The Government has published its response to the consultation on the market-based mechanism for low-carbon heat, according to Energy UK, which said many of the approaches it supported had been adopted1. The response was noted by the industry body in a blog published on 31 May 20221.
The mechanism, as described by Energy UK, will obligate manufacturers of fossil fuel heating appliances to meet a rising target for low-carbon appliance sales1. Energy UK said it was keen to see further commitments from Government on consumer protection, and on setting penalties sufficiently high so as to incentivise delivery1. It also said it had written to the Minister for Business, Energy and Corporate Responsibility to express support for the regulation to be brought forward as soon as possible, in the context of the Energy Company Obligation1.
The same blog recorded that the Government opened the Boiler Upgrade Scheme for voucher applications that week, providing grants to households changing their heating system to an air or ground source heat pump, or biomass boiler1. On the Energy Company Obligation, Energy UK said the latest phase, ECO4, will over four years deliver green home upgrades to an estimated 450,000 households, achieving up to £224.3 million in annual bill savings1. It said delivery at scale over the summer was being made difficult by delays to the regulation being laid in Parliament1.
Energy UK set out the scale of gas dependence in UK heating:
"In the UK, we are very dependent on gas for our heating, as it is used in approximately 85% of homes."
The blog was written by Siobhan Kenny, Interim COO at Energy UK1. It also referred to international wholesale gas prices, compounded by the Russian invasion of Ukraine, resulting in a cost of living crisis, and to the Chancellor announcing an enhanced package of support for customers the previous day1. It described that statement as a missed opportunity on energy efficiency1.
Why it matters for households
The market-based mechanism works on manufacturers rather than on households directly: it sets a rising sales target for low-carbon appliances, which Energy UK said would help reduce the cost of heat pumps throughout the 2020s when taken together with the Boiler Upgrade Scheme1. For a household weighing up a heating change, the practical effect is on the price and availability of equipment rather than on a direct grant or obligation. The consultation response itself is not reported here in detail; what has been reported is Energy UK's account of it and its call for stronger consumer protection and higher penalties1.
On energy independence, the stated aim is to reduce reliance on gas, which Energy UK said is used in approximately 85% of UK homes1. The Energy Company Obligation route is aimed at vulnerable and low-income households, with the 450,000 household figure and up to £224.3 million in annual bill savings attached to ECO4 over four years1. Energy UK said delays to laying the regulation in Parliament were making delivery at scale difficult over the summer period1.
What happens next
Energy UK said it had written to the Minister for Business, Energy and Corporate Responsibility seeking early introduction of the Energy Company Obligation regulation1. It also said it wanted further Government commitments on consumer protection and on penalties under the market-based mechanism1. No dates for those steps are given in the source.
Sources1 cited
- Home Truths - Energy UK, energy-uk.org.uk