Heating costs for rural homes could soar under new ‘green’ energy plans

Almost one million rural households in England and Wales could see their heating bills soar if new government proposals go ahead.

Plans outlined in the Department for Business, Energy & Industrial Strategy’s recently released ‘Clean Growth Strategy’ recommend switching the 850,000 rural households currently heated by oil to electrically driven heat pumps in a bid to reduce carbon emissions from domestic heating.

Latest industry figures* reveal that, unless wholesale and very expensive improvements are made to the energy efficiency of the home, heat pumps can cost up to 88% more to run than high efficiency oil boilers.This could leave rural consumers facing a rise in their heating bills of up to £750 per year.

At a time when incomes are static and many household costs are rising, this would have serious implications for those households not on mains gas and could plunge many more into economic hardship, resulting in higher levels of fuel poverty.

It could also increase the already scandalously high number of elderly and vulnerable people who die each winter because they can’t afford to keep warm. Figures just released show there were an estimated 34,300 excess winter deaths last winter (2016/17), up 39.5% on the previous year.

In addition to much higher running costs, even with the incentive payments currently available through the domestic Renewable Heat Incentive (RHI) scheme, heat pumps still cost at least £6,000** to install, making them prohibitively expensive for most households to take up. This excludes the cost of fitting the larger radiators and additional insulation often required for heat pumps to work effectively in rural properties, which tend to be older and less well insulated.

One of the organisations who has major concerns over the financial, social and practical implications of BEIS’ plans is OFTEC, the trade association for oil heating.

OFTEC Chief Executive Paul Rose comments: “We fully support the urgent need to reduce carbon emissions from domestic heating but government’s current proposals are misinformed and misguided. Switching off-grid homes that currently rely on oil to heat pumps, which are expensive to install and run, would spell economic disaster for many. This situation cannot be allowed to happen.

“Fortunately, there are other options on the table. Drawing on our extensive knowledge of the off-grid sector, we have developed a far more realistic and affordable solution which looks at migrating oil using homes to a low carbon liquid fuel alternative via a two-step approach.”

OFTEC’s proposals focus on introducing a short-term boiler replacement programme (2018-2022) to upgrade the estimated 400,000 older, standard efficiency boilers still in use across England and Wales, supported by mandated heating controls to further reduce energy use.

Independently verified calculations show this simple to implement move alone would prove considerably more cost effective in reducing carbon emissions from oil using homes than the domestic RHI. The flagging scheme has already cost government over £236m in payments, with millions more committed up to 2021, despite falling way behind targets due to poor take-up.

Meanwhile, industry will continue its work to bring to market a low carbon bio-liquid fuel to start replacing heating oil from 2022. The new fuel would work on existing high efficiency oil boilers following a relatively simple and low cost modification.

Paul Rose concludes: “Our strategy is not about prolonging the life of oil heating for the benefit of our industry – there is far more at stake here. Consumers need affordable and practical alternatives to government’s current plans which are too expensive and could lead to catastrophic social harm, particularly for low income families and the elderly.”

To oder a full copy of OFTEC’s proposals and our ‘Hard facts about decarbonising off-grid homes’ click here.

*Sutherland Tables October 2017 comparing the average annual cost of heating a typical three bedroom home with an air source heat pump and a condensing oil boiler.

**Energy Savings Trust 2017

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