Will the current economic crisis open the door for renewable liquid fuels in the UK?
The current high energy costs affecting much of Europe raises some interesting policy questions for the UK governments.
While the immediate concern has been to develop policies to mitigate the direct impact of the price rises, it should also lead to a broader debate about the energy efficiency of the UK’s building stock – which is amongst the poorest in Europe – and the most cost-effective approach to decarbonise these buildings.
The government’s main focus has been on energy security and ensuring it’s affordable, rather than trying to minimise the need for it. Support for energy efficiency measures has fallen dramatically in the decade since 2012, a reduction in funding support of 90%. Households and businesses across the country are paying for that policy failure now, with little sign, so far, that the government plans a renewed focus on energy efficiency.
This may have a direct impact on future decarbonisation policy. If UK buildings are some of the least efficient in Europe, then those off the gas grid are the worst of the worst – typically older, larger and colder than those on the gas grid. This is problematic for decarbonisation planning because the UK government’s strategy proposes a heat pump first approach for these buildings, starting as soon as 2024. It makes little sense to install heat pumps in energy inefficient buildings because performance often suffers and running costs will be higher. Add to that the high installation cost – typically £13,000 now – and you have a solution that most households and businesses are likely to reject.
In Scotland, the plan is slightly different. Their strategy proposes zero emissions at the point of use, and while heat pumps are preferred, Scotland’s policy planners are less prescriptive about what heating system is used, providing it is electric.
This could result in new homes, or those where a boiler is being replaced, having heating such as an electric boiler, night storage or panel heaters installed, simply to save on what would otherwise be excessively high installation costs. The consequence, however, would be high running costs for the end user and, compared to a heat pump, or a boiler running HVO, much lower carbon reductions.
The UK government has not yet published the results of its consultations into decarbonising off grid buildings, and the turmoil caused by the current economic crisis and government changes may delay them further. However, a delay could be a good thing if it results in better policies.
The liquid fuel heating industry has made a very strong case for Hydrotreated Vegetable Oil (HVO) to be included in the government’s off gas grid decarbonisation plans. Our two-year demonstration project has shown that HVO works well in existing oil heating systems and that conversion is cheap and straightforward. Industry research suggests supplies of HVO are more than adequate, and we have also shown how an extension to an existing government incentive scheme and taxation changes would ensure it is affordable for end-users. Finally, our market research clearly shows that, unlike heat pumps, HVO is a solution consumers understand and welcome. Indeed, there is overwhelming support for it to be made available.
The deadline to take action is looming fast and there is a never greater need to ensure that decarbonisation is both fair and affordable. We must hope that the government can take the imaginative leap needed to see that renewable liquid fuels have a role in heating as well as transport, and embraces them as part of a technology neutral policy solution.
27 October 2022
