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Does the decrease in oil costs threaten the future of green energy?



 Aug, 10 - 2017   Oil

With the cost of electricity and gas constantly on the rise it seems, recent figures showing a drop in the price of oil make it an attractive option for domestic heating.

OFTEC is calling for the government to reassess its energy policies but it’s a complicated issue.

For householders who are looking to choose cost-effective solutions to heating, installers need to understand the different options available in order to be in a position to advise them.

 

Are Renewables Viable?

OFTEC believe it’s nonsensical for the government to carry on ploughing money into incentivising technologies, such as heat pumps, to reduce carbon emissions from domestic heating as they run on electricity which is becoming increasingly expensive.

In addition to this, the installation costs for most renewable technologies, even with financial assistance, remains prohibitively high, so take up remains quite low. Some believe it’s become a realistic option only for the wealthy.

Cost is so often the key driver for most consumers and levels of fuel poverty, particularly in rural areas, are depressingly high.

According to the latest data published in July by Sutherland Tables, an independent source comparing UK fuel prices, oil remains the cheapest of all major home heating fuels by far, with average annual costs in Great Britain falling 10% in the last quarter to just £840 for a three-bedroomed house.

By comparison, heating the same home with electric storage heaters meant an increase of 9% in price making the total cost £1,910 which is 127% more than the cost of heating with oil.

 

Surely it’s Not That Simple?

Based on the Sunderland Tables figures, oil is 34% cheaper than biomass and 50% less expensive than radiators powered by air source heat pumps.

As we all know, however, oil prices are unpredictable and the bulk of the World’s oil is produced in areas of political instability.

The unrest in Syria in 2013 caused a rapid $10 rise in the cost of a barrel because it’s a key site in the distribution of oil.

Ongoing disruption to supplies in Libya, the increasing tensions with Russia and political instability in Venezuela and Nigeria are more potential trigger points for possible future price increases.

Environmental factors are also important, particularly with recent evidence of the effects Global warming.

An iceberg four times the size of London broke off the Larsen C Ice Shelf in Antarctica this summer.

 

What’s The Answer?

OFTEC chief executive Paul Rose feels a compromise is needed.

“We are urging the government to be realistic and work with the situation we currently have, rather than pursuing impractical ideals.

Consumers need cost effective solutions to start reducing carbon emissions from heating now.”

OFTEC’s proposals urge the government to introduce a nationwide boiler replacement programme to help the 400,000 households in Great Britain still relying on standard efficiency oil boilers, to upgrade to high efficiency condensing models.

This would provide an affordable, practical and attractive short-term solution to help consumers reduce carbon emissions and cut fuel bills.

 

Understanding The Options

If you are a gas installer, particularly in a rural area, now could be the time to up-skill into oil and/or renewables.

We run a five-day Oil Firing Introductory Course that will set you on the right track.

It’s a good idea to increase your expertise in renewables too.

Whatever the situation now, renewables are the future and equipping yourself with the knowledge to help your customers make what is a clearly complex choice will give you a competitive edge, as well as flexibility in an ever-changing marketplace. Surely a good thing in this unpredictable World!

For more information on our renewable courses, click here.