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Industry bodies give mixed response to latest ECO proposals

OFTEC critical of failure in proposals to plan for potential introduction of bio-oils as more efficient alternative to kerosene; HHIC welcomes focus on new central heating adoption

Government proposals to reform the Energy Company Obligation (ECO) scheme have received mixed responses from several industry bodies during a recent consultation on the programme.

The latest potential amendments put forward for the next iteration of the ECO, which has been devised to improve the energy efficiency in fuel poor households, include changes intended to better support innovation, as well as a full focus on trying to ensure more affordable warmth in homes.

Initial responses to the consultation have seen a divide around the effectiveness of the new measures, which are viewed by some key industry bodies as prioritising central heating, while excluding oil burners that are often used in rural off-grid properties.

The Heating and Hotwater Industry Council (HHIC) welcomed the decision in the proposals for the next phase of the ECO to prioritise first time central heating adoption. The council also argued that a focus on the boiler cap and insulation that were introduced in the previous iteration of the programme had failed to curb fuel poverty.

HHIC director Stewart Clements said that the proposals for the third iteration of ECO reflected how pressure being put on government to tackle “endemic fuel poverty” was starting to work.

Mr Clements welcomed proposals to expand a cap on the number of broken heating systems to be replaced annually under the programme to the equivalent of 35,000 units from 18,000 under ECO2 as a step in the right direction.

He added, “However, there could be more ambition here - the HHIC estimates that there are around 9 million inefficient ‘zombie boilers’ in the UK that cost consumers more and emit higher levels of carbon dioxide than modern condensing boilers.”

“Our statistics reveal that the installation of a new condensing boiler can cut energy bills by around a third. With the current fuel poverty gap around £300 per year, the savings a new boiler can elicit could lift households out of fuel poverty.”

OFTEC sets out oil burner concerns

Trade association OFTEC meanwhile said it had major concerns over the latest ECO commitments over the decision to exclude oil boilers from the programme in a move it has claimed risked further compounding fuel poverty in rural homes.

The organisation said the third integration of the ECO that was expected to commence in October did allow for households using oil-heated appliances to make use of energy efficiency measures such as controls and new insulation. However, it was critical that there was no eligibility to repair or replace heating systems with new oil-using appliances.

OFTEC added, “Comparable households on mains gas or LPG would continue to have access to this support.”

“Oil using consumers may be allowed to fit other solutions such as air source heat pumps – although these would not be eligible for RHI payments – and LPG boilers under the revised ECO3 scheme, but these systems are far more expensive to run.”

The association has claimed that air source heat pumps and LGP boilers cost up to 60 percent and 48 per cent more respectively to heat an “average” three-bedroom home on an annual basis when compared to high efficiency oil burners. These claims were based on the Sutherland Comparative Domestic Heating Costs Tables from January this year.

OFTEC chief executive Paul Rose said that the omission of new oil boilers from the next ECO was expected to add to concerns around fuel poverty in rural areas, in line with concerns raised by the National Energy Action (NEA) charity.

“The situation could be acceptable if affordable alternative heating solutions to oil existed. But the simple fact is that currently, they don’t.”

“The plan to exclude oil boilers from ECO3, which is due to a misguided attempt to align fuel poverty and carbon reduction policies, would unfairly discriminate against rural households in fuel poverty over their urban counterparts connected to mains gas – the very people the scheme is designed to help. Mains gas and LPG have not been excluded yet both are still fossil fuels with high carbon emissions.”

Other considerations raised by OFTEC about the consultation was a failure to consider the “potential future development of liquid bio-fuels” that could replace kerosene as a means to support development of new, higher efficiency technologies.

Mr Rose said, “Since OFTEC first began engaging with government on decarbonisation of the oil heating sector, much progress has been made. We have received positive responses from the minister of state for energy and clean growth, Claire Perry, who recognised that a range of low carbon options should be available to consumers and that this could potentially include a low carbon liquid fuel replacement for kerosene.”

“As a result, a joint OFTEC-BEIS industry working group has been established to co-ordinate discussion and action. Testing has also begun to assess the viability of a synthetic bio-oil called HVO as a likely drop-in replacement for heating oil, requiring only modest and relatively inexpensive modifications to existing heating systems. Early indications are very positive, with further research into this and other types of bio-liquid fuels ongoing.”

In the meantime, the roll out of high efficiency boilers would help lift many consumers out of fuel poverty by considerably reducing their energy bills and provide immediate carbon savings towards government targets.

Paul Rose concludes: “Since OFTEC first began engaging with government on decarbonisation of the oil heating sector, much progress has been made. We have received positive responses from the Minister of State for Energy and Clean Growth, Claire Perry, who recognised that a range of low carbon options should be available to consumers and that this could potentially include a low carbon liquid fuel replacement for kerosene.

“As a result, a joint OFTEC-BEIS industry working group has been established to co-ordinate discussion and action. Testing has also begun to assess the viability of a synthetic bio-oil called HVO as a likely drop-in replacement for heating oil, requiring only modest and relatively inexpensive modifications to existing heating systems. Early indications are very positive, with further research into this and other types of bio-liquid fuels ongoing.

“Excluding oil heating from ECO3 presents a major step backwards in government thinking and contradicts the very essence of what the scheme is designed to achieve.”

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