Heating our homes, businesses and industry accounts for nearly half of all energy use in the UK and a third of our carbon emissions. Nearly 70% of our heat is produced from natural gas. Meeting our target of reducing emissions by at least 80% by 2050 implies decarbonising nearly all heat in buildings and most industrial processes. Reducing the demand for heat through improved energy efficiency will have an important role to play but will not by itself suffice to meet our 2050 target.

We need to lay the groundwork in this Parliament to set up decisions in the first half of the next decade about the long term future of heat. The demands on our energy infrastructure will change as low carbon heating technologies take over from fossil fuels, with a greater dependence on electricity and potentially new infrastructure needed for system balancing and the generation of low carbon gases. Supply chains will need time to grow to provide products and services consumers across the country will need.

There is a range of low carbon heating technologies with the potential to support the scale of change needed. These include the electrification of heating with households moving away from gas or oil boilers, to electric heat pumps; decarbonising the gas grid by substituting natural gas with low carbon gases like biogas and hydrogen; and heat networks (which are likely to be particularly effective in dense urban areas). At present, it is not clear which approach will work best at scale and offer the most cost-effective, long term answer. We will work with industry, network operators, manufacturers, and consumers to achieve a clear and shared understanding of the potential as well as the costs and benefits and implications of different pathways for the long term decarbonisation of heat. This includes modelling the costs and benefits of different approaches, establishing the likely level of change for households and demands on the electricity grid building on the work of others in this field.

Government has commissioned research into different heat demand scenarios, the use of hydrogen, what changes might be needed to the electricity grid in response to large scale uptake of heat pumps, the role that bioenergy might play in decarbonising heat and international activity. We plan to publish initial findings from a number of studies later this year, and a full report on our review of the evidence by summer 2018.