PHAM NEWS | JUNE 2024 Light Commercial Heating 41


Accelerating the energy transition


What needs to change from a policy and legislation perspective to help accelerate the transition to cleaner energy? Jeff House from Baxi discusses the drive to decarbonise commercial and public sector buildings.


T


he UK’s current building stock is responsible for around 30% of total UK greenhouse gas


emissions, of which 18% relates to heating and hot water. With a national target for net-zero emissions enshrined in law, the direction for travel for heating and hot water in buildings is clear. And heat pumps, along with heat networks and hybrid or multivalent heating systems, are one of the favoured technologies to support the move away from fossil fuels to cleaner, low-carbon heat. So where is the market


at for heat pumps? In some respects, the commercial sector is moving more quickly than residential. A large proportion of new build projects are now being specified with low carbon heat, either through direct client request or the project team in search of higher BREEAM ratings. In existing buildings, owners are looking towards decarbonisation to assist with ESG (Environmental, Social and Governance) or CSR (Corporate Social Responsibility) commitments, as well as to maximise efficiency and address operating costs. Local planning – such as the GLA’s London Plan – is also playing a part in influencing the transition to low-carbon heat. Specifically in the space of


heat networks, adoption of low carbon heat to help reduce emissions is commonplace. Industry guidance and design principles are currently looking towards lower operating temperatures to make integration of heat pumps more effective, something which regulation will push further in coming years. But there are some systemic


barriers which need addressing in order to maximise uptake and reinforce low carbon heat in the future. Two key pieces of legislation are currently working their way through the system to support this. The first is the Future


Jeff House Director of external affairs and policy at Baxi


Industry guidance and design principles are currently looking toward lower operating temperatures to make integration of heat pumps more effective


CUT TO THE CHASE


 Heat pumps, along with heat networks and hybrid systems, are one way existing commercial buildings can move away from a reliance on fossil fuels


 Regulations and industry guidance is encouraging the adoption of lower operating temperatures


 The Future Buildings Standard looks set to mean an end to fossil fuel specification and the wider adoption of heat pumps


 Heat networks are expected to represent the lowest cost solution for decarbonising heat


 The PSDS (Public Sector Decarbonisation Scheme) provides grants to public sector bodies to fund energy efficiency measures


Buildings Standard which aims to provide a pathway to highly- efficient new non-domestic buildings, designed from the outset for net zero. It is expected that this will mean an end to fossil fuel specification, with heat pumps in particular playing a large role. The standard will be enacted from 2025 but with a lead-in period and transitional arrangements, which could mean wholesale change is effectively in 2026. Heat network zoning was


also recently consulted upon. Intended to start from 2025, heat network zoning will fundamentally transform the development of networks across England. The policy will designate geographic zones where heat networks are expected to be the lowest cost solution for decarbonising heat across domestic and non-domestic buildings. Under proposals put forward, certain properties (such as new buildings, buildings which are already communally heated or businesses over a certain size threshold) will be required to connect to a heat network within a prescribed time frame.


Retrofit challenge The real challenge, as we know, is retrofitting the UK’s existing building stock. There are endless papers on how policy needs to change and adapt to better reflect the needs of low carbon heat. These can generally be condensed down to three key points. (1) Energy Performance Certificate reform and


progressive regulation: With EPCs largely calculated based on running costs, reform is needed to prioritise lower carbon options. Once the EPC framework is robust and fit for purpose, there is the potential to look at progressive policy which uses EPC as the basis for enforcement in the future. There are already proposals on this in the form of Private Rented Sector regulation. (2) Spark Gap: The


relative cost of electricity in comparison to natural gas is known as spark gap or spark spread, which at present stands at around 4:1. Redistribution of policy costs from electricity rates and better representation of the generation mix in the unit cost build-up are some of the activities on the horizon. Government needs to act urgently to incentivise and encourage building owners and operators to look towards heat pumps and low carbon heat as a more attractive and affordable option. (3) Local support and


guidance: Businesses will need independent local support and guidance from experts who have a knowledge of the housing and building stock and what works best. Many advocate the role of local authorities here as they understand the local landscape and challenges and, in the fullness of time, will be able to support with local area energy planning and refurbishment schemes at scale. Heat experts like Baxi are also well placed to offer specialist support and


advice on the best solution on a case-by-case basis.


Funding schemes On a positive note, two main central government support schemes are available to help with deployment of low carbon heat. (1) Public Sector


Decarbonisation Scheme – the PSDS, which is delivered by Salix Finance on behalf of the government, provides grants to public sector bodies to fund heat decarbonisation and energy efficiency measures. A funding pot of £1.17bn was announced in 2023, made available in batches through to 2028. Look out for Phase 4 guidance which is expected to be published this summer. (2) Boiler Upgrade Scheme


– the BUS is a grant scheme in England and Wales for heat pump deployment, and a limited amount of biomass, which is primarily targeted at the residential sector. However, as there is a 45kW upper limit on the whole system, light commercial projects can be eligible providing certain criteria are met. A further £1.5bn was allocated to BUS in late 2023 for deployment through to 2028.


Further information The OFGEM website is a good starting point for information and eligibility criteria. Or ask your preferred solutions supplier for expert tailored support for your project and legislation updates. ◼ phamnews.co.uk/624/38


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