5 key takeaways from switching over 100 oil heated homes to a renewable liquid fuel
With 1.7 million off-grid homes in need of decarbonisation solutions, OFTEC sets out the main insights gathered from switching kerosene heated properties to Hydrotreated Vegetable Oil.
As another winter draws to a close it’s becoming increasingly clear that, to successfully transition off-grid homes and businesses to low carbon heating technologies, we need practical and affordable solutions. The UK has ambitious net zero targets which must be met, but communities not connected to the mains gas network present a unique challenge for decarbonisation. This stems from a combination of diverse and older housing stock mixed with social and economic factors such as high levels of fuel poverty.
Heat pumps have an important role to play but we can’t rely on one solution to decarbonise over 1.7 million off-grid properties, particularly those which are harder to treat. That’s why our industry has been running a demonstration project for the past three heating seasons, which has switched nearly 150 oil heated properties from kerosene to the renewable liquid fuel Hydrotreated Vegetable Oil (HVO). During this time we gathered extensive data, insights and feedback from participants. Here are five things which stand out.
1. HVO works as a replacement for kerosene
The big question for any project is does the technology work. In this case it’s a resounding yes. The demonstration has been a huge success with no significant issues identified. Sites have been up and running across the country, from Cornwall to the Scottish Highlands, reflecting the diversity of UK housing stock. The near 150 sites are a mix of homes, pubs, village halls and churches and it’s evident this is an incredibly versatile fuel that presents a low carbon solution for many harder to treat properties.
HVO has also been put through its paces with cold winters and hot summers. Day to day, participants often forget they had switched from kerosene to the greener fuel as the operation of the system is exactly the same from the user point of view. But it’s behind the scenes where it gets exciting.
The conversion cost is expected to be around £500 and can be completed in a few hours as part of a routine service with only minimal changes to the boiler and no changes to the fabric of the house, making the process hassle free. As a result, carbon emissions are reduced by 88%. Importantly, it avoids the need for immediate disruptive and expensive renovations often needed for oil homes to transition to heat pumps, such as new radiators, the reintroduction of a hot water tank and energy efficiency upgrades. Instead, households can upgrade their home gradually, as and when it suits them.
2. It's supported by consumers
Households are sometimes reluctant to adopt greener technologies due to concerns about cost or functionality. That’s particularly understandable when it comes to the heating system which is central to the home in both the architecture, and as an essential utility for keeping warm. We’ve surveyed over 3,000 households with oil heating and found that over 97% wanted the option of switching to HVO – a significant level of support for the fuel.
In contrast, a recent public Attitudes Tracker published by the government found that 45% of consumers were unlikely to adopt the existing low carbon solutions on offer, such as heat pumps, due to upfront cost. The switch to a heat pump could cost an oil heated household on average £20,500 and, for many homes, this could reach £30,000 once the full retrofit costs are included. Furthermore, nearly a third (31%) also said that they didn’t think it would be possible to install these technologies in their home. Decarbonisation will only succeed if consumers are on board which is why HVO has huge potential.
3. The liquid fuel heating industry is ready to deliver
The process for oil heated homes joining our demonstration project was very straight forward. The main reason being the existing industry, which has built up significant experience and expertise over decades, was already in place. This included fuel distributors up and down the county ready to deliver HVO, and OFTEC technicians on hand to support with the modifications to the heating system. As a result, the liquid fuel heating industry is very confident it can rollout HVO across the UK at speed over the coming years.
The training required for the existing installer base to convert oil heating systems from kerosene to HVO is also relatively straight forward and we’ve already put the necessary measures in place. However, diversifying into heat pumps is a more complex, time consuming, and often more expensive process for technicians, which is why it’s hard to see how the UK will deliver on the number of installers needed to meet the government’s targets.
4. The cost of living crisis changes everything
The UK has undergone huge changes over the past few years due to the pandemic, a war in Ukraine and the cost of living crisis. The financial impact has been significant and there is no appetite, or quite simply the money, for either the government or rural consumers to commit to big financial expenditures. The government’s heat pump first policies need to evolve to reflect the new reality.
There’s also no immediate sign that the cost of living crisis is going away anytime soon. Even when the economy does recover, it may take years for consumers and businesses to get back to ‘normal’. Without knowing the future, we can’t start down a path which relies on a significant improvement in the nation’s finances. We must ensure decarbonisation solutions are realistic in the current landscape. That’s why HVO needs to be a part of the mix.
5. We’re seeing growing support from rural MPs
In its Heat and Buildings Strategy the government proposed banning the installation of fossil fuel boilers, which would include oil, from 2026 in homes and small businesses and 2024 for larger businesses. In most cases these properties would be expected to switch to a heat pump. Given we’re already into 2023, time is very short. The costs for heat pumps are still too high, the installer base isn’t ready and there is scepticism amongst consumers.
Rural MPs are recognising these challenges and echoing the concerns of their constituents. This is evidenced by the recent Ten Minute Rule Bill, calling for more support for renewable liquid fuels. The other issue at play here is the next General Election. A recent market research survey we conducted of over 1,000 oil heated households across 15 rural parliamentary constituencies found that nearly three in four (72%) voters said the government’s current proposals would impact how they vote at the next election.
Heat pumps have an important role to play and OFTEC is training technicians to support their installation in appropriate buildings. But they aren’t a silver bullet and will not be the best solution for every property. We need to stop focussing on the technology and focus on the outcomes. That’s why we must adopt a more technology neutral approach, which recognises both heat pumps and HVO as viable options for decarbonising the off-grid sector.
Fundamentally, it’s about giving consumers a choice to help them secure the best solution, but it needs the government to put in place the appropriate policy mechanisms.
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