Mixed approach to decarbonising off-grid heating could deliver £7bn of savings

Thursday 24th October 2019

• Mixed technology approach would save £7bn compared to 100% electrification • Policy framework needed to kick-start transition to low carbon energy

New analysis by Liquid Gas UK, the trade association for the LPG industry in the UK, has shown that a mixed technology approach to decarbonising heating systems in the 1.5million off-grid rural homes in the UK would save over £7billion, the equivalent of over £4,700 for homeowners.

The analysis undertaken by Ecuity Consulting, on behalf of Liquid Gas UK, looked at five different potential routes to decarbonise off-grid homes, with the goal of meeting the UK’s 2050 Net Zero targets. Of these routes, only the rapid replacement of technologies in a mixed or fully electrified approach would meet the UK’s target and of the two, the mixed technology approach was the most cost effective.

A mixed technology approach involves offering off-grid consumers the choice of a range of low carbon options including; BioLPG and Heat Pumps (Air source & Hybrid), among other solutions. Meanwhile, the electrification route limits homeowners to heat pumps which are notably more expensive than other options and will also make the installation of retrofitting measures, such as insulation, double glazing and temperature controls, even more necessary in order to ensure a heat pump provides a consistently warm temperature.

George Webb, Chief Executive, Liquid Gas UK commented: “We need to kick-start the deployment of low carbon heating options with a policy framework that supports a mixed approach as clearly this is the best option for consumers. This should include measures such as oil boiler or oil tank scrappage systems to incentivise the 1.1m consumers currently on oil to make the switch.

“For homes off the gas grid, a mixed technology approach is a pragmatic and credible route to meeting these targets by delivering a 90% reduction in emissions, while saving over £7billion in costs to homeowners. Due to costs and preserving homeowners right to choose, Government should not prescribe a one-size fits all approach to decarbonising off-grid homes.”

Using the example of an off-grid home built between 1945-1964, the up-front cost of switching to bioLPG would be £1,500. This is compared to £6,570 for a heat pump, without taking into account retrofit costs, £8,120 for a biomass boiler, £7,270 for a hybrid system and £1,400 for direct electric panels. When taking into account the levelised cost, or cost of energy by source to the consumer, bioLPG is £90/MWh, £97/MWh for heat pump, £132/MWh for biomass boiler, £102/MWh for a hybrid system and £180/MWh for direct electric panels.

Webb continued: “A mixed technology approach has three clear advantages over a solely electrified route. Firstly, there is the higher up-front cost of full electrification to both the homeowner and industry, not to mention the cost of upgrading the grid and network costs in order to allow the grid to cope with the extra demands.. Secondly, a mixed approach alleviates pressure on supply chains with challenges including scalability and training of heat pump installers, all of which will take time.

“Finally, and perhaps most importantly, this provides consumer choice to homeowners. Off-grid consumers live in a range of different property types. Policy makers must recognise this diversity by supporting a range of low-carbon heating options.”

Webb added: “As we outlined in our 2040 vision where we set out plans to transition to 100% bioLPG, we believe bioLPG to be a credible route to decarbonising off-grid homes in the UK. As a drop-in fuel that offers significant reductions in carbon emissions and comes with little up-front costs, bioLPG has a major role to play in the future energy mix.”

To read more on the approaches to decarbonising off-grid heating, click here to download the report: 

  • Ecuity report countryside image

The trade association for the LPG and bioLPG industry in the UK