UK Oil Boiler Ban Sparks Debate

Energy suppliers have given heat pumps a fresh vote of confidence despite calls from backbench Conservative MPs to slow down the shift from heating systems powered by fossil fuels.

The government has been consulting on oil-powered boilers, which heat 1.7m homes across the UK, and is considering beginning a phase out of new sales from 2026.

New installations of gas boilers are also potentially set to be banned in all homes by 2035 as part of the push to net zero carbon emissions.

Clementine Cowton, director of external affairs at Octopus Energy told City A.M. that oil boilers were "expensive and inconvenient," which meant they were "only installed in homes that can't connect to the gas grid."

She said: "Heat pumps are suitable for all types of homes and are simply a better, cleaner and more efficient form of heating than both gas and oil. With prices coming down all the time, we believe people will willingly choose to replace their boilers with a heat pump when the time comes."

Heat pumps are large refrigerant units which extract energy from the air which is turned into zero carbon heating.

A recent government study determined that any style of home could utilise the device, despite claims from companies such as Bosch earlier this year they did not function effectively in older homes.

Octopus is currently offering heat pumps at an installation price of £2,500 for customers using the £5,000 grants offered in the Boiler Upgrade Scheme, bringing them in line with fossil fuel alternatives - with British Gas owner Centrica also offering £3,000 units.

The government is targeting 600,000 new low-carbon heat pumps on an annual basis within five years, however the latest figures covering the period from May 2022 to July 2023 revealed only 21,438 applications were made for discount vouchers.

By contrast, over 20m heat pumps have been installed across Europe.

Government should avoid 'bad science'

There are now fresh media reports the government is considering amending its mooted oil boiler ban, so that households will be allowed to new oil boilers as long as they run on greener fuels.

This follows a proposed amendment to the EBy Nicholas Earl via CityAMnergy Bill from former environment secretary George Eustice calling for boiler upgrade subsidies to be applied to hydrotreated vegetable oil, which can be used as a replacement fuel in boilers that have minor adaptations.

Nigel Pocklington, chief executive of challenger supplier Good Energy, warned the government should avoid engaging in "bad science" and "bad business."

This was particularly damaging in the context of vast subsidy packages for green upgrades in the EU and US, compared to the UK that was "peddling backwards."

He revealed a third of the new heat pump installations overseen by his company since it snapped up Igloo Works last year were transitions from oil boilers - and instead called for the Boiler Upgrade Scheme to be more consumer friendly.

"It's a generous incentive and is beginning to get the cost of an install down to parity with a new boiler setup. But it's obviously poorly understood, quite bureaucratic to apply for and not being taken up in great numbers," he said, speaking to City A.M.

Jess Ralston, head of energy at research group, the Energy and Climate Intelligence Unit, believed the government to needed provide more clarity to homeowners with off gas grid facilities.

She said: "Unfortunately this is a pattern that we keep seeing from Whitehall - delays to confirming plans leave the public and industry in the dark, and don't help to secure green investment or build certainty for installers wanting to re-train. Long term policy stability is key for newer industries so there's no doubt that eyes will be on the government for clarity.'

When approached for comment, a spokesperson for the Department for Energy Security and Net Zero said: "We have consulted on new regulations to phase out boilers in homes and non-domestic buildings off the gas grid from 2026. We will confirm our plans when we publish our response to the consultation in due course.

"We've issued over £81m in vouchers to installers in the first year of our Boiler Upgrade Scheme and are fully focused on meeting our aim of 600,000 heat pump installations a year by 2028, having offered grants of £5,000 and £6,000 towards the cost."

By Nicholas Earl via CityAM

More Top Reads From Oilprice.com:

• Gold Prices Dip As Recession Fears Fade
• Carbon Capture Financing Is Finally Taking Off In The U.S.
• U.S. Steel Stock Skyrockets After Declining Major Merger Proposal