Among those attending the event near Kenilworth, Coventry, a generally positive atmosphere prevailed. Whilst the market in the UK and Republic of Ireland is and will almost certainly remain smaller than it was just a decade ago, there was a definite feeling that things are at least a little bit better in the oil heating industry than they were a year ago.
It was against that background that we spoke with Jeremy, discussing the current challenges that confront the oil heating industry in the United Kingdom and Republic of Ireland, the role of OFTEC, as well at what the future might hold for the industry and its stakeholders. Whilst Jeremy was open and upfront about the challenges the industry faces, he was far from defeatist and clearly believes the industry will remain an important part of the UK and Republic of Ireland’s energy mix.
It’s now some 8 years since you were appointed OFTEC’s Director General, replacing former Chief Executive Richard Gales. How has the industry changed during that time?
The industry has been impacted by significant changes. Overall, in terms of the number of households using heating oil, the size of the industry has remained relatively constant. There has however been a noticeable decline in unit sales of oil boilers and heating oil tanks. This is due to several factors including a reduction in the number of new builds, fewer ‘new to oil’ installations, a decline in solid fuel conversions and fewer home refurbishments.
In Northern Ireland and the Republic of Ireland, we’ve grown our number of Registered Technicians. In both jurisdictions, the prevalence of heating oil is a multiple of what it is in Great Britain. However, in Great Britain, there has been a decline in the number of Registered Technicians, due primarily to retirements and a reduction in installation and servicing work.
And what do you consider to have been your biggest achievements, since your appointment?
During the past 8 years, we’ve developed the B30K bioliquid fuel and successfully completed field trials between 2008 and 2010. Additionally, we’ve recently just completed a 4 year trial in Northern Ireland too.
We’ve made the Registration and Inspection Scheme more rigorous. This is important, if homeowners and householders are to have confidence in any Competent Persons’ Scheme. The rigorous nature of the OFTEC run scheme has been recognised by Government through the maintenance of our CPS license and in 2012 we received UKAS accreditation too.
In times past, a criticism that could have been made against OFTEC, was that if you mentioned our name, many people would say ‘Who?’. I don’t think that’s as big an issue today as it perhaps was. Feedback suggests awareness of OFTEC is higher than before, reflecting the work undertaken to raise our profile among consumers and industry stakeholders.
We’ve become better too at promoting the benefits of heating oil, which has helped to maintain demand. The OilSave Campaign, which has been co-developed with the Federation of Petroleum Suppliers (FPS) is an important part of communicating our message to a wider audience. We’ve established a good working relationship with the FPS and its Chief Executive, Mark Askew; OilSave is evidence of this.
In Northern Ireland and the Republic of Ireland, we’ve also increased our lobbying and built our profile. We’ve ensured that in both Belfast and Dublin, heating oil is firmly on both the Northern Ireland Executive’s and the Dail’s radar, in a way it wasn’t previously. And we’ve grown the numbers of Registered Technicians in both Northern Ireland and the Republic of Ireland too.
You mentioned B30K. It’s fair to say that in Great Britain, the fuel has been given short shrift by the Department of Energy & Climate Change (DECC). Yet in Northern Ireland, the response from Arlene Foster MLA’s Department of Enterprise, Trade & Investment (DETI) which is responsible for the province’s Renewable Heat Incentive (RHI) seems to be more positive. Why do you think this is?
Almost two-thirds of homes in Northern Ireland use heating oil and DETI realise that bio-liquid can play a significant part in the move to renewable heating systems in the province. OFTEC has lobbied and advised DETI and we were able to draw on our experience of B30K in both Northern Ireland and in Great Britain. The politicians and civil servants in DETI appear to be much more pragmatic than those in DECC and are focussed on practical, affordable and realistic measures to reduce CO2, showing the real value of having a devolved legislature at Stormont.
As an outsider who is not privy to what goes on inside DECC, they do appear to be implementing an anti-heating oil agenda. Is this a fair assessment? And if it is, what do you think is driving that agenda?
My own view is that DECC has a very theoretical approach to de-carbonising heat, which does not reflect the real world and will not work in the real world.
DECC pushed through the Climate Change Act 2008. They also have responsibility for ensuring the UK complies with the EU’s Renewable Energy Directive. This passes challenging legal obligations onto Member States, which require a significant reduction in Greenhouse Gas (GHG) emissions by 2020. DECC appears to be against rural dwellers using heating oil. They see heating oil and LPG off-grid heating as a ‘soft’ target for their plan to de-carbonise heating through its wholesale replacement with either biomass or nuclear and wind generated electric heating. In their view, this will be delivered in the main by heat pumps. The strategy assumes that most UK electricity will be de-carbonised by 2030 and the consumer will be willing to pay higher bills for the up-grading of the transmission network. It’s unlikely that will be the case.
I believe DECC’s policy is over ambitious. Instead, it would be better if they were to plan for a gradual shift to renewable fuels and include 30% and then potentially 100% renewable liquid biofuels in rural areas. DECC claims to recognise the importance of oil heating in rural areas, but they also are determined to de-carbonise heating.
Have you met Ed Davey MP, Greg Barker MP and others from DECC? When you meet with them, what do they tell you?
I’ve met Greg Barker MP and have had many meetings with civil servants. DECC claims to recognise the importance of oil heating in rural areas, but they also are determined to de-carbonise heating. They appear almost unconcerned at the cost impact on rural people saying that the RHI will compensate.
OFTEC thinks the best policy is to incentivise the replacement of old standard efficiency boilers with modern condensing boilers, and also the replacement single skin heating oil tanks with bunded tanks. It’s a pity that the Government will not stimulate these investments – as they do for gas boilers in England and Wales, through the Green Deal Home Improvement Fund.
The long arm of Brussels interference appears to extend ever further into domestic energy policy across the UK. What’s OFTEC doing to minimise the burden of EU legislation upon the UK’s oil heating industry?
OFTEC is a member of Eurofuel, which lobbies through a full time person based in Brussels on behalf of the European heating oil industry. The main achievements of the past few years have been about the Energy related Products Directive (ErPD), where OFTEC has ensured there is no discrimination against non-modulating oil boilers. We fought a long campaign too, to ensure that maximum Nitrous Oxide (Nox) levels are set at 120 mg/kWh as measured by EN267:2011. I expect this will be confirmed within the next fortnight.
That said it is likely more expensive “Blue Flame” burners will have to be introduced by the mid 2020’s – EU environmental legislation is always being tightened. This will increase marginally the price of boilers and also will require new technician training.
Speaking of EU Regulation, last year saw the introduction of the Construction Product Directive in UK and Republic of Ireland law. An outworking of these regulations is that all plastic heating oil tanks should be produced in accordance with EN13341. However, it has been suggested that one heating oil tank manufacturer remains non-compliant. What’s OFTEC doing about this?
We’re fully supportive of the Construction Product Regulation. This issue has been raised with us and we’re currently requesting evidence of compliance from all OFTEC members who manufacture plastic heating oil tanks. Once this exercise is complete, we’ll then be in a position to address any instances of non-compliance.
Competent Persons Schemes (CPS) have come in for some criticism, particularly in terms of the rigour with which they are enforced. Recently, an OFTEC Registered Technician outlined to me, how if he chose to, he could circumvent the OFTEC scheme and in all probability neither Building Control, nor OFTEC or indeed anyone else would be any the wiser. Does OFTEC have any plans to review the operation of its scheme – either working in partnership with or in isolation from other CPS providers.
Our CPS scheme allows heating oil technicians in England and Wales to self-certify building works and thereby save a lot of money. We are hoping that similar schemes will be introduced in Northern Ireland, the Republic of Ireland and Scotland soon.
I believe OFTEC’s Competent Persons Scheme to be about right, in terms of what is required of technicians in order to ensure safe installations and good practice. The operation of the scheme including the inspection regime is laid down by the Westminster Government and has to adhere to UKAS requirements. There will always be those who do not want to register, but they will miss out on the professional branding that OFTEC gives its registrants and the technical and business support that is available.
OFTEC also operates a vigilant process to report technicians wrongly claiming to be registered to trading standards departments.
As an outsider looking in, it’s fair to say the working relationship between OFTEC and the FPS appears closer than ever. Are there any plans for an even closer, perhaps formal relationship between the 2 organisations?
No, there are no plans to have a closer, formal relationship. But we are working very well together with the FPS in areas where co-operation make sense. The Oilsave campaign is a good example of this.
We’ve heard much of the wisdom of combing heating oil with renewables. In many instances, especially in older properties, superficially at any rate there is much to commend it – combining solar thermal with heating oil for instance can make inherent sense. However, for anyone wishing to pursue this approach to domestic heating, there are not many products out there. Is this a market opportunity which OFTEC is prepared to support?
OFTEC is keen to support hybrid oil / renewable heat solutions. At present that product space is very embryonic, owing to the capital cost of the equipment, which is usually at least twice the price of installing an oil condensing boiler. So these systems are not really commercial at present. If and when they become do become commercial, OFTEC will be fully supportive and also will develop the required training and assessment for technicians.
OFTEC appears to be well established in England, Northern Ireland and Wales. However, it appears to be less well established in the Republic of Ireland and in Scotland. Is this a fair assessment? And if it is, what’s OFTEC doing to grow membership numbers and influence in Scotland and the Republic of Ireland?
In terms of registration numbers, that’s a fair observation. The reason for the lower numbers in Ireland and Scotland, is the lack of works notification regulations.
OFTEC is working hard, especially in the Republic of Ireland, where Minister Rabitte has given a firm sign that he supports legislation for the mandatory oil installer registration. In Scotland OFTEC is talking to the Building Standards Department and hopes that the building warrant system will be amended to include the installation of a boiler in a two storey house.
We’ve heard from John Huber today of the National Oilheat Research Alliance in the USA. The prevalence of heating oil in the USA is a multiple of what it is in the UK. What can we in the UK and Republic of Ireland learn from the USA?
I found John Huber’s presentation was very interesting in that it showed that environmental legislation is not at all challenging in the USA and is unlikely to become so, albeit there are some US states encouraging biofuel use. In America they are successfully fighting a shift to biomass due to the high particulate emissions from wood fuel and that’s an area we must focus on as an industry in the future.
Finally, can I ask what has happened to OFTEC Ollie? We were looking forward to catching up with him today, but we don’t seem to see as much of him as we used to and I couldn’t find his name on today’s guest list. Is he keeping okay?
Ollie’s doing just fine. He’s still being used by OFTEC and features regularly in Oil Installer magazine, so be sure to cast an eye over the next edition!