THE GOVERNMENT announced a multi-billion pound plan for decarbonising Britain's homes as it upped its activity ahead of the Cop-26 summit.

The plan will see households able to apply for £5,000 grants to replace their old boilers with lower carbon options.

It comes as part of an overall £3.9bn package of measures. A £60m programme was also announced to encourage innovation in heat pumps, which are currently prohibitively expensive for most households.

The Government said last night that recent volatile gas prices have demonstrated the need for the UK to develop a home-grown energy sector less reliant on fossil fuels.

The announcement came alongside a raft of green-focussed initiatives ahead of a summit that has become totemic for the Prime Minister.

Boris Johnson will today hail a green investment boom at a summit of foreign investors.

The Government will claim £9.7bn worth of new low-carbon foreign investment has been secured, though some £6bn of this comes from an investment first announced by renewable energy firm and Scottish Power owner Iberdrola in 2019 and another £500m comes from the purchase of a paper mill previously owned by Finnish firm UPM that was bought by Turkish outfit Eren Paper in May of this year. Sources last night did make clear that whilst the Iberdrola investment had been talked about for some time, the firm was now fully committed. £ CONTINUED ON PAGE 2

CONTINUED FROM PAGE 1 The Government's plan to dish out £5,000 subsidies to households to switch to low-carbon boilers was described as a "bung" to suppliers by free market economists.

Andy Mayer from the Institute of Economic Affairs suggested that even if the plan is successful, it "would steadily erode the economics of gas supply by increasing the marginal cost of servicing users who cannot afford to upgrade even with the subsidy. "That means higher prices, and a threat to security of supply as grid maintenance becomes unviable," he added.

In simple terms, heat pumps take the heat from surrounding ground or air, run it over a special liquid to create a gas, then pressurises that gas until it is warmed up - and ready to be used to warm a property.

The Energy Saving Trust estimate the cost of a heat pump for an average home to reach as high as £13,000, leaving a considerable gap between the proposed subsidy and the final cost.

Last night Greg Jackson, the CEO and founder of Octopus Energy, said he hoped that the plan would "kickstart"

a clean heating revolution. He said his firm would install heat pumps for "about" the same cost as new gas boilers when the scheme comes into place in April.

There are also questions about how households will access the grants and whether they will push up the cost of renting further for tenants, with landlords passing on the cost.

"With much emphasis placed on incentivising households to install heat pumps, it is unclear what this means for private renters, who make up nearly a fifth of the country's household occupiers," said Russell Pedley, the co-founder of Assael Architecture.

(c) 2021 City A.M., source Newspaper