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Oil boiler deployment under ECO: unintended consequences?

The Sustainable Energy Association has developed a report which includes analysis of the recent deployment of oil boilers under ECO2t, in the run up to 2018 and ECO3.

Whilst the release of the long-awaited Clean Growth Strategy and the publication’s celebration of low-carbon industries has been encouraging, the strategy recognised that the barriers to economy-wide decarbonisation remain significant and varied. Energy from buildings was highlighted as a particularly challenging but critical area to decarbonise.

Wider energy efficiency deployment was characterised as a key step in decarbonising buildings, and indeed during the 2017 General Election the Conservative party pledged to insulate 1 million homes over the course of this Parliament. In this context the Energy Company Obligation (ECO) is a key Government policy, and supports the deployment of various energy saving technologies. Whilst many of the energy efficiency measures do both simultaneously, the policy has traditionally targeted carbon-emission reduction and fuel poverty alleviation separately, via different schemes (e.g. HHCRO and CERO) and sub-obligations.

BEIS made changes to the scheme as it entered its transition phase (ECO2t – Help to Heat) in April this year, including placing a limit on the number of condensing gas boilers which could be deployed under HHCRO – the fuel poverty scheme. Statistics show that although the rate of gas boiler deployment has subsequently fallen, oil boilers are now being supported more readily under ECO. Indeed, over 7,000 ‘non-gas’ boiler replacements have been made in the 5 months between April and the end of August 2017.

Whilst the Sustainable Energy Association recognises the need to have a range of technologies to meet the varied requirements of the UK’s housing stock, we are less convinced that a Government policy should be supporting the deployment of heavily-polluting oil boilers. Indeed, the Government has stated its desire to “phase-out highly-polluting fossil fuel heating” and funds the replacement of oil boilers by renewable systems under the domestic RHI.

Our report considers that, whilst the retrofit of an oil boiler can immediately lower the running costs of an off-grid household and does provide ECO-suppliers an additional technology option, the policy’s objectives can be better delivered by alternative measures and ECO 3 should not allow unrestricted oil boiler deployment. Other energy efficiency measures and lower carbon heating solutions can deliver the complimentary running cost and emission reduction objectives supported by the policy, BEIS and the Government.

Of course, there are trade-offs involved when setting ECO targets given restricted budgets and Government objectives, and we’ve had good engagement with the BEIS regarding these issues. As we run up to BEIS’ industry consultation and the start of the ECO 3 scheme in 2018, the SEA and its members will be debating these issues further, and we’d love to hear your view.

To find out more, please contact

Rob Honeyman on robert.honeyman@sustainableenergyassociation.com  

See our full report here

Thursday, November 9th, 2017