It’s time to turn up the heat on the UK’s low carbon transition
ETI Smart Systems and Heat programme manager, Rebecca Sweeney explains why the adoption of alternative domestic heating requires the UK to rethink its consumer proposition to deliver low carbon solutions that people really want.
Meeting the UK’s overall climate targets could be hampered if the heat sector fails to speed up its transition to an effective, low carbon proposition.
To tackle climate change in the UK, we need to effectively eliminate the 20 percent of carbon emissions that come from how we use heat in the home. The sector is faced with just a few years to prepare for a low carbon transition before rapid implementation is required from around 2025 onwards.
We know that decarbonising domestic heat is complex, with a number of systems needing to be integrated in order to provide a solution. However, it remains one of the most cost-effective ways to tackle emissions reduction in the UK. The challenge is how we replace natural gas-based heating in its present form, and how we engage with consumers so that they are willing to adopt an alternative heating system for their home. To tackle this, energy systems planning will need to not only answer how low carbon heat provision is resource and infrastructure driven, but also how it can deliver consumer value. A new low carbon energy system will require innovative thinking about the relationship between the system itself and the people who use it.
Earlier this year in conjunction with the Energy Systems Catapult, the ETI produced a report that highlighted ways in which the industry could make low carbon heat a more appealing option in the future. We found that consumers care more about the experience of using heat rather than how it is delivered and were better able to understand the value that heat is adding to their lives, for example enjoying a hot shower, standing next to a radiator after being outside in the cold or using heat to relieve pain. This research helped us to understand that it is possible to rethink how the heating experience could be presented to consumers, to make it a more valued service.
The research also showed that heating in the home was in fact, an important experience for the people involved but that this experience does not easily overlay with the current approach of simply buying units of energy from a supplier. This is important because, consumers as passive bill-payers understand very little about the cost of heating their home. It is likely that the average consumer won’t know what kWh really means in terms of the heating experience. This is where there is an opportunity for energy providers to create a packaged service that that people really want to pay for, instead of simply setting a unit price on consumption.
As connected home technology becomes more advanced, the energy industry could start to link the heat experience with their provision of energy. Our research has shown that communicating information to consumers in this way has the potential to convert passive bill-payers into discerning customers who can agree a level of service with their provider, and this in turn paves the way for the introduction of low carbon technologies to provide that service.
So how can this switch to low carbon technologies be achieved? Connected home data can create new opportunities for providers to offer consumers a new customer proposition that is based on heat experiences rather than the commodity price of energy. Businesses could offer varying service packages to the consumer based on how they are using heat in their homes, for example identifying how many rooms require heating or at what times of the day does the home need to be at a certain temperature. With this type of service proposition, consumers could potentially buy warm hours, rather than kWh, a needs-based concept that they are more likely to understand. By using such data from a connected home, homeowners and tenants could not only then take control of their heating remotely, but they could also see real-time data on where their money is spent meaning they would have a real understanding on how much it costs to heat the home to help them make informed personal judgements.
It is here that providers have an opportunity to make the low-carbon energy offering more attractive. Providers could begin to offer alternatives like electrifying heat in individual homes or improving the fabric efficiencies of homes. There could be opportunities for wider-scale change; connecting neighbourhoods to new district heat networks or repurposing the natural gas grid to transport other fuels such as hydrogen or biogas, which are more low carbon in their nature.
For this concept to become a reality however, the shift will need to be supported by regulation. Policy-makers have an opportunity to use this data and research to help create market environments where consumers pay businesses to deliver energy experiences. This will mean service providers could start to compete with one another, turning the dial up on heat decarbonisation to help meet the UK’s climate change targets in 2050 and has the potential to be a possible measure to look into the issues of fuel poverty.