Are we targeting ASHP's at the wrong market?

[Beelbeebub]

2 hours ago, ProDave said:

THAT is the bit that is so wrong and would be so easy to correct.

 

No wonder the cheaper generators are making big profits, because the system over pays them, making people talk about windfall taxes to punish them.  All that is needed is change the way the market works so they all get paid a fair price for what they generate but not excessive, and no excessive profits to upset anybody.

 

I would love whoever devised this market system to explain why they think it is right the customer should pay inflated prices and thus pay excessive profits to the cheaper suppliers.

 

We keep being told the more renewable generation we have, the cheaper our bills will get.  Under the present system that is a LIE.  Prices won't get cheaper until there is enough renewable to power the lot and we don't need the gas generators to bid for any.

I can sort of understand the logic as it does incentivise low cost (aka renewable) power investment because there are some big profits to be made.

 

On the other hand it doesn't help the consumer because our prices are dictated by the cost of the most expensive source (gas and sometimes oil).

 

There is also a perverse incentive as.we.get towards higher % renewable where nobody wants to bb the one who pushed the UK to 100% renewable and thus spoils the party for everyone (the generators) by dropping the price to wind levels rather than gas.

 

Ultimately if we are going tohave heavilyy renewable generation we will always need some backup, probably fossil fuel, although biomass and waste can also contribute for the few times "the sun doesn't shine and the wind doesn't blow".

 

I would suggest this bit needs to be nationalised. The government operates and maintains loss making gas plants and storage (in the sense they have to maintain, staff etc even though they aren't needed 90% of the time) so it can be the "generator of last resort".

 

[Beelbeebub]

The "green levies" are made up of a number of different charges for different things.

 

Some of it pays for the old solar FiT scheme. That has been closed for a while but because it guaranteed payments for (IIRC) 25 years it's still creating a cost.

 

There are other costs, some to do with renewable subsidies some to do with initiatives like insulation.

 

The point is these costs are not split equally.

 

"These levies make up 16% of the final price of electricity and 5.5% of the final price of gas. For a typical household, they add about £140 to the annual electricity bill and £50 to the gas bill."

 

(figures are rounded)

 

At current (late 2024) price cap levels about £145 from a typical £884 electric bill are green levies.

 

Only £46 of the typical £833 gas bill is green levies.

 

If we dumped the entire £145 onto gas bills you'd get a typical gas bill of £978 (10% up) and electric bills of £739 (16% drop)

 

Crudely the unit price for elec clwuod drop from 24p to 21pand for gas go from 6p to  7p.

 

As I mentioned before, this would change the price differential (and hence efficency needed to "breakeven") from 4:1 to 3:1.

 

Right now your heatpump install needs to be pretty good (at least by industry norms) to break even. Your scop needs to be in the high 3's (though things like no standing charge for gas help)

 

If the ratio dropped to 3:1, that would be well within current standard (if not best) practice

 

 

https://www.nesta.org.uk/household-energy-bills-green-levies/

[JamesPa]

39 minutes ago, Beelbeebub said:

The "green levies" are made up of a number of different charges for different things.

 

Some of it pays for the old solar FiT scheme. That has been closed for a while but because it guaranteed payments for (IIRC) 25 years it's still creating a cost.

 

There are other costs, some to do with renewable subsidies some to do with initiatives like insulation.

 

The point is these costs are not split equally.

 

"These levies make up 16% of the final price of electricity and 5.5% of the final price of gas. For a typical household, they add about £140 to the annual electricity bill and £50 to the gas bill."

 

(figures are rounded)

 

At current (late 2024) price cap levels about £145 from a typical £884 electric bill are green levies.

 

Only £46 of the typical £833 gas bill is green levies.

 

If we dumped the entire £145 onto gas bills you'd get a typical gas bill of £978 (10% up) and electric bills of £739 (16% drop)

 

Crudely the unit price for elec clwuod drop from 24p to 21pand for gas go from 6p to  7p.

 

As I mentioned before, this would change the price differential (and hence efficency needed to "breakeven") from 4:1 to 3:1.

 

Right now your heatpump install needs to be pretty good (at least by industry norms) to break even. Your scop needs to be in the high 3's (though things like no standing charge for gas help)

 

If the ratio dropped to 3:1, that would be well within current standard (if not best) practice

 

 

https://www.nesta.org.uk/household-energy-bills-green-levies/

For my money this change has to happen and is logical from a policy perspective (the current position is wholly incoherent)

 

I shudder, though, to think about the headlines is certain parts of the press when/if it does!  Not to mention what Elon Musk will say. 

[MikeSharp01]

3 hours ago, ProDave said:

14 hours ago, Beelbeebub said:

ie the most expensive.

THAT is the bit that is so wrong and would be so easy to correct.

 

Not that easy, see here: https://www.sustainabilitybynumbers.com/p/electricity-pricing. The only real way is to eliminate gas from our electricity generation then the price could drop. We, the people, don't own our generation so the price is market driven and the price is down to supply and demand in the market. The wind farms can quote any price they like 0.00001p per unit, safe in the knowledge they will get paid the gas price.

[Mike]

On 12/01/2025 at 12:02, G and J said:

Maybe developing loft based heat pumps would help with high density housing.

Or connect them to networked heat pumps in the street, like those installed by Kensa: https://kensa.co.uk/networked-heat-pumps

 

 

 

[Mike]

20 hours ago, Crofter said:

I question the whole 'only well insulated homes can use heat pumps' argument.

My house is very, very far from well insulated, nor is it in any sense airtight. And it's working very well with a heat pump. 

Likewise, if you can heat Bowhill House and Wentworth Woodhouse with heat pumps, you can heat anything.

 

_{Wentworth Woodhouse, Andrewrabbott, CC-BY-SA-4.0, more}

 

[Mike]

And, in the news last week: UK has highest electricity prices in Europe - and lowest heat pump uptake

 

At the moment, electricity costs 3.9 times as much as gas to produce the same amount of energy in the UK – with electricity costing 24.50 pence per kilowatt hour (kWh) compared to 6.24 pence for gas, according to Ofgem. The gap between electricity and gas prices is largely because most of the levies – such as to fund new solar and wind farms and to improve energy efficiency – sit on electricity rather than gas bills. Furthermore, the carbon tax to discourage fossil fuel use – charged on the carbon dioxide produced when generating electricity – is not applied to the gas burned in central heating boilers.

 

As a result, in 2023 the UK had the most expensive electricity in Europe, compared to its gas price – and one of the highest electricity prices in absolute terms.

 

[Beelbeebub]

2 hours ago, MikeSharp01 said:

Not that easy, see here: https://www.sustainabilitybynumbers.com/p/electricity-pricing. The only real way is to eliminate gas from our electricity generation then the price could drop. We, the people, don't own our generation so the price is market driven and the price is down to supply and demand in the market. The wind farms can quote any price they like 0.00001p per unit, safe in the knowledge they will get paid the gas price.

But what if we changed the model so the wholesale price is the average of the sources rather than the highest price?

 

If we don't then, until we get 100% renewable days, our electricity prices will always be set by the gas prices.

 

Even then it will be set by nuclear.

 

 

[Beelbeebub]

I went around a national trust property last week. Outside was just above freezing.

 

Inside was not too bad. Not hot but about right to unbutton your coat, take off your gloves and wander around. There was a video presentation that you could comfortably sit through lasting around 15 minutes.

 

As far as I couod see, the only emitters were the admittedly fairly large, cast iron ones. They were warm to the touch but not scalding. I'd estimate 45C, maybe 50C tops.

 

Ok the total heat demand for the place must have been huge, but it could probably have been provided by a (bloody huge) HP with a scop greater than 2.5 - the point where you emit less carbon than a gas boiler even if all your electricity comes from a gas plant.

[Beelbeebub]

1 hour ago, Mike said:

And, in the news last week: UK has highest electricity prices in Europe - and lowest heat pump uptake

 

At the moment, electricity costs 3.9 times as much as gas to produce the same amount of energy in the UK – with electricity costing 24.50 pence per kilowatt hour (kWh) compared to 6.24 pence for gas, according to Ofgem. The gap between electricity and gas prices is largely because most of the levies – such as to fund new solar and wind farms and to improve energy efficiency – sit on electricity rather than gas bills. Furthermore, the carbon tax to discourage fossil fuel use – charged on the carbon dioxide produced when generating electricity – is not applied to the gas burned in central heating boilers.

 

As a result, in 2023 the UK had the most expensive electricity in Europe, compared to its gas price – and one of the highest electricity prices in absolute terms.

 

Get the ratio of gas to electric to less than 1:3 and making a HP cheaper to run than a boiler becomes much easier.

 

At that point people will start to adopt much faster.

[Beelbeebub]

3 hours ago, JamesPa said:

Not to mention what Elon Musk will say. 

 "man whose wealth depends significantly on electric vehicle sales complains about electric prices being lowered"

[Bancroft]

Two stupid elements to this government push towards ASHPs.

First, ASHPs work best in well insulated, modern houses that can fit UFH.  Most of the UK'd housing stock isn't either.

 

Second, the price of gas is artificially kept low by heaping penalties on electrical prices.  This is, essentially, to help the majority of people who rely on gas boilers and is a way of keeping their heating bills down (and gain votes as a secondary effect...).

 

Ironically, if the price of electricity was not heavily penalised, more people would probably turn to ASHPs.

 

Like tax on EVs, there will be a point at some time in the future when the government of the day decides to 'persuade' people to move to ASHPs and they will do that by switching the penalty structure from elevtricity to gas.

[Alan Ambrose]

Also:  "man whose wealth depends significantly on electric vehicle sales encourages large tariffs on competing vehicles from China"

 

>>> But what if we changed the model so the wholesale price is the average of the sources rather than the highest price?

 

Well, I suppose the gas peakers would decide that they couldn't be bothered to start up - which would make life .... difficult.

 

https://www.theguardian.com/business/2023/jan/29/gas-fired-plants-uk-lights-on-cost-profits-energy-crisis

 

I guess, in principle, high profits to renewables providers should encourage them to continue to build out quickly and squeeze the peakers out of business and/or encourage storage suppliers (pumped hydro, grid scale batteries etc) to invest more. Presumably hydro and nuclear electricity from abroad also helps stabilise the market and keep it honest?

[Beelbeebub]

cost

27 minutes ago, Alan Ambrose said:

>>> But what if we changed the model so the wholesale price is the average of the sources rather than the highest price?

 

Well, I suppose the gas ppeakerswould decide that they couldn't be bothered to start up - which would make life .... difficult

The gas generators would still be paid what they bid to provide power at the price the offered. But the wind/solar etc would only get what they offered, maybe plus a bit so they are still encouraged to build out capacity.

 

I wouod say wind/solar is the ideal thing for the government to be investing in.

 

The cost of renewable energy is basically the upfront build cost,amortised over the life. Yes there are some maintenance costs but essentially once you have built your solar/wind farm it spits out free energy until it eventually wears out.

 

So the finance costs are the bugger. Plus planning, permits, grid connection etc.

 

Luckily, governments can finance easily and can ease permits.

 

Sure it's a debt on the government books but it produces a long term income stream to pay it off.

 

Even the upfront money isn't "wasted" as it goes into the economy

 

 

 

 

[Beelbeebub]

40 minutes ago, Bancroft said:

First, ASHPs work best in well insulated, modern houses that can fit UFH.  Most of the UK'd housing stock isn't either

Work best in well insulated houses with ufh

 

But that's different to "only work in well insulated houses with ufh"

 

First, the "well insulated" bit.

 

Insulation does 2 things, it reduces the overall heat demand and it makes it easier to heat at lower temperatures with sensible emitters.

 

Those two things only effect the capital cost of the install. Higher heat demand means a bigger HP and larger rads.

 

The running costs (relative to gas) are only effected by the flow temps required.

 

My OP showed (OK 2 data points) that you can heat a fairly normal. Uk property at HP friendly flow temps using just normal rads.

[SteamyTea]

Greg Jackson has just been on Radio 4 with his solutions.

He has not said anything new, different or clever.

[PhilT]

1 hour ago, Bancroft said:

Second, the price of gas is artificially kept low by heaping penalties on electrical prices.

To an extent, yes, but maybe not as much as people believe

Green levies are 6% of a typical gas bill, 16% of an electricity bill, and 11% of the average dual fuel bill. 
Climate change levy rate for gas is 0.672 pence per kWh, while the rate for electricity is 0.775 pence per kWh.

 

[SteamyTea]

@Mike

 

That video starts and stops in Portreath.  The smelliest place around here and not where the Heat The Streets project has happened, that is at Stithians.

Edited Monday at 18:02 by SteamyTea

[Beelbeebub]

43 minutes ago, PhilT said:

To an extent, yes, but maybe not as much as people believe

Green levies are 6% of a typical gas bill, 16% of an electricity bill, and 11% of the average dual fuel bill. 
Climate change levy rate for gas is 0.672 pence per kWh, while the rate for electricity is 0.775 pence per kWh.

 

But the point is we are curenrtky just the wrong side of the "tipping  point" where it is easy for a HP to be cheaper than gas.

 

Swapping the levies will make a difference.

Edited Monday at 18:36 by Beelbeebub

[Mike]

1 hour ago, SteamyTea said:

That video starts and stops in Portreath.  The smelliest place around here and not where the Heat The Streets project has happened, that is at Stithians.

Sure - it's one small-scale example project; It's the technology that I was highlighting.

 

Heat the Streets is a programme and interesting because it was open to any and all homes irrespective of ownership in the streets they were working on. But they've done over 300 projects across the country for single owners (Housing Associations, Councils, etc.), many using the same networked heat pump technology.

 

Can't comment on the smell in Portreath though!

Edited Monday at 19:16 by Mike

[Beelbeebub]

I do like the kensa approach of one ground array, multiple independent users. I cans ee it might work really well for blocks of flats etc. You just have some flow and return pipes running up and down the stairwell and each flat just taps into it.

 

[Dillsue]

For anyone thinking we're heading to electricity being from 100% renewables and the end of gas you probably want to look at gov forecasts here https://www.gov.uk/government/publications/energy-and-emissions-projections-2023-to-2050 section 4. A couple of years ago, gov forecasts showed 14% natural gas generation in 2050, presumably with carbon capture, if they can get it to work.

[MikeSharp01]

18 minutes ago, Beelbeebub said:

I do like the kensa approach of one ground array, multiple independent users. I cans ee it might work really well for blocks of flats etc. You just have some flow and return pipes running up and down the stairwell and each flat just taps into it.

 

Yes and with good instrumentation you can charge people by what they take out-of the pipe. Presumably everybody needs a tank for domestoc hot water (DHW) though 

[Dillsue]

8 minutes ago, MikeSharp01 said:

Yes and with good instrumentation you can charge people by what they take out-of the pipe. Presumably everybody needs a tank for domestoc hot water (DHW) though 

My lad lives in S Korea and all the services in his block of flats are individually metered incl hot water. All managed centrally within the block and distributed to all the flats. All tried and tested as its the norm over there and I guess lots of other countries

[Mike]

1 hour ago, Beelbeebub said:

I cans see it [Kensa-style networked heat pumps] might work really well for blocks of flats etc. You just have some flow and return pipes running up and down the stairwell and each flat just taps into it.

Yes, and it's only low-grade heat that's pumped to the flats so the heat loss of the common pipework is very low. There would be no central heat pump for the building as a whole.

 

45 minutes ago, MikeSharp01 said:

Presumably everybody needs a tank for domestic hot water (DHW) though

They do, and they recommend they over sizing the tank by 30% to account for the lower temperature (the maximum temperature produced is around 65°C).

 

Edited Monday at 20:17 by Mike