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Commercial heating
What’s next for the off-grid commercial heating sector?
A combination of economic headwinds and growing political pressure led the Prime Minister to announce a change of direction in some of his government’s major Net Zero policies – a defining moment in the UK’s drive to carbon neutrality by 2050. But Malcolm Farrow, head of public affairs at OFTEC, says many questions still remain for the off-grid commercial heating sector which need to be answered quickly to provide clarity for businesses
I
n his speech, Rishi Sunak confirmed the proposed ban on installing new fossil fuel boilers from 2026 in existing domestic homes will be delayed to
2035. While not officially confirmed, we understand the 2026 deadline for small businesses and 2024 deadline for larger commercial premises is similarly being pushed back to 2035. These proposals were initially set out in the government’s Heat and Building Strategy which outlined plans for these buildings to instead switch to a heat pump. The Prime Minister also announced an exemption to the phase out of fossil fuel boilers so that homes that would struggle the most to switch to a heat pump, or other low carbon technologies, would not be required to do so. This is expected to be around a fifth of buildings. So, what does this all mean for the off-grid sector? Whilst this is a change of direction, the endgame is still the same – the government remains committed to Net Zero by 2050. We must continue the transition onto low carbon heating and not lose momentum.
What has changed is that the government
recognises that choice and fairness must now be at the heart of its decarbonisation strategy. We welcome this and have long argued for such an
Left: Malcolm Farrow, Head of Public Affairs at OFTEC
approach. No just for moral reasons, but because it’s clear if consumers and businesses aren’t on side, the scale of change needed won’t happen. According to the Heat and Buildings Strategy, just under a fifth (17%) of the 1.7 million non-domestic properties in England and Wales are situated off the gas grid. They contribute to around one third of UK emissions from building stock. Heat pumps undoubtedly have an important role to play in their decarbonisation. For many commercial buildings, they are an ideal solution and OFTEC will continue to support the rollout of this technology. But as the government has recognised,
many properties off-grid are not suited to the technology without extensive retrofit cost and disruption. These buildings tend to be older and poorly insulated. They often require new radiators, new piping and the reintroduction of a hot water tank for the heat pump to work effectively. This is simply not realistic, particularly in the current economic climate. Businesses have more challenging issues to overcome. They need alternative, straight forward, cost effective solutions. For the past two years we’ve demonstrated that
Above: The Five Horseshoes Inn in South Lincolnshire converted from kerosene to HVO as part of an industry demonstration project
the renewable liquid fuel Hydrotreated Vegetable Oil (HVO) is an ideal alternative for these harder to treat properties on oil heating. The fuel is made from used cooking oil (UCO) and reduces emissions by around 88%. Boilers can be converted in just a few hours for around £500. Around 150 buildings, including a pub, have made the switch and the project has been a huge success. The government recognised this solution in its
Above: HVO is a near drop in replacement for existing oil heated properties and reduces emissions by 88
Energy Bill, putting forward its own amendment which will require the Department of Energy Security and Net Zero to deliver a consultation on a renewable liquid heating fuel obligation within 12 months of the Bill receiving Royal Assent. It followed growing pressure from rural MPs for the government to deliver this option for homes and businesses off the gas grid. The liquid fuel heating industry is ready to rollout
HVO at scale if the government can put in place the appropriate mechanisms. We are now urging the government to bring forward its consultation as quickly as possible to drive this forward. Fundamentally, a diversity of technologies is
key if we want decarbonisation to succeed in the commercial sector. Heat pumps and renewable liquid fuels both have an important role to play so we need to stop focusing on one technology over the other. The priority must be which solution will deliver the best outcome for end users. This is a pragmatic approach which will deliver both our carbon reduction targets and fairness for businesses
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