The Telegraph
Heat pumps ‘worse’ than gas boilers for warming up homes, admits Energy Secretary
Boris Johnson’s proposed green alternative to gas heating is inferior to traditional boilers, the Business and Energy Secretary has admitted, as he insisted that heat pumps were not “much worse” than the technology they are designed to replace.
In an interview with The Telegraph, Kwasi Kwarteng conceded that, while gas boilers had been “refined over many years … heat pumps are still in their infancy”.
Fears that the new technology provides significantly less heat in homes than traditional boilers were being “exaggerated”, Mr Kwarteng insisted.
He added: “I don’t think actually heat pumps are that much worse than boilers. All I’m saying is that they could be improved if there was more investment.”
Mr Kwarteng says that providing incentives to firms to invest in the UK production of heat pumps and hydrogen will help the Government meet its target of reducing net greenhouse gas emissions to zero, as well as help to “drive economic growth”, create new jobs, and bring down the costs of the technology.
How heat pumps work
Speaking as the Government finalises its heat and buildings strategy, Mr Kwarteng addressed concerns about the costs of the policy by insisting that ministers would not seek to achieve the target by “writing checks” alone.
“We’re not going to get to a hydrogen economy just by the Government writing checks,” he says.
“We’re going to do that by the Government, yes, writing some checks, if I want to put it crudely, but critically, by attracting private investment.”
Mr Kwarteng warns of a “serious cost of living issue”, as he insists that higher taxes are not inevitable to fund the shift to green technologies, adding: “We’ve got to incentivize economic activity. And you don’t incentivize economic activity, you don’t incentivize investment, you don’t incentivize work, by increasing taxes.”
Mr Kwarteng insists that the costs of new technologies will fall “very quickly” as firms begin to invest in alternatives to gas boilers, stating that consumers could “benefit” in as little as five years.
In remarks that could spark a row with renewables firms, he claims that “the point at which we no longer need to keep subsidizing” offshore wind farms, “has almost arrived”.
Mr Johnson has said that he wants 600,000 heat pumps replacing gas boilers every year by 2028. While gas heating can pump 60C water into radiators, the Government’s Climate Change Committee assumes heat pumps will operate at 50C.
Mr Kwarteng admitted that he currently still has a gas boiler, but said he is planning to buy a heat pump.
Different types of green heating solutions will be appropriate for different types of properties, he said.
Mr Johnson has acknowledged that heat pumps are currently unaffordable for many people at “about ten grand a pop”.
Mr Kwarteng said: “I do have … a gas boiler … but I’m in a position where because I earn a certain amount of money, I can afford that transition, and I’m looking to make that transition. But I would be very reluctant to impose things on people who can’t afford to make the transition. We’ve got to make that work for people.”
Our green industrial revolution will grow the economy using free-market conservative principles
He is the cabinet minister charged with delivering the Conservatives’ commitment to reducing net greenhouse gas emissions to zero by 2050.
But, amid mounting fears on the Tory backbenches over the financial burden that the transition may put on consumers, Kwasi Kwarteng expresses sympathy with those who warn against higher taxes.
Asked if some form of higher tax is inevitable to fund the move to net zero, Mr Kwarteng simply says, “No”.
“Where I am on this is, I think there is a serious cost of living issue,” says the Business and Energy Secretary, in remarks that voice a concern discussed at the highest levels of government.
“Clearly, given where we are in public finances, given all the difficulties that we’ve really soldiered through as a nation, heroically I would say, there’s bound to be concern about taxes and costs.
“The Government has always, in this transition, wanted to protect vulnerable people, which is absolutely right. And the other thing is, this is a gradual process.”
Some reports give the impression “that we were going to send people round to rip out boilers next week. That isn’t going to happen … and it’s going to be a very ordered process.”
As well as harboring concerns about the potential impact of higher taxes on individuals who are already struggling amid the Covid-19 pandemic, Mr Kwarteng, who has long been seen as a leading Tory free marketeer, believes that they could stifle the economy.
‘I’m always very skeptical about tax rises’
Speaking about the prospect of tax rises more generally, the former City analyst states: “Within government I’m always very skeptical about tax increases.
“Yes I think there’s a desire to balance the budget. I think the Chancellor’s instincts are absolutely right to do that. But I’m always wary of the fact that at the end of the day, we’ve got to incentivize economic activity. And you don’t incentivize economic activity, you don’t incentivize investment, you don’t incentivize work, by increasing taxes. It’s that simple.”
The Business Secretary, 46, says there are “times in our history when we’ve forgotten” Britain’s entrepreneurial spirit and have taken “a much more statist approach. But fundamentally, I think, we are a nation of shopkeepers, we’re a nation of small businesspeople. My job as Business Secretary is to foster that spirit.”
The net-zero target, which was enshrined into law under Theresa May, inevitably involves a degree of statism, and it is opposition to government diktats that drives some of the backbench Tory criticism of the policy.
But Mr Kwarteng, who was appointed in January, insists both that the heavy lifting can be done by the private sector, with early financial support from the Government to kickstart new green industries, and help ensure that the poorest households are not saddled with large bills.
‘Huge economic opportunity’
The policy itself, he says, presents a “huge economic opportunity”. A whiteboard in the Business Secretary’s office lists a recent series of major investments announced by firms at the forefront of Britain’s “green industrial revolution” – topped by Nissan’s £1billion battery “gigafactory” that will enable the firm’s Sunderland car plant to ramp up production of electric vehicles.
“What we’re doing in the UK, is using net zero to drive economic growth, to drive jobs as well. I think this is a great historical opportunity.”
Mr Kwarteng says the push for net zero represents “a reconfiguration of our industrial base”, as he points out that the areas in which manufacturers putting down roots to make electric cars and parts for wind turbines are “northern, levelling up type places, places of the historic industrial heartland, which have seen limited investment in the last 20 to 30 years.”
The Government’s strategy will include subsidizing new industries, such as the manufacturing of electric heat pumps to replace gas boilers, and the production of hydrogen, in which ministers believe Britain can become a world leader.
‘Offshore wind has been a great British success story’
But Mr Kwarteng insists: “The aim of the game isn’t to see how much government can spend using taxpayers’ money. The aim of the game is to try and use public money sensibly to attract private investment. And just to bear this out in reality … Offshore wind has been a great British success story … 35 per cent almost of global offshore wind capacity is round here, the UK.”
If Mr Kwarteng intends to model the Government’s plans for hydrogen and heat pumps on its approach to offshore wind, consumers may be forgiven for expecting a repeat of the billions of pounds that have been spent subsidizing the industry to date. And with prominent firms insisting that subsidies for offshore wind farms must continue, when will those actually come to an end?
“This is an interesting question,” Mr Kwarteng replies. “My understanding is that the point at which we no longer need to keep subsidizing it has almost arrived.”
Creating an “attractive environment” which will draw investment from green energy firms to the UK is “the real secret to this.”
“Similarly with hydrogen, we’re not going to get to a hydrogen economy just by the government writing checks. We’re going to do that by the Government, yes, writing some checks, if I want to put it crudely, but critically, by attracting private investment. And it doesn’t work without substantial investment from the private sector.”
Surprisingly, Mr Kwarteng denies that consumers will have to pay more to go green, saying that “costs can fall very, very quickly”.
Consumers will ‘benefit’ in as little as five years
“By investing in this, I think we’re going to be driving costs down.” Consumers will “benefit” in as little as five years, he insists.
Unlike Alok Sharma, his predecessor and the minister in charge of the Cop26 climate conference, who drew some flak for the revelation that he still drives a diesel vehicle, Mr Kwarteng, the MP for Spelthorne, west of London, does not own a car at all. “I didn’t sell it just because you were coming,” he jokes. “I haven’t driven a car in London for 10 years.”
He does, however, admit to having a gas boiler, despite the Government’s drive to persuade people to switch to alternatives such as heat pumps.
“I do have a boiler, which is a gas boiler … but I’m in a position where, because I earn a certain amount of money, I can afford that transition, and I’m looking to make that transition.”
A recent focus group carried out in Redcar, Teesside, by the Onward think tank, identified a mistrust of the Government’s messages on ditching traditional cars and boilers, on the basis that people had previously been urged to buy diesel vehicles and so-called eco-friendly boilers, both of which are now being overtaken.
“I think that’s entirely legitimate,” Mr Kwarteng admits. “I remember the diesel campaign, and we listen to those sorts of things. People have got a point.
“I think the science is much better … I also think that if you look at the opportunity, electric vehicles intuitively are much cleaner than diesel would be. And also, this is where the economic argument fits in, a lot of the people in Redcar … will be directly employed by the companies on my board. And they’re directly invested in Britain being a leader in these technologies in a way that frankly, with diesel cars, we weren’t really at the races there.”