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Renewable liquid fuels solve a fundamental problem for off-grid decarbonisation

Credit: Alamy


6 min read Partner content

It's time to move away from a one size fits all approach when it comes to decarbonising our homes.

It has become increasingly evident that we can’t decarbonise the off-grid sector with blanket policies reliant on one technology. Whilst it would be wrong to ignore the important role of heat pumps, if we’re serious about delivering low carbon heating to rural homes and businesses then renewable liquid fuels must also be part of the equation.

In its Heat and Building Strategy, BEIS set out proposals to end the installation of new fossil fuel oil boilers by 2026 and focus on a heat pump first approach. Whilst we have concerns about off-grid homes being used as guinea pigs ahead of a wider rollout (see our recent article here), we agree that heat pumps must be part of the solution.

The right fuel for the right home

For new builds and modern properties which are well insulated, heat pumps can be a sensible choice. OFTEC is playing its part and providing training to enable heating technicians to develop the skills needed to support the transition. However, it’s important to recognise the diversity of UK housing stock and that 4 million off-grid homes, of which 1.7 million use heating oil, are not all suited to the same technology. In particular, BEIS’ claim that 80% of oil homes are ‘heat pump ready’ does not tally with real world data.

According to BEIS, 65%% of oil heated homes are in EPC Band E, F or G, and will require substantial improvement to reach the government’s minimum energy efficiency target of Band C. Unless this can be achieved, heat pump performance in these homes is unlikely to be acceptable. The department’s own figures reported the cost of upgrading a home from Band E to C is £12,300 and, from Bands F and G, this increases to £18,900. This doesn’t include the cost of the heat pump itself, which will add on average a further £11,000 to install. It’s clear we have a problem.

If we truly want to deliver a low carbon, green future for the off-grid sector, we need to focus on solutions that are more practical and cost effective. That means adopting a technology neutral approach and choosing the right fuel for the right home. Where heat pumps aren’t suited, we can’t simply leave these homes behind or expect them to manage the high transition costs. Renewable liquid fuels offer a viable alternative to plug the gap and must be included as part of the mix if we want decarbonisation to succeed.

Renewable liquid fuels work

Let’s get the most important factor out of the way first – renewable liquid fuels work. This is not a hypothetical analysis based on modelling. Nearly 100 oil heated homes have already converted to Hydrotreated Vegetable Oil (HVO) as part of an industry demonstration and no issues have been identified in the past 12 months.

The sustainably sourced, fossil-free fuel is a near drop in replacement for kerosene which immediately reduces emissions by 88%. It works in existing oil heating systems following a minor modification to the boiler and a tank clean, which costs around £500, and can be completed as part of a routine service.

The diversity of these demonstrations reflect the true diversity of off-grid properties. From Victorian homes and churches, to schools and pubs, they’ve all adopted HVO after exhausting other options. We are inundated with requests to join our demonstration from oil users, all of whom are keen to reduce their carbon footprint but have been told their property isn’t suitable for a heat pump or they face eye watering costs. Our industry has found a solution for these homes in HVO. Let’s not ignore it or leave these households behind.

This is not just anecdotal evidence, it’s backed up by real data. We surveyed over 220 off-grid heating technicians and the response we received was that less than 20% of the properties they serve were ready for a heat pump. In another survey of over 3,000 oil households, 98% welcomed the option of a renewable liquid fuel as a low carbon solution for their property.

Green policies must deliver bang for buck

We also need to recognise that the landscape has changed in the past 18 months. Household finances are tight and there is little appetite for landmark, expensive changes in the home. The same is true of the government. With an increased focus on public expenditure, low carbon solutions need to deliver ‘bang for buck’ for the taxpayer.

HVO delivers on both these fronts. The entry cost for consumers is low with minimal disruption, and the money households will save compared to adopting a heat pump could be put towards additional basic energy efficiency upgrades, from loft insulation to heating controls. It’s a no fuss, simple transition.

For the government, HVO results in an immediate reduction in emissions – there’s no waiting for the electricity grid to go green. With an existing experienced technician base and fuel distribution supply chain, the industry is already in place to support a smooth transition to renewable liquid fuels.

We must also understand the upgrade cycle of heating systems. The majority of boiler upgrades are distress purchases when things go wrong, usually in winter. This is not a suitable time to assess and transition a property to a new technology which is time consuming and expensive. This is a potential challenge for heat pump adoption – one that renewable liquid fuels can solve, as the existing heating system remains the same.

Equal policy support

It would be dishonest to say there aren’t a few final questions to answer – the same is true of all the low carbon solutions currently on the market. HVO is not widely available so the cost of the fuel is currently higher. The government has set an ambition to reduce the price of heat pumps by up to 50% in the coming years. We believe that by extending existing incentives for renewable liquid fuels beyond aviation and road transport to include heating for homes, HVO can be made an affordable and realistic alternative.

The government set out its commitment to fairness in the Heat and Buildings Strategy and this can only be achieved if consumers are given good choices. There is no silver bullet for off-grid decarbonisation and it’s disingenuous to suggest there is. We must take a pragmatic approach and acknowledge it’s not one size fits all. Heat pumps and renewable liquid fuels both have a role to play and it’s time they were given equal policy support.

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