Decarbonizing the UK's heating system presents a significant challenge, primarily due to the country's reliance on natural gas heating. Over 80% of heating in the UK is powered by natural gas, which is favored for its low installation and operational costs, as well as its simplicity. Convincing households to switch from such a convenient and cost-effective solution is no easy task. However, the urgency to shift away from gas heating within the next 25 years is clear.

This analysis is divided into two parts, with the second instalment to be published shortly. The separation is intentional, allowing us to first understand the challenge at hand before exploring potential solutions. Although a solution has been proposed, its feasibility remains under consideration. It aligns with the principles outlined later in the text but may appear overly ambitious for practical implementation. The necessity of this plan is recognised, yet it warrants further reflection.

Heating Buyer Personas

One of the many things I took away from my Policy Fellowship with the Royal Academy of Engineering was the idea of using personas to think about the heat transition and how to deliver flexibility and minimise system costs. I’ve stolen a little, and expanded, from Nesta’s personas in my table below.  Whilst I have included a reference to financial position, I am not going to discuss this, for the reason that you could apply different financial circumstances to any of these personas and I plan to address the question of financing the transition in part two. I’m sure they aren’t the perfect set, but they serve a specific purpose here and help us think about the consumer offers that are needed through the transition; I will come back to them after a short diversion via technology diffusion.

Technology Diffusion

Like all new technology, we are going to see a classic ‘Bass Diffusion’ or ‘S-Curve’ in the deployment of low carbon heating.  I can readily talk about this as I spent a good few years creating my own S-curves for EV adoption for my PhD. Flukily, my behaviour-based modelling predicted we would reach 1 million EVs, about 3% of the car fleet, in 2024, a milestone just reached. But a key factor in that rate of adoption were fleet purchases, that’s important because fleet managers do the difficult sums whilst company car drivers love the tax benefits. The virtuous circle from that is that those fleet cars become available as used cars 2-3 years later. Whilst I’m the first to state that models are always wrong, what that EV modelling did show was that fleet-buyer incentives were key in early adoption, whilst longer term, bans on the sale of combustion vehicles were essential to meeting the 2050 net-zero goal.  Unfortunately, there is no real equivalent to the fleet manager for our domestic heat users, there is no used heating system market and, until we’re way up the deployment curve I fear that governments will always promise gas boiler bans after the next election or two.

If you plot a nice symmetrical S curve for heat deployment, then we are way off course. Whilst the total number of low carbon heating systems is higher than the 1%ish I’ve suggested is where we’re at, that’s because those additional systems were already in place and weren’t driven by the net zero objective (electric storage and air-to-air heat pumps for example). If we assume around 1% today and 100% by 2050, then a classic S-curve (solid red line below) would need 50% deployment by 2035. Even if the current 600,000 heat pump installs per annum target is met by 2028, and we reached half of our 20% ish community heat target, we’d only be around 25% market penetration; in reality we are far more likely to be on or below the dotted S-curve.

Am I pessimistic, well yes, given the current government’s dallying and apparent lack of commitment from the opposition, but I’m not as pessimistic as you might think. The reason being that this is a ‘long-S’ over 25 years and the population will shift.  Those buying heating systems in 2040 will include people still at school today. I fully expect a far greater proportion of those will fit my ‘Eco-Tech Savvy’ persona than todays’ heat system buyers.  If we can get to 25% penetration by 2035, and we’ve done so with systems that keep people warm for less than the cost of running a gas boiler then implementing a ban will be far more politically acceptable. So I think an accelerating S-curve post 2035 is not just possible, but likely.

Policy Principles for a successful heat transition

To deliver a successful transition, we are going need offers, supported by policy, that enable our different personas to feel comfortable switching away from their gas boiler, since gas is our main focus. The consumer offers will need to look different and to evolve over time as different personas come to dominate the buyer market.

Alongside the personas, I’m going to propose three ‘policy principles’ that will need to be met to ensure a stable environment, cost effective and timely transition.

1.      Political: Since the policy will need to span multiple parliaments, the approach must be acceptable across the political spectrum and be cost effective. This is the only way to ensure investor and consumer confidence in the transition.

2.      Consumer: Must be tailored to the personas and phase of transition, delivered by trusted providers and address the ‘distress purchase’ challenge, provide value for money and simplicity for the majority of consumers.

3.      Infrastructure: Must minimise energy system impacts, take account of local infrastructure needs and address gas decommissioning.

Personas and Principles

To finish off part one, I want to bring the personas and principles together and consider how the principles need to be considered differently for each persona.

Eco-tech savvy

Our first persona largely sits outside of political interest, they will do their own thing regardless. They are quite independent and don’t need lots of consumer support, though perhaps they could benefit from better managed distress purchase situations.  What they do need are price signals and/or apps and appliance controllability to feed their tech nerdiness, but importantly to make sure they are not just warming their homes at low cost, but doing so in a way that benefits the energy system.

Grant Inspired

Our grant inspired adopters need clarity and confidence in the funding process – they need to see stability to take the plunge and they will need installers who inspire confidence and will support them through early operation of their systems.  They will be keen to get the lowest operating cost, and this will be the driver to adopt flexibility, for which they will need trust in their energy supplier or flexibility service provider.

Eco Confused

Our eco confused want to do the right thing, but aren’t necessarily sure what that is; they will need quality information and many will need financial support.  They need clarity from Government – what is the right heating system to install and if the messaging is correct (i.e. on reducing fossil generation at peak), then they are likely to be willing to adopt flexible operation to reduce energy system impacts.  They will also need trustworthy partners to deliver the right heating system for the property and pair it to the right flexibility offering.

Far-Sighted Stayputs

These are not driven by the presence of grant, or by the eco-credentials of their heating but more by the prospects of a long term energy saving and/or value increase to their property; they will plan ahead and are less likely to find themselves in a distress purchase situation.  They primarily need well informed trustworthy installers and may be uninterested in the gains that flexibility can provide, wanting to see surety in the beneficial price differential between their new heating system and their old gas boiler. They will expect recourse if things go wrong.

Follow-a-friend - imitators

Our imitators won’t start to invest in clean heating systems until they can see friends and neighbours with such systems and receive positive feedback about performance and operating cost. They won’t want to feel forced into doing anything and, alongside the uninterested, will form a significant proportion of adopters; both groups are likely to have significant influence on politician’s willingness to implement ‘difficult’ policies. They need to be won over to the clean heat technologies, and flexible operation, by their peers and supported by quality installers and flexibility suppliers.  They will likely be better informed than the uninterested and may have formed plans in the event of a distress purchase based on discussions with friends and neighbours.

Uninterested

Our uninterested personas are similar to the imitators, but they will be less well informed and will need quick solutions for the very likely situation of a distress purchase. Importantly, the uninterested do not appear in our likely future until perhaps 2035 at the earliest (if a gas replacement ban were in place then).  This means that by this stage, over 70% of heating system buyers will have lived with the internet since their early 20s and have grown-up with climate as an issue; they will likely be ‘App-Happy’ and just expect the tech to deliver for them, allowing flex to be built into the base offering.  Some of the uninterested may be impacted by gas grid decommissioning...

No Choicer

Our no choicers are the tail-end of the S-curve.  They are the disgruntled, perhaps climate deniers who don’t want to change, they are likely to have installed gas boilers in the years immediately before a ban, or even purchased used boilers to install. There will be far fewer of these by the late 2040’s as the population will have moved on and there will be few people who have not been exposed to low carbon alternatives. At this point, gas grid decommissioning activity will be widespread; consumers will be forced to change because the gas network will be economically or technically unviable.  Mass switchovers will be needed for the few remaining customers; a politically challenging problem, but far more manageable by the 2040s.