When will natural gas be phased out? A cursory glance at the UK’s climate change obligations is all you need to know that natural gas is on borrowed time. For many businesses, gas boilers can be replaced with cleaner, electrified alternatives, and it’s probably coming sooner than you think.
The UK is in the midst of a rapid process of ‘electrification’ in two areas – heating and transport. The latter is the more visible of the two, with electric cars already a common sight in our towns and cities. But just as important is the transition away from natural gas (or oil) heating that is quickly gathering pace.
Heating buildings account for around 17% of the UK’s greenhouse gas emissions, most of which are from natural gas. Thankfully, there are already a number of cleaner alternatives to your gas boiler on the market, such as heat pumps or high-efficiency far infrared heating.
You may have heard a lot of talk about using hydrogen, but the hydrogen economy is still in its infancy and will focus primarily on activities that are difficult to electrify. When it comes to heating most buildings, electrification is a far superior and less costly option. And what’s more, it can be done today.
Will natural gas be phased out? Rising levies on gas bills
Gas has traditionally been more affordable than electricity, but things are changing. The government is committed to increasing the cost of gas relative to electricity over the course of the 2020s to encourage a switch to cleaner energy.
One way it is doing this is through the Climate Change Levy (CCL) added to your business energy bill. The CCL is a tax that was brought in to encourage businesses to use energy more efficiently. Natural gas is currently taxed at a lower rate than electricity, but this discrepancy will gradually be turned on its head over the next few years. The CCL rate for electricity is now frozen for at least the early 2020s, while the rate on gas will continue to increase annually.
A new tax, called the Green Gas Levy, is also expected to be launched by the end of 2021. This is a new levy on top of the CCL, which will add an additional cost to gas bills.
Calls for further tax changes continue to be popular. In future, it’s not out of the question that we might see an economy-wide ‘carbon tax’ that would further increase the relative cost of natural gas and other fossil fuels.
Subsidise your own electrification through renewable solutions
The beauty of solar power is that it can act as your own in-house subsidy for electrifying your heating and transport. A solar PV system on your rooftop will generate electricity to power your heat pump or infrared heating panels directly, reducing your electricity costs in the process.
In other words, it’s a perfect partner to help you rapidly shift away from gas heating – meaning you avoid the extra costs around the corner and capitalise on the brand opportunities of going green today.
Stay ahead – contact us today for a free Energy Saving Opportunity Survey.
