Lots of interesting things to disucss in that article.

It seems a little odd that in the Telegrope's graph of heat pump uptake the countries with the largest uptake are those with the coldest climates. Seems unlikely if HPs are as bad as they make out.

I really, really hope the truth is not in between the Telegrope and the Grauniad, but is off to one side in a quiet corner somewhere.

IMO Germany seems to have scored a few own goals lately
Merkel trying to solve Germany's demographic time bomb by opening the boarders to all migrants and causing continuing problems there and in the rest of Europe

Closing the nuclear power stations causing them to go back to coal burning. - Done as part of the governments need to get into bed with the greens in order to form a government

Now the gas boiler ban - where there are doubts that the grid can support the increased demand for the heat pumps (never mind the EVs). - So they have banned gas boilers and will run the heat pumps from coal fired power stations. Hmm - smart thinking Not.

I think the electric:gas price ratio is largely what drives heatpump adoption. If the ratio is over 4, it’s not financially justified - which most people need. Even eco peeps want to do things that are financially sensible long term. If it’s under 2 you’d be mad not to. It’s not a coincidence that the UK and Germany are having trouble adopting them - it’s just that gas has been relatively cheap there.

The price ratio in UK under price cap is currently 33p:10.3p so about 3:1, though electricity costs less on off peak tariffs.

It's changing to 30p:7.5p in July so 4:1. Can't find any reasons why gas price cap is falling faster than electricity, any ideas?

Edit : and how come the price ratio in Netherlands is so far different from in Germany and Belgium, yet grids interconnect? Not many heatpumps in NL if we take the Telegraph's graphic at face value...

Undoubtedly heat pumps can and do work, but they need installing properly ideally in buildings that suit them. The problem is the approach of trying to force the rate of change to too greater degree. The adoption should have been more along the lines of

Mandated for new builds from a given date and to becovered by the building guarantee which includes performance guarantees in terms of heating level and cop /cost. ( this would have forced the creation of a competent well trained heat pump industry that was held to account for the work it does)

Encourage retrofit (via grant funding, the funding again linked to performance guarantees) , in older properties, the performance guarantees would make sure that systems specified would have been calculated properly and customers informed as to the need to balance the needs of additional insulation/emitters against hp size.

Build the skills and knowledge base over time rather than recreate the wild west landscape that appeared under the biomass rhi scheme only for the cowboys to ride away when the subsidies were withdrawn.

Fudging the numbers on energy prices to make heatpumps look good is just disengenuous and will be politically suicidal , there needs to a close look at how electricity is priced not take the lazy option of increasing gas prices. Renewables are currently in no position to replace gas , when you consider intermittency, the need for grid upgrades , the cost of storage and having expensive generation on standby. The problem needs looking at from the viewpoint of value for money and provision of energy cheap enough to make our economy competitive, not the blind pursuit of the net zero dream.

It's worse than that - many "100% renewable" tariffs don't actually buy any renewable electricity at all, instead they buy the ROC/REGO certificate from electricity that someone else had consumed earlier in the year. There was going to be a 'greenwashing' shakeup (edit: now shelved). (Dunno what Octopus's position is).

https://watt-logic.com/2021/08/16/greenwashing/

Posted By: djhOctopus can't do much about the way electricity is priced

Oh, what tough luck for them.

It is because electricity production is pegged to the price of gas is why prices can't be reduced when a production cost is lower than gas - hence the outrageous profits and then the calls for a windfall tax.
IMO it would be better to de-couple the production costs across the industry and charge accordingly.

That idea went on to the back burner, was replaced by a 45% extra windfall tax on renewable generators on top of their 25% corporation tax and 5% VAT, to reflect they are getting more revenue but their costs didn't go up.

So the increase in green tariffs profits is mostly diverted to the treasury rather than the retailer or customer, then being paid out again on capping everyone's domestic gas and electricity bills at the exact same rate, hence

So much for market competition

People buying 100% green electricity for their heat pumps, are effectively paying extra windfall tax to subsidise other people buying fossil gas for their gas boilers!

Bit of a fudge, and surprisingly interventionist by Truss/Kwarteng/Hunt for setting it up, but nobody complained at the time...!

https://www.theguardian.com/business/2022/nov/17/chancellor-extends-energy-windfall-tax-low-carbon-generators

Posted By: Dominic CooneyThere is no gas here so it's not an option for me.

We have gas in bottles propane. We spend less than £300 pa used to be less. We had considered HP but quote was £14k so we put our efforts into spending on a fabric first approach. If you get that bit right and are nicely positioned to make use of solar gain one does not need a piece of sophisticated kit with its inherent expense to heat your house. I think there is a goldilocks area where a HP is suitable and it will be somewhere between what we have achieved and a poorly insulated/constructed property. Our previous house 1898 semi on 3 floor plus a cellar in a conservation area we could not have got it to a position to make it energy efficient. Remove conditions of being in a conservation area and we would have had some chance. Rather than drive everyone down the HP solution we should find a way of households having a carbon footprint target that is if something could be so designed. The country might buy into that, people like choice, driving HP down their throat does not work. Often referred to, if you have no choice you are stuck, a choice of 2 a dilemma, choice of 3+ you now have real choice. Powers that be need to wake up to that.

Posted By: WillInAberdeen
Edit : and how come the price ratio in Netherlands is so far different from in Germany and Belgium, yet grids interconnect? Not many heatpumps in NL if we take the Telegraph's graphic at face value...

I think they messed up. I know quite a few people in the Netherlands and they all pay substantially more per kWh than we in the UK do, mainly due to an energy usage tax/levy that the Telegraph must have overlooked.

BTW Telegraph readers might as well think global warming does not exist if you go by their content.

Posted By: fostertom

Posted By: djhOctopus can't do much about the way electricity is priced

Oh, what tough luck for them.

This is the same reply I got from Octopus when I mentioned to them that the reason I signed up with them was because they offer 100% renewable electricity i.e. they are at the mercy of the international gas price which in turn sets the price of electricity.

I might be being naive here but AIUI the national grid knows the make up of electricity generation minute by minute 24/7 - i.e. how much from wind, solar, gas etc. Therefore it should be possible to work out the true cost of a day's generation and then for Octopus (or any other supplier) to use that info to apply that to my bill over a month period.

The true cost is quite complicated, but bear in mind that anything bought on the open market is bought at the marginal gas price, not near the 'cost' of production. The whole system is designed to encourage investment into low cost production, by giving such investment larger rewards. Then it's complicated further by long-term contracts designed to enable funding of massive projects like nuclear stations. None of the retailers have any control over any of these mechanisms (or very little control anyway) and they certainly can't afford to charge anything except a rate that will at least allow them to break even. What they pay determines what they charge, not what they'd like to think it should have cost.

Jeff said >>>>>"should be possible to work out the true cost of a day's generation and then for Octopus (or any other supplier) to use that info to apply that to my bill over a month period."

If you are willing to take a risk, Octopus offer their agile and tracker tariffs which go up and down with the market as you described. So averagef 18-19p per unit in May, much cheaper than the default 34p tariffs. There's no guarantee they will stay that way! There is an upper limit, so you won't pay $10k..

Most suppliers have been forced by Ofgem to pre purchase their electricity up to a year ahead, at the prevailing market rate. This means your supplier is typically selling you electricity that they bought many months ago, at the high wholesale prices there were back then.

This is because many other firms had not done that, and so were caught out when the wholesale prices shot up faster than Ofgem would allow them to raise the retail price, so many went bust, taking us back to a dominant Big Six and killing off innovation.