The REA has recently launched REview 24, our authoritative annual assessment of the UK’s renewable energy and clean technology sector. This flagship report captures the state of play across the industry and outlines the progress needed to meet critical net zero goals.  

To highlight the report’s key findings, we’ll be sharing weekly insights until Christmas, covering our strategic focus areas: Power, Heat, Circular Bioresources, Transport, and Finance.  

Each piece will explore the challenges and opportunities within these sectors. With the Government’s announcement on Warm Homes Plans still fresh in the memory, this week’s focus is on heat decarbonisation and the asks the REA is taking to government.  

A slow burn: the state of low carbon heat in the UK 

The REA’s REview 24 report highlights one of the toughest challenges in the UK’s journey to net zero: decarbonising heat. While renewable electricity has made incredible strides—rising from 15% to 47% of total generation in just a decade—the progress in heat has been markedly slower, increasing from 3.7% to just 9.4% over the same period. With fossil fuels still dominating heating, cooling, and cooking, this sector accounts for 20% of UK emissions. The Climate Change Committee (CCC) has been clear: near-total decarbonisation of heat is essential to achieving net zero by 2050. 

However, the policy landscape for heat remains fragmented and overly reliant on a narrow set of solutions. For the UK to make meaningful progress, a broader, more comprehensive approach is urgently needed. 

Current Challenges 

The Boiler Upgrade Scheme (BUS) has shown promise, with heat pump adoption increasing since the grant was doubled to £7,500. Yet, the scale remains far short of the 600,000 installations per year needed by 2028. Furthermore, the future of the Clean Heat Market Mechanism (CHMM), intended to mandate heat pump sales targets for suppliers, remains uncertain due to policy delays and industry resistance. 

The narrow focus on electrification risks excluding other vital technologies. Bioenergy, for example, plays a crucial role in decarbonising heat, particularly in off-grid and older properties. Similarly, the potential of deep geothermal energy—widespread in Europe but underutilised in the UK—offers an untapped opportunity to supply millions of homes with low-carbon heat. 

What Needs to Happen 

Decarbonising heat requires a comprehensive, technology-neutral policy approach that considers the diverse needs of households, businesses, and industries: 

• Support for Bioenergy and Geothermal: Biomass and biomethane must be given greater policy backing to ensure they remain part of the mix. Geothermal projects need a clear route to market to unlock their potential. 

• Decarbonising the Gas Grid: The Green Gas Support Scheme (GGSS) must be reformed to realise its full potential, and greater clarity is needed on hydrogen’s role in the transition. 

• Incentives for Commercial and Industrial Heat: Since the closure of the Non-Domestic Renewable Heat Incentive, there has been little support for businesses to switch to low-carbon heating. The REA has proposed mechanisms like a commercial fuel-switching tariff and industrial heat contracts-for-difference (CfDs) to address this gap. 

Looking Ahead 

This still relatively ‘new’ Government has an opportunity to deliver the step change needed to accelerate heat decarbonisation. Policies must create a level playing field for all low-carbon technologies while providing households and businesses with the incentives and support to transition. 

The benefits are clear: a decarbonised heat sector would reduce emissions, stabilise energy prices, and reduce the UK’s reliance on volatile fossil fuel markets. The challenges are significant, but with focused action and the right policy framework, the UK can make this critical piece of the net zero puzzle a reality. 

Next week, we’ll explore the role of circular bioresources in decarbonising the UK’s economy. Stay tuned! 

Frank Gordon, Director of Policy, REA  

Access the full REview 24 report here: https://www.r-e-a.net/rea-launches-flagship-review-24-report/