Section 4: Responses to Innovation Sweet Spots

Olamide Oguntoye

Tech Policy Lead, Tony Blair Institute for Global Change

This new report from Nesta uncovers an opportunity to accelerate the low-carbon transition in the UK through technologies that are on the verge of a commercial breakthrough. The findings are important for three reasons.

First – because the report tackles the question of domestic heating, one of the UK’s most carbon intensive sectors with 85% of homes running on gas boilers.

Second – because it comes at a time when UK policymakers need greater clarity on the various technology options to meet the country’s heating decarbonisation targets. With the growing hype around less viable technologies and the high-risk of technology lock-in, it is important to have analysis that cuts through the noise and provides pragmatic recommendations. This report fills the gap quite well.

Finally, the report adopts a bold experimental methodology that combines evidence from sources which are otherwise treated in isolation. Its key finding, the fact that there is a gap between research funding and commercial deployment of low carbon heating, is indeed a policy wakeup call.

What key next steps should be taken to ensure we address the issues raised in this report?

Policymakers must act urgently for things to change. Mature low-carbon domestic heating technologies like heat pumps are very promising, yet deployment levels in the UK lag far behind other countries like the Scandinavians.

The challenge here is less about the technology itself, rather it’s about the policies needed to increase market uptake. Why would home-owners ditch their current gas boilers which work perfectly well only to buy heat pumps that are more expensive, difficult to install and more costly to run in terms of energy bills? The UK is providing grants to cover the marginal capital cost of heat pumps which is a good start. But it would take a far stronger policy framework for things to change radically. The value proposition to both the demand and supply side of the market must be revised urgently.

Updating electricity and gas tariffs to ensure lower running costs of heat pumps, raising building CO₂ standards, regulating new heating installations, and improving energy data systems, are some of the next steps for UK policymakers.

Douglas Morrison

Impact Director, Construction Scotland Innovation Centre

It is evident from research investment that heat pumps are viewed as having great potential to support our transition to a low-carbon built environment. I believe that this optimism is justified although emphasise the critical need to ensure that low-carbon heating technologies are considered alongside the energy performance of the buildings in which they are installed.

Publicly available datasets on efficacy and performance would be helpful in moving from a position of ‘many pilots’ across the UK, towards a coordinated and cohesive programme of decarbonisation using the right technologies in the most efficient way for each building. I believe this report takes an important step in understanding how public discourse and investment are driving wider adoption of technologies and offers insights as to how we can more effectively stimulate rapid and widescale adoption of effective solutions.

Developing a highly trained and competent workforce is critical to our net zero ambitions. Supported by a national framework for competency development, we can create a workforce that can specify, design, install and maintain low carbon heating and energy efficiency technologies to the highest standards. I believe that building confidence amongst home and asset owners, policy makers, and investors in the capability and resilience of the workforce can stimulate a rapid acceleration of our adoption of low-carbon solutions in our built environment.