a multiple system, which includes both solar thermal and a gas boiler, then payment is made purely for the heat generated by the solar thermal aspect of the application.

Changes to, or a replacement for, the scheme after March next year are currently to be finalised, but whilst the expectation is that solar thermal will play a role in the long-term decarbonisation of heating in the UK, the technology is not deemed a stand-alone solution for phasing out fossil fuels within buildings. As such, the current Government’s stance under the incoming Green Heat Grant is that the technology will not be supported under the new policy mechanism.

The current 2020 tier 1 (non-domestic) tariff for new solar thermal collectors less than 200kWth in size is 10.98(p/kWh)*.

No single technology currently provides the ‘magic bullet’ of sustainability, but for organisations with long-term vision and a willingness to invest in sustainability, solar thermal when correctly sized, commissioned and protected from overheat, is a proven and practical technology for securing on-premise DHW. When delivered in conjunction with other technologies, including high-efficiency gas and electric heaters, micro-CHP and ASHP, you can future-proof a hot water system whilst making substantial savings in operational costs and dramatically reducing emissions all year round.

*For more information on non-domestic RHI and the full conditions of eligibility, refer to the energy regulator Ofgem.

Read more about Solar Thermal from Adveco

SECR Streamline Energy and Carbon Reporting

New Environmental Reporting and Taxation Framework Still a SECRet to Most UK Businesses

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Conceived to reduce administrative burdens, raise awareness of energy efficiency, reduce bills, and save carbon, the Streamline Energy & Carbon Reporting (SECR) is a new, mandatory reporting regime that will replace Carbon Reduction Commitment (CRC) and greenhouse gas (GHG) reports. As a public document, SECR will show what companies are, or are not doing, to reduce their emissions. Any failure to address the rising cost of fuel through reduced use will be clear to see. The report will also show how companies are reacting to the risk of climate change, so there will, for the first time be an additional reputational risk if any organisation fails to reduce its emissions to counter climate change.    

Does SECR apply to your business?

A large number of companies and Limited Liability Partnerships (LLPs) will be required to report as part of SECR. The framework is mandatory for ‘large’ companies (under the Companies Act 2006) that meet two of three set benchmarks:

  • More than 250 employees
  • More than £36 million in annual turnover
  • An annual balance sheet larger than £18 million

SECR would extend the number of companies that report information in annual reports from ~1,200 to ~11,900, similar to the Energy Savings Opportunity Scheme (ESOS) organisational reporting. This is also a climb from the ~4,000 companies currently required to comply with CRC regulations.

The suggested vehicle for reporting is company accounts and a UK-wide approach is in line with other existing initiatives such as ESOS and mandatory GHG reporting.

Organisational reporting will be similar to ESOS in that:

UK subsidiaries, that qualify for SECR in their own right, will not be required to report where they are covered by a parent’s group report, although they may report individually on a voluntary basis.

Companies that are not registered in the UK (non-UK incorporated) are not obliged to file annual reports at Companies House, and will, therefore, fall outside the scope of the mandatory SECR framework.

However, where a parent company is not registered in the UK, but has subsidiaries that are registered in the UK, these subsidiaries, if qualifying for SECR in their own right, would need to report.

It has already been announced that to compensate for the removal of approximately£790m in annual CRC tax revenues the Climate Change Levy (CCL) has been noted for increase in 2019.  SECR legislation has passed through Parliament into law and the mandatory report will be linked to taxations with the new the tax rates already set out:

Taxable commodity  Rate From
1 April 2018  		 Rate From 1
April  2019 		 Change
Electricity (£ per
kilowatt hour (kWh))		 0.00583   0.00847 +45.28%
Natural gas (£ per kWh) 0.00203   0.00339   +67.00%
LPG (£ per kilogram) (kg) 0.01304 0.02175 +66.79%
Any other taxable
commodity (£ per Kg)		 0.01591 0.02653 +66.75%

Climate Change levy Rates 2018-2019

Who is exempt?

  • De-minimis threshold of 40,000 kWh, for companies using low levels of energy to be exempt from reporting, similar to ESOS (this equates to approximately 500organisations).
  • Unquoted companies where it would not be practical to obtain some or all of the SECR information.
  • Disclosure of information which the Directors think would be seriously prejudicial to the interests of the company.
  • There is no exemption for energy used in other schemes – e.g. Climate Change Agreements(CCA) / EU-Emissions Trading Scheme (ETS).
  • There is no exemption for Limited Liability Partnerships (LLPs), as they are required to report under SECR through an equivalent to a directors’ report (this equates to approximately 230 large LLPs).
  • Public sector organisations are currently exempt, but there is an expectation that they will adopt SECR as a standardised environmental planning and reporting tool.

UK quoted companies registered in the UK will be required to: 

  • Where practical, disclose Scope 1 & 2 emissions according to the GHG methodology (Scope 3 will remain voluntary). Electricity, gas and transport will as a minimum require reporting and an intensity metric is required in their annual reports which, where practical, will also report on global energy use.
  • Provide a narrative commentary on energy efficiency action taken in the financial year, though they won’t be required to specifically disclose ESOS recommendations and how they have been taken forward (although they can do so). This will apply to both quoted, large unquoted companies, and large LLPs. The idea behind disclosing annual energy efficiency actions is to incentivise action outside the four-yearly ESOS cycle.
  • Having completed the report it will need to be audited to a standard that meets the requirements of the Financial Reporting Council (FRC) and be signed off by the Board. For private companies the report must be registered with Companies House.

Organisations will report under the CRC for the last time at the end of July 2019 and surrender allowances for emissions from energy supplied in the 2018-19compliance year by the end of October 2019. The new tax will be collected as part of the Climate Change Levy payments by an organisation’s supplier.