Connect with us

Published

on

The UK has more than its fair share of looming infrastructure priorities.

There’s a neglected water network that leaks sewage into rivers and clean water into the ground. A rail system in disarray after the last-minute scrapping of HS2. Not to mention roads filled with enough potholes to swallow fleets of electric cars there aren’t enough charging points to run.

All are addressed in the second five-yearly review of the UK’s key strategic priorities by the National Infrastructure Commission (NIC).

But the main priority, it concludes, is to electrify the heating of the UK’s 29 million or so homes.

As Sir John Armitt, chair of the NIC told me with a smile: “It’s literally all hands to the pumps, in this case the heat pumps!”

The main reason, according to the NIC, is one of urgency.

We have just about run out of time to switch away from gas before we miss legally binding targets to cut carbon emissions by 2035.

A heat pump at a Germany plant
Image:
A heat pump at a German factory

But there’s also the economic opportunity in that heat pumps promise to reduce heating bills almost immediately, and halve them by the time we get to 2050 (the NIC forecasts).

Then there’s the added bonus of not being dependent on gas.

That doesn’t just avoid climate risks, but also the ridiculous price volatility of gas which, but one estimate, cost the UK economy £50-60bn extra between early 2022 and early 2023.

For infrastructure folks heat pumps are exciting.

Because they just move heat from one place (typically the air outside your home) and concentrate it in another (your radiator/hot water tank) they’re 3-5 times more efficient than a gas boiler. And when powered by wind, solar or nuclear power, they have negligible carbon emissions too.

The challenge is cost.

Read more:
UK installs record number of heat pumps and solar panels
Rollout of £150m heat pump scheme branded ’embarrassing’

For the time being at least they are on average (according to the NIC report) £10,000 more than a gas boiler to buy and install, and require a fairly energy efficient home.

But, as the NIC outlines today, with a couple of decades of subsidy for heating – just as subsidy helped the shift to clean energy generation like wind power – the switch can be made.

Consumers benefit from lower bills and a planet their grandchildren can live on.

Not everyone sees it that way of course. Companies that run the gas networks and make traditional boilers hardly welcomed the NIC’s key recommendation.

One thing they liked even less was the conclusion there was no place for hydrogen in heating people’s homes (compared to a heat pump, burning hydrogen is 5-6 times less efficient and far more expensive, the NIC found).

Click to subscribe to ClimateCast with Tom Heap wherever you get your podcasts

The possibility of replacing natural gas with hydrogen allowed the existing gas industry to offer “hydrogen ready” boilers and a possible future for their products.

The NIC is urging government to stop flip-flopping around hydrogen (except for industrial uses) and go all in on electric heat.

The big question is of course whether this government, or the next, takes on the NIC’s heat-pump challenge.

Can they afford the billions in annual subsidy costs? Can they afford the political backlash from private homeowners if they feel “forced” to replace their gas boilers (something Rishi Sunak so recently tried to head off)?

But others might argue, given the improvements low carbon heating will make to the economy, and environment long-term, how can they afford not to?

Continue Reading

Business

Lloyds Bank’s Charlie Nunn expects two more interest rate cuts in 2025

Published

on

By

Lloyds Bank's Charlie Nunn expects two more interest rate cuts in 2025

The head of the UK’s biggest mortgage lender has said he expects two more interest rate cuts this year, making borrowing cheaper.

Chief executive of Lloyds Banking Group Charlie Nunn told Sky News he expected the Bank of England to make the cuts two more times before 2026, likely bringing the base interest rate to 3.75%.

Two cuts are currently anticipated by investors, the first of which is due to be a 0.25 percentage point reduction next month.

Money blog: World’s most powerful passports revealed

The banking group owns Halifax and Bank of Scotland, making it the biggest provider of mortgages.

Mr Nunn also forecast house price growth of between 2 and 3%.

“We helped 34,000 first-time buyers in the first half [of the year] alone, 64,000 last year. And of course, it was driven by the stamp duty changes in Q1 [the first three months of the year]. So Q2 [the second three months] was a bit slower, but we continue to see real strength in customers wanting to buy homes and take mortgages. So we think that will continue,” he said.

More on Interest Rates

Please use Chrome browser for a more accessible video player

Expect two more rate cuts this year, says Lloyds boss

It comes as the bank reported higher profits than City of London analysts had expected.

Half-yearly profit at the lender reached £3.5bn as people borrowed and deposited more.

The bank has benefited from high interest rates, set at 4.25% by the Bank of England to control inflation, which have made borrowing more expensive for households and businesses.

Over the last six months, the difference between what Lloyds earns on loans and what it pays out rose.

Mr Nunn told Sky News the profits were due to increased market share in mortgages and small business lending, as well as productivity improvements.

Despite this, Mr Nunn warned the chancellor against raising taxes on financial services, saying it was one of the highest taxed in the world.

Chancellor Rachel Reeves is expected to announce tax rises in the autumn as her vow to bring down debt has come under pressure due to the rising cost of borrowing and government spending U-turns.

Continue Reading

Business

AO chair Cooper interviewed for Channel 4 chair job

Published

on

By

AO chair Cooper interviewed for Channel 4 chair job

The chairman of AO, the online electrical goods retailer, has been interviewed to become the next chair of state-owned broadcaster Channel 4.

Sky News has learnt that Geoff Cooper, a former boss of the builders’ merchant Travis Perkins, is among the candidates in the running to take on the post in the coming months.

Whitehall insiders said that Mr Cooper was now one of the shortlisted contenders awaiting news of whether they would get the nod from Ofcom, the media regulator and culture secretary Lisa Nandy.

In recent weeks, Sky News has revealed that those vying to replace Sir Ian Cheshire include Justin King, the former J Sainsbury boss; Wol Kolade, a private equity executive who has donated substantial sums of money to the Conservative Party; Debbie Wosskow, a start-up founder who already sits on the Channel 4 board.

Simon Dingemans, a former Goldman Sachs banker who sits on the board of WPP, the marketing services group, has also been shortlisted, according to the Financial Times.

Sir Ian stepped down earlier this year after just one term, having presided over a successful attempt to thwart privatisation by the last Tory government.

He was replaced on an interim basis by Dawn Airey, the media industry executive who has occupied top jobs at companies including ITV, Channel 5 and Yahoo!.

More on Channel 4

The race to lead the state-owned broadcaster’s board has acquired additional importance since the resignation of Alex Mahon, its long-serving chief executive.

It has since been reported that Alex Burford, another Channel 4 non-executive director and the boss of Warner Records UK, is a possible contender to replace Ms Mahon.

A vocal opponent of Channel 4’s privatisation, which was abandoned by the last Conservative government, Ms Mahon is leaving to join Superstruct, a private equity-owned live entertainment company.

The appointment of a new chair is expected to take place by the autumn, with the chosen candidate expected to lead the recruitment of Ms Mahon’s successor.

The Department for Culture, Media and Sport has declined to comment on the recruitment process, while Mr Cooper could not be reached for comment.

Continue Reading

Business

Satellite tracker Spaceflux reaches lift-off with £5m funding boost

Published

on

By

Satellite tracker Spaceflux reaches lift-off with £5m funding boost

A British space surveillance company which has won a string of government contracts will this week announce a £5.4m fundraising to expand its global network of advanced telescopes.

Sky News understands that Spaceflux, which was founded three years ago, has secured the injection of capital in a round led by the UK Innovation & Science Seed Fund (UKI2S), which is managed by Future Planet Capital, as well as Foresight Group and Blackfinch Ventures.

Seraphim Space, the listed specialist investor in space-related companies, is also contributing funding.

Money blog: Renowned chef thinks luxury item should be wiped off menus

Spaceflux uses artificial intelligence and optical sensors to track satellites and debris across all orbits, with its daylight tracking capability meaning it can expand the observation window beyond night-time operations.

Its provision of space situational awareness technologies is in growing demand amid warnings that a week-long disruption to satellite navigation could incur a £7.6bn hit to the UK economy.

In a statement to Sky News, Marco Rocchetto, CEO and co-founder of Spaceflux, said: “As space becomes increasingly essential to our economy, environment and daily lives, it is also becoming more congested and contested.

More from Money

“This investment strengthens our ability to protect satellite technology that delivers crucial insights to Earth around the clock, reducing collision risks, and supporting a safer, more sustainable space environment for future generations”.

The valuation at which the funding was being committed was unclear on Thursday.

Spaceflux, which serves government and commercial customers, has been the exclusive provider of geostationary satellite tracking for the Ministry of Defence and UK Space Agency since 2023.

Read more on Sky News:
Tesla looks to cheaper model
Welfare versus warfare: Why PM must choose

Alex Leigh, an investment director at UKI2S, said: “This investment marks a significant step in the convergence of defence and space, where dual-use technologies are becoming increasingly important to UK capability.

“Spaceflux’s technology offers critical insights to help monitor and safeguard orbital assets – supporting both national security and the wider commercial ecosystem.

“The company is well-positioned to scale its impact and meet the needs of customers navigating an increasingly complex space environment.”

Continue Reading

Trending