Low carbon heating can improve living standards of financially challenged households

12 Aug 2020

Authors: Jack Flower, Graeme Hawker, Keith Bell, University of Strathclyde

The challenges of decarbonising UK residential heating and reducing fuel poverty are closely linked. Previous UKERC work has highlighted the lack of evidence of the impacts of heat policy on vulnerable groups and the absence of equity in current energy markets, while the usual coping strategies of the fuel poor have been challenged further by COVID-19.

The inability of people to adequately heat their homes across the UK could make the reduction of carbon emissions more difficult to achieve than previously thought.

In our new paper in the Journal of Energy Policy, we examined the diverse range of energy demand found in homes across Great Britain, in order to evaluate the actual potential for cost-effective residential emissions reduction through the use of electric heat pumps. We found that for similar dwelling characteristics, financially challenged households use much less energy to heat their homes, and that the end-use heat demands of households with electric storage heaters is half as much as those heated with natural gas.

Average heat demand, normalised by floor area, for each residential area subgroup, for cavity-walled flats with two heated rooms. The left graph shows households with electric storage heaters and the right gas-fired boilers and radiators. The colour gradient indicates the rate of economically active population claiming Job Seekers Allowance (JSA). Note the different axes and the significantly different ranges and diversity of demands.

Underheating and rebound effects: the implications for heat emissions reduction

Although there are many possible social and economic causes, lower-income households dependent on conventional electric heating appear to be under-heating their homes with the potential for increased prevalence of related health problems. Provided the challenge of the high capital cost of low carbon heating can be addressed and help provided with home insulation, this creates the opportunity for the problems of fuel poverty and heating-related carbon emissions to be tackled in tandem, with the drive for low-carbon heating also improving the living standards of financially-challenged households.

In order meet the Net Zero target legislated by the UK Government in 2019, greenhouse gas emissions from heating homes – currently responsible for 14% of all national emissions – will need to be reduced to near zero by 2050 through the replacement of current heating technologies with lower-carbon options such as electric heat pumps. Such technologies are typically more expensive to install, but cheaper to run, than existing heating systems.

However, our study shows that if fuel-poor households are given access to lower-cost heating in this manner, their end-use heat demands are likely to increase in response, perhaps as much as doubling – a so-called ‘rebound effect’. This means that the reduction in carbon emissions from residential heating is likely to be more expensive to achieve than we previously thought for certain households.

The challenge for heat policymakers

Policymakers across the UK are rightly prioritising the residential heat sector as a major target for emissions reduction, but our work shows the importance of understanding how fuel poverty must be tackled at the same time. Although this study highlights that the challenge in meeting our Net Zero goals may be even harder than we thought, we must keep in mind the importance of a well-constructed heat policy in improving people’s comfort, welfare, and health. The challenge of ensuring adequate comfort and health in people’s homes and making it affordable will be brought into sharp relief as we enter the first heating season of the COVID-19 pandemic.

The study also found that the abatement cost of heat pumps – the amount of money that must be invested to achieve a certain amount of carbon emissions reduction – varies significantly according to both the size of household and the existing heat technology. The diversity which exists in the UK housing stock makes it difficult to recommend a single ‘one size fits all’ approach to reducing heat sector emissions. This diversity is highlighted as being potentially overlooked in current heat sector policy. Because of this, high capital cost heat technologies, such as heat pumps, may not initially appear to be cost-effective based on certain cases of existing heat energy use (compared to options such as electric heaters with higher running costs but low installation costs) but may become so once the described rebound effect and broader benefits are considered. The study also highlights the importance of focusing current efforts on carbon-intensive homes off the gas grid which may be using fuel oil or solid fuels as their primary heating source.

Significant demand reduction

Although our study shows that the amount of energy used inside certain homes is likely to be more than we thought (if basing on actual rather than modelled required consumption), the energy used by heat pumps to meet that demand is only a third of what would be required by electric storage heaters or gas boilers. It’s also critical that the insulation of the leakiest homes is dramatically improved to further reduce the amount of electricity that needs to be supplied and reduce bills.

Marginal abatement cost (MAC) results for heat pump systems priced for typical small (left) medium (middle) and large (right) size UK dwellings compared to existing heat technologies: electrical resistive (top), natural gas (middle) and fuel oil (bottom). Each line indicates the cost of carbon reduction for the given heat pump technology compared to the reference existing technology, across a range of household heat demands. The red line indicates the UK Government’s cost-effective threshold for emissions reduction. While many electrically-heated households appear to be above this threshold, the potential for underheating to disguise true heat demand means that they may, in reality, be below it if given access to lower fuel costs.


Jack Flower, Graeme Hawker, and Keith Bell are in the Department of Electronic and Electrical Engineering at the University of Strathclyde.

Jack Flower is a PhD Candidate in the Centre for Doctoral Training in Future Networks and Smart Grids.

Graeme Hawker is a Research Fellow working with the UK Energy Research Centre on local energy systems.

Keith Bell holds the Scottish Power Chair in Smart Grids and is a co-Director of the UK Energy Research Centre.

Jack Flower’s work is funded by the Engineering and Physical Sciences Research Council (grant number EP/L015471/1). Graeme Hawker’s research is conducted as part of the programme of the UK Energy Research Centre (grant number EP/S029575/1).

Jack Flower, Graeme Hawker, Keith Bell, “Heterogeneity of UK residential heat demand and its impact on the value case for heat pumps”, Energy Policy, Volume 144, 2020, 111593, ISSN 0301-4215, https://doi.org/10.1016/j.enpol.2020.111593.