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UK energy firms facing £50m fines if they fail to meet 'bizarre' heat pump targets


The Business, Energy and Industrial Strategy (BEIS) Committee has called on the Government to significantly ramp up plans to install heat pumps in homes across the UK. Darren Jones MP, Chair of the BEIS Committee said the Government must “supercharge its efforts to decarbonise the way we heat our homes to help reduce bills and carbon emissions”. But under current plans, a “market mechanism” proposes fining British gas boiler manufacturers if they don’t sell a Whitehall-dictated number of alternatives such as heat pumps.

Four British manufacturing companies make ninety percent of the 1.7 million boilers sold in the UK, but 70 percent of heat pumps sold in the UK are imported.

But British manufacturers could face penalties of £5,000 for every product failing to meet the imposed target.

This means a British manufacturer failing to meet their target by 10,000 units risks facing a staggering £50million penalty.

Mike Foster, CEO of Energy and Utilities Alliance, told Express.co.uk: “I can’t recall an industrial policy that is so anti-free market as the one Whitehall is now proposing.

“It has been confirmed that officials will tell industry how many products they need to sell to avoid a fine, regardless of what the consumer actually wants.

“I am shocked that a Conservative Minister, Lord Callanan, supports these Soviet-style production quotas for British industry, which take no account of the most basic laws of economics.

‘Without demand, firms cannot sell products and the PM himself has acknowledged that heat pumps are too expensive at “ten grand a pop”.

“Yet they are both willing to penalise successful British manufacturers for not selling their quota.”

Mr Foster argued that this strategy will put British jobs at risk and see the UK lose out on revenue.

He said: “British-based boiler manufacturers have told Ministers they will simply import heat pumps, rather than make them, as it is cheaper to do so if they are faced with these penalties.

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“This will avoid the fine but make redundant British workers.

“The UK will lose tax revenue, see benefit costs increase, all because Ministers don’t understand economics or value British manufacturing.”

“History teaches us that these centrally imposed quotas will fail but the cost will be paid by British manufacturing workers and the world-class businesses that employ them.

“The British gas boiler industry has responded to the challenge of net-zero, and developed award-winning zero-carbon gas boilers, for the very government department, BEIS, that now wants to penalise them if they don’t sell the alternative to these innovative boilers. It’s just bizarre.”

Despite this, the BEIS committee is still urging the Government to find new ways to help meet the target of rolling out heat pumps quicker.

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The Government has agreed with the Committee that improving energy efficiency in homes will be an important, but was slammed for not coming forward with any new proposals.

And the Committee identified some major flaws in the Government’s current strategy.

Mr Jones said: “The Future Homes Standard – which will require housing developers to better insulate new homes and install low carbon heating systems – will still not come into effect until 2025.

“For people living in properties that currently exist, ministers still haven’t dealt with the energy elephant in the room and brought forward a scheme that is open to all homeowners and tenants who need to insulate their homes and use less energy. This must be dealt with urgently.“

Express.co.uk has contacted BEIS for comment.

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