Founded in 2018, tepeo, a low carbon domestic heating company, has developed the Zero Emissions Boiler (ZEB) which is a direct plug-in replacement for a gas boiler.
Small enough to fit in a home, the ZEB also provides flexibility services to help consumers save money on their energy bills as well as offer balancing services to the grid.
As tepeo recently completed it’s Series A funding round, Current± caught up founder and CEO, Johan du Plessis, to learn more about the ZEB and discuss the urgent need to the UK to electrify its domestic heat.
Who is tepeo and what is a zero emissions boiler?
We started tepeo about four and a half years ago to develop the ZEB which is a direct plug-and-play replacement for fossil fuel boilers.
Almost all of us burn fossil fuels to heat our home, it’s 80% of all of the energy used in our homes and with 95% of that coming from fossil fuels, it is the single biggest challenge we have in decarbonising the UK.
The ZEB is a direct swap for an existing oil or gas boiler: we come in, take out your gas boiler and install the ZEB which plugs into the same pipes. As the ZEB connects to the electricity supply, we also close up the flue so there’s no combustion on site.
Once installed, the ZEB then takes electricity from the grid or from solar on a roof and stores it very densely. This means it’s effectively a ultra-high density thermal energy store – like a heat battery.
It is about the size of a washing machine, which makes it more accessible than heat pumps which have to be installed outside. Although physics means the ZEB has to be larger than a gas boiler, it can store more energy than a chemical battery for example, so it is a very dense way of storing energy.
The ZEB stores 40kWh of energy, so whenever your thermostat cools the heat, the ZEB puts the heat into your radiators or your underfloor heating, as normal.
As far as the consumer is concerned, it’s giving them the same experience as a gas boiler. They get a high temperature flow as they do from the existing boiler but we’re decoupling the consumption of electricity.
How can the ZEB support the decarbonisation of the UK’s domestic heat sector?
Heating is a really big challenge. 17% of all CO2 emissions in the UK come from domestic heating and this has to change.
We clearly need to electrify heating but the bigger problem is we need to move to a system where we use electricity when renewables are available. Therefore, the really big change is moving from our centralised system, which is tailored to big coal or gas power plants, to a decentralised system that supports renewables; this requires making the demand side really flexible.
That flexibility is what we give with our product. The ZEB is automatically able to find the cheapest and the greenest times of day, depending on the carbon intensity of your electricity network, and then make sure it is consuming that electricity at the cheapest time, storing it as heat until you need it for your house.
This is one of the key ways in which the ZEB can reduce the carbon intensity of heating homes.
What would you say is the main barrier to decarbonise domestic heat in the UK?
A lot of the underlying issues come back down to policy and regulation. The government has now started talking about committing to some of the changes that need to happen, but change is very slow.
The more flexibility we can put on our electricity system the better. But with our system, regulations do not encourage flexibility on a domestic scale. For example, people across the country are ripping out water tanks – which are a great store of energy – to put in Combi boilers that have actually been outlawed years ago.
There are regulations that support flexibility, such as the standard assessment procedure, which affects your energy performance certificate (EPC) rating, but there are also some policies like VAT exemptions that still only apply to heat pumps as a very specific technology type. We think having a more technology agnostic approach to the whole issue is an essential part of decarbonisation.
The boiler upgrade scheme in principle was a great idea, but only a fraction of the budget has been utilised, so there are some fundamental issues with policy.
The way energy is priced is also a barrier, which makes the review of electricity market arrangements (REMA) absolutely essential in accelerating macro changes that are going to help us decouple the cost of electricity from the cost of gas, which at the moment is artificially inflating the electricity price. Artificial pricing is one of the things that is going to make people want to continue to burn fossil fuels rather than use electricity.
How can using energy for heating flexibly (heat flexibility) support grid capacity?
All of our ZEBs are internet connected: we have apps customers can access which gives them lots of insight onto how their ZEB is performing. Our Internet of Things (IoT) platform also offers some machine learning which allows the technology to forecast exactly how much heating each individual home needs over the next day based on all the data that we’re getting from that ZEB.
This means the ZEB can use that data to automatically make sure that we optimise the purchase of electricity based on a household’s tariff and the carbon intensity of their local grid.
Taking that a step further, we can then combine individual ZEBs into fleets of ZEBs to create what is effectively a virtual power plant and use them as a distributed grid scale storage asset to provide instantaneous flexibility.
ZEBs can monitor grid frequency and react instantaneously – faster than a chemical battery – to support the local grid infrastructure at no additional cost as there is no impact on the storage materiel.
We currently have an ongoing project with UK Power Networks (UKPN) and OVO called the ‘Neat Heat’ project.
In this project we’re installing ZEBs in homes and looking at the impact on the local network. We follow the flexible price signal OVO give us and purchase electricity to help the energy supplier reduce the overall cost of buying that electricity for the customer. This a first example of what we’re calling a type of use-tariff for heating.
What does the future hold for tepeo?
We raised £10.5 million in our series A in December last year, from a number of investors led by the Business Growth Fund. This means that over the next year and a half, we are primarily focusing on commercial scale and production manufacturing scale, so that we can take on another facility within the year, allowing us to cover the whole of the UK.
We also have some other products in the pipeline including a combi boiler alternative. These are about to start trials and are hoped to reach the market next year.
Our ultimate goal that in two to three years’ time, this product category becomes a mainstream part of heat decarbonisation. The government’s narrative to decarbonising heat has changed dramatically over the last two/three years, moving away from a heat pump only solution to a heat pump plus smart thermal storage more broadly as a category type.
Thermal storage will be an increasingly significant player in the decarbonisation of heat and we consider ourselves a leader in smart thermal storage for central heating solutions.
Is there anything you’d like to add?
I think the key message is that heat decarbonisation is challenging and there is no “one-size-fits-all” solution, which is why it’s particularly challenging.
There’s been too much of an aggressive focus on using solely heat pumps or solely hydrogen to decarbonise heat in my opinion and I think a more varied dialogue around potential solutions is needed.
We have 27 million homes to decarbonise in the next 27 years yet we’re only installing 50,000 heat pumps a year – a drop in the ocean compared to the 1.8 million gas boilers installed every year – so the scale of the challenge is enormous.
The UK needs to be serious about making the policy changes to align with what we’re trying to achieve. This includes addressing the serious skills shortage challenge. For reference, we currently have 200,000 gas boiler installers in the UK but only 4,000 heat pump installers.
In the broader sense the way that people buy their heating systems is generally through their gas boiler engineer, so until we can break that cycle, it’s going to be hard to really get the big change low carbon heating technologies that we need.