Technological phase-out experiences in the Energy Sector: Using historic and international analogues to inform ‘net zero’ heat decarbonisation policymaking in the UK

Technological phase-out experiences in the Energy Sector: Using historic and international analogues to inform ‘net zero’ heat decarbonisation policymaking in the UK

Dr Niall Kerr, University of Edinburgh
Dr Mark Winskel, University of Edinburgh

Decarbonising heat is seen as probably the most difficult policy and technology challenge to meet the UK’s net-zero carbon emission targets. In the context of the UK’s strengthened decarbonisation targets, phasing out high carbon fossil fuel heating in new and existing buildings is approaching critical decision points. While the UK’s heat decarbonisation challenge is formidable, there are relevant precedents of wholesale change and phase-out policy in the wider energy sector. This paper reviews evidence on the design and effectiveness of phase-out policy-making in the energy sector, and considers the relevance of these experiences for the UK’s contemporary heat policy challenge. Although caution must be taken when assessing the relevance of analogous experiences, a detailed analysis of relevant experiences can improve understanding of the opportunities and challenges involved.

We firstly review existing approaches to heat decarbonisation policy in a number of European countries. This sets out how national contexts for buildings heating supply vary, and the range of national approaches to heat decarbonisation policy. The review then identifies a number of phase-out analogues from recent history or the present day, drawn from buildings, electricity and transport sectors. Evidence on the design and effectiveness of these phase-out experiences is gathered from academic and non-academic sources, using systematic evidence review methods.

Analogous phase-out experiences in the buildings sector (those closest contextually to heat decarbonisation) include the UK’s transition from town gas to natural gas, alongside the phase-out of non-condensing boilers. The transition to natural gas in the Netherlands is also considered. In the electricity sector, the review considers the phase-out of coal and nuclear power, and also the replacement of analogue metering technology in a variety of countries. In the transport sector, we consider internal combustion engine vehicles phase-out policy and the governance of transport biofuels.

While previous experience of gas transitions provide some useful insight for the design of a net-zero transition, the liberalised nature of the contemporary energy sector complicates coordinated policy design. Regulations introducing the use of smart meters and condensing boilers brought about small-scale change relative to those required by net-zero, but provide contextually useful analogues particularly with respect to public acceptance and the role of the supply chain. Phase-out policy in the electricity sector, planning the cessation of power plants that were once large scale contributors to overall supply, is a relatively long term process and often characterised by unforeseen systemic challenges. The approach to transport decarbonisation policy and its ambition, could provide some useful lessons for the design of heat policy. The rationale for the phase-out of internal combustion vehicles is, however, enhanced by wider policy objectives around air quality and industrial growth, that are less apparent in heat decarbonisation. Alongside lessons from specific sectors, the review assesses cross cutting issues, such as the design of the overall policy package – the use of regulations and the role of market mechanisms – and timing considerations including the nature of the lead-in period to change, the point at which policy is used to signal change and how it is decided when the existing technology will be phased-out.