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Residential HVAC: comment


www.heatingandventilating.net The future of oil


The oil heating industry is undoubtedly facing challenging times. From proposals outlined in the Clean Growth Strategy suggesting the 850,000 oil using homes in England and Wales could be moved to electrically driven heat pumps, to plans to exclude oil boilers from the next round of the Energy Company Obligation (ECO) scheme, the road ahead looks far from smooth says OFTEC chief executive Paul Rose


come at considerable cost and disruption for consumers. This is in addition to the significantly higher installation costs associated with heat pumps, typically £6,000 to £18,000 (source: Energy Savings Trust), compared to around £2,000 for a new, high efficiency condensing oil boiler. The cost of heat pumps may mean not all households can afford to install them and benefit from the Government’s domestic Renewable Heat Incentive scheme. Given the higher percentage of fuel poor homes in rural areas (14% urban vs 11% urban source: DEFRA Fuel poverty statistics February 2018), it seems nonsensical to me to prioritise scarce government support in this way. The problem will be further exacerbated if oil


boilers are eliminated from the new ECO3 scheme. This proposal could be acceptable if affordable alternative heating solutions to oil existed but the simple fact is that currently, they don’t. LPG, the other option for heating off-grid homes,


OFTEC chief executive Paul Rose


W


hat both these proposals overlook is the potential for the oil heating industry to produce its own low carbon solution. This


represents an exciting opportunity to both grow market share and support the government’s decarbonisation plans. OFTEC is working closely with both industry and government to bring to market a low carbon liquid fuel alternative to kerosene that will meet the needs of policy makers, consumers and our planet well into the future.


Common goal


The end goal is undeniable and OFTEC is in complete agreement with government on the urgent need to decarbonise the UK’s domestic heating sector. But how this is best achieved to ensure consumers are provided with practical low carbon solutions they can afford to take up, must be fully explored. Off-grid homes are hard to treat and as


convenient as it would be for all concerned, there is no ‘one size fits all’ solution. Many rural properties are older with the lowest


EPC ratings, making heat pumps impractical without extensive insulation and/ or improvements which


24 July 2018


costs up to 48% more than kerosene and is far from the ‘clean’ heating solution government is looking for. Yet LPG would still be eligible for ECO3 under the new proposals. I believe this clearly discriminates against oil using households and would plunge many already vulnerable people into even greater financial difficulties.


The solution


Going forward consumers need choice and the ability to select the most suitable low carbon heating solution for their individual needs from a range of different options. OFTEC has clearly communicated its concerns over the Clean Growth Strategy proposals and encouragingly, the tide of thought seems to be turning with government since acknowledging that ‘a mix of heating technologies’ will be required into the future. OFTEC strongly believes a low carbon liquid fuel should play an important part in this mix and following direct engagement with the Minister of State for Energy and Climate Change, Claire Perry, other MPs and policy makers, a joint OFTEC-BEIS industry working group has been established to co- ordinate discussion and action on the future of the off-grid oil heating sector. Whilst the right solution cannot be conjured up overnight, progress to develop a liquid biofuel is already underway. OFTEC, in partnership with leading industry manufacturers Ecoflam, EOGB and Riello, has begun testing the viability of a synthetic bio-oil called hydrogenated vegetable oil (HVO) and the initial findings are very positive.


Large scale production of HVO is already underway across Europe and the US, with capacity expected to increase a further 40% by 2020. As initial tests have shown, a liquid biofuel like HVO can be used in existing oil heating systems with no modifications required and with an established distribution network already in place, the associated costs to migrate to a renewable fuel would be low. OFTEC is also monitoring the aviation sector where considerable investment in biofuel development is taking place which is likely to produce outcomes suitable for heating use. OFTEC recognises that sustainability is a key issue that needs to be resolved for biofuels. However, biofuel production is rapidly evolving and waste materials such as used cooking oil (UCOs) and fats, oils and greases (FOGs) are increasingly being used. Given the UK heating oil requirement is estimated to be a small proportion of transport demand at 1.8 million tonnes per annum, fat capture schemes could be one potential solution that can be deployed across the UK, supported by government investment, to increase raw material supply. Certainly many water utility companies are keen on this route.


Developments in biofuels continue to accelerate as government pressures grow, and so more biofuel options are likely to come to the fore. At this stage we are keeping our options open to ensure we find the right solution. With funding pots currently available for innovations in low carbon heating, OFTEC is also seeking financial support from government to help fund the development of this realistic and practical solution.


Next steps


Should a renewable liquid fuel prove viable for domestic heating, migration should be preceded and supported by an incentivised programme to upgrade the estimated 400,000 old, inefficient ‘zombie’ oil boilers still in use, paving the way for transition to the new bio-liquid.


This would be followed by gaining recognition for bio-liquids in any future versions of the RHI. Industry will also continue to develop the next generation of appliances to ensure they meet the increasingly stringent standards for efficiency and emissions.


The oil heating industry may be facing challenging times but decarbonisation offers a significant opportunity to step up, collaborate and innovate to deliver a real, workable and futureproof solution. We are determined to meet this challenge head on.


www.heatingandventilating.net


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