A quick fix suggestion for the Government
Published: 08 September, 2016
Radical heating policy would show government means business. A radical new fiscal approach to incentivising the heating market would deliver ‘quick wins’ for both the Government and the industry, according to Tim Rook of the Building Engineering Services Association.
These are not quite desperate times, but decisive and radical action is required to stave off the encroaching gloom and make sure we don’t slip into a period of economic stagnation. It is important to be constructive and to view these extraordinary political times as an opportunity for positive change.
Some imaginative fiscal thinking could very quickly galvanise the heating market and would allow the Government to show intent following its radical move to abolish the Department of Energy & Climate Change (DECC).
DECC’s responsibilities have been subsumed into an expanded business department called the Department for Business, Energy & Industrial Strategy headed by Greg Clark. He said his new department was charged with delivering ‘a comprehensive industrial strategy, leading Government's relationship with business, furthering our world-class science base, delivering affordable, clean energy and tackling climate change’.
The building engineering sector has long argued that closer links between the business community and those capable of delivering the technical solutions that improve the performance of buildings and infrastructure could be hugely beneficial to the country and our economy. Now is the time to show some agile thinking and that Mr Clark and his team really do mean business.
One model they should consider is London’s ‘boiler scrappage’ scheme that incentivised replacement of ageing, inefficient boilers earlier this year. This ‘cashback’ initiative was intended to upgrade around 6500 domestic heating systems in the capital by offering £400 grants to householders. It was modestly successful, but a more radical, national approach sponsored by the new department could really make waves.
Scrappage schemes tend to promote like-for-like replacements in a bid to tweak operating efficiencies. In the London scheme, boilers operating at 70% efficiency and below were targeted, but even a 20% uplift in boiler running efficiency is not going to change the world — it is also not going to galvanise the market.
Simply replacing old boilers with new ones is regressive. It would be far better to design a scheme that incentivises the replacement of boilers completely and puts low-carbon and renewable alternatives in their place. This would deliver major progress on energy and carbon saving and, at the same time, create a truly progressive replacement for the failed Green Deal scheme.
This approach, allied to a revised Renewable Heat Incentive (RHI), could also quickly drive the mass fitting of heat pumps, marking a decisive switch towards low-carbon heating.
The country is making good progress in decarbonising the National Grid, which creates an even stronger argument for widespread deployment of heat pumps as both a carbon reducing and money-saving technology.
Replacing heating and cooling equipment with more energy-efficient modern equivalents can deliver energy savings of 25% to 40% and payback times of five to 10 years, depending on the type of building. This represents a significant ‘quick win’ for both the Government and the industry.
Upgrading the envelope of the same buildings can, ultimately, lead to higher savings, but takes much longer to realise with payback times of 24 to 28 years. So, while thermal insulation and improved airtightness measures will continue to be important, we can move more quickly and decisively if we have clear incentives to upgrade energy-consuming systems.
However, this is not just about energy and carbon. A reduction in the use of boilers would also have significant health-and-safety benefits by reducing deaths from carbon-monoxide poisoning and cutting the worrying rise in NOx emissions and CO2 from energy production.
Combustion products from gas-fired boilers can be a significant contributor to poor indoor air quality. This has been rather downplayed in the face of growing alarm over diesel emissions and other more headline-grabbing sources of pollution. However, with around nine million ageing boilers fitted across the UK housing stock, this is an area that needs to be addressed properly — not just to achieve a marginal gain in boiler efficiency, but as a positive move away from fossil fuels and all their damaging aspects.
Proper maintenance and control are also essential to ensure the best return from this investment — and this is also relatively easy and quick to put in place. The Government is already committed to investigating all opportunities for the use of district heating and cooling networks as they will deliver even greater savings in the long term, along with the integration of renewables in decentralised systems.
These are strong early messages for the new department to promote and would show the jittery business community that there is a significant economic future in energy efficiency and renewable heating and cooling technologies. It would also demonstrate that the new administration is prepared to grasp opportunities and think more radically to support industry.
The beauty is that we don’t need new technology or technical breakthroughs to achieve much higher efficiencies. A more radical and joined-up fiscal approach would accelerate what we are already doing; will drive greater investment in training and upskilling. It will also deliver quick and significant wins for building users and operators in energy saving — while simultaneously meeting the Government’s urgent need to bolster business confidence.
Tim Rook is technical director of the Building Engineering Services Association (BESA).