Miatta Fahnbulleh is the Labour MP for Peckham.
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I agree that geothermal energy represents an important opportunity—if the hon. Member hears nothing else I say today, I ask him to hear that. It has the potential to deliver clean and secure energy and heat, reducing our reliance on fossil fuel markets. As he mentioned, we are acutely aware that geothermal energy could also support a just transition by creating thousands of jobs that use skills from our oil, gas and coalmining sectors. The Government provide financial support for geothermal projects today, and we will continue to do so. The critical thing is ensuring that this is done at an acceptable cost to consumers and in an environmentally friendly way.
Not just today but over recent years, the hon. Member has made a convincing case for the merits of pursuing deep geothermal. The Government remain committed to exploring the renewable energy opportunities afforded by our geography and geology. However, I hope the hon. Member will understand that the priority now—and the thing my boss has tasked me with—is developing the warm homes plan. It would be premature for the Government to set a geothermal strategy with detailed targets in advance of that plan. For us, it is a question of sequencing; for instance, if we are to make the most of geothermal’s potential, we need to start by creating an environment that enables the growth of heat networks and, crucially, protects consumers along the way.
Full debate: Geothermal Energy
Secondly, because of our exposure to fossil fuels, the cost of living crisis saw bills rocket to £2,500 and families plunged into unstable debt—debt that continues to accumulate today. In the system we have inherited, every bill payer pays for managing this debt burden. We are determined to act on behalf of those in debt and all the bill payers who are paying the costs of it. So we are working closely with Ofgem to accelerate proposals on a debt relief scheme that will support households that have built up unsustainable energy debt through the crisis and have no way of paying it. This will be an important first step to cut the costs of servicing bad energy debt, and under these plans the target would be to reduce the debt allowance paid by all bill payers to pre-crisis levels.
Full debate: Warm Home Discount
The draft regulations were laid before the House on 28 November 2024. As heat networks have not yet been debated in this Parliament, I want to say a few words about the context for the draft regulations. Some 23% of the United Kingdom’s carbon emissions come from heating buildings, so decarbonising heat is key to reaching our net zero commitments and to reducing our reliance on international fossil fuels as we sprint to clean power by 2030. Heat pumps and heat networks are the two principal technologies that we believe will achieve that.
I would love to give the right hon. Gentleman a number, but as it is not fully in our gift, because we are working with industry partners to get to the scale we want to achieve, I will refrain from doing so at the moment. But will he please be absolutely reassured that we are trying to run at pace? I see the huge potential of heat networks. They are a way in which we can not only decarbonise our urban centres, but fundamentally lower bills for large numbers of consumers. We are doing everything we can to reassure industry, put incentives in place and ensure that we have a regulatory framework that absolutely works for industries and for consumers so that we can get to 20% sooner rather than later.
Full debate: Draft Heat Networks (Market Framework) (Great Britain) Regulations 2025
Making the transition to cleaner, cheaper heating is one of the most important challenges that we face as a country. We are absolutely determined to make that transition in a way that is ambitious, achievable and, critically, absolutely affordable for consumers. Every household deserves the security of a home that they can afford to heat and we believe heat pumps have a key role to play in that. Heat pumps are, on average, three times more efficient than gas boilers and are powered by electricity that becomes cleaner every year as the share of renewables on the grid grows. Heat pumps can therefore slash the level of energy we use for heating and reduce our reliance on gas. That reliance cannot be overstated: nearly half of the UK’s total natural gas consumption every year is currently used for heating buildings, producing roughly a quarter of total greenhouse gas emissions.
Full debate: Draft Clean Heat Market Mechanism Regulations 2024
We recognise that heat batteries are a promising alternative electric heating technology. That is why we have launched the homes for net zero project, which is aiming to monitor the performance of up to 50 heat batteries in existing homes. We are expecting the results of that later this year. The key thing for us as we make the decision is whether it is a good deal for consumers. Is it efficient, is it cost-effective, and does it deliver the right outcomes—the outcomes that we need to see in people’s homes? As we build that evidence base and we build our confidence that it is the right proposition for consumers, we will look to review the policy framework, including subsidies, as we move forward.
Full debate: Heat Batteries: Decarbonising Homes