The Committee on Climate Change (CCC) today published a report by Frontier (Europe) and Element Energy on district heat and local approaches to decarbonising the heat sector. The report fed into the CCC’s advice to the UK government on the fifth carbon budget covering the period 2028-2032. Five-yearly carbon budgets serve as stepping stones for how the UK can reach its legally binding target on reducing carbon emissions by 2050.

District heat can play an important role in reducing carbon emissions from the heat sector. Analysis by Element Energy found that district heat could serve 18% of heat demand in the UK by 2050, up from just 1% today. To achieve this, Frontier found that policy intervention is required to overcome barriers to the uptake of district heat, including a financial incentive to address the externality in the market related to carbon emissions. Additional policies could be applied in zones where district heat is found to be cost-effective – for example, subsidies for other low carbon heating interventions could be restricted within these zones.

Frontier (Europe) regularly advises public sector clients on policy issues relating to the energy sector and climate change.

For more information, please contact Goran Serdarevic on g.serdarevic@frontier-economics.com, or call +44 (0)20 7031 7000.