‘World first’ boiler scrappage scheme unveiled by London mayor
Thursday, August 09, 2018
Whatever else you may have heard; the U.K. isn’t exclusively focused on the machinations of its proposed exit from Europe now.
Beyond the constant debate about "hard" and "soft" Brexit options, the mayor of London, Sadiq Khan, has been busy making his own headlines. Although it is on a decidedly smaller scale in policy terms than uncoupling from the EU, Mayor Khan’s unveiling of an upgrade scheme for boilers in the commercial sector and for small businesses does deserve attention — and in fact is being proclaimed as a "world first" — unless someone knows differently.
The Cleaner Heat Cashback program is what has colloquially become known to the industry as a "scrappage scheme," where the owner of inefficient equipment is incentivized to scrap it and to upgrade to more energy efficient technology.
The incentive is a generous wad of cash, upon purchase of the new equipment. The previous mayor of London, Boris Johnson (whatever happened to him?) had some small success with a domestic boiler scrappage scheme, aimed at homeowners, which sought to rid the capital of the most inefficient boilers — but small appears to have been the operative word, as it saw fewer than 500 boilers upgraded.
The new scheme from Mayor Khan, which is promising £10 million of funding, is distinctive in that it is aimed at the commercial boiler sector – aimed, he says at helping small businesses both save money on their energy bills and helping to improve the capital’s air quality.
This latter aim is a key point — London is under a lot of scrutiny for its air pollution, and while transport is the main culprit, heating adds a significant contribution to the NOx emissions.
Commercial gas consumption from heating is currently responsible for 7 percent of London’s NOx emissions, the Mayor’s office said, but as measures to cut harmful pollutants from transport take effect, this proportion will increase.
With the Cleaner Heat scheme, the goal is to banish not only the least energy efficient commercial boilers, but also the least IAQ-friendly ones.
And this means he has the biomass boiler squarely in his sights — a fact that will cause more than a few ripples in the UK renewables industry, given that biomass was a key technology for commercial developments only a few years ago. But the tide of opinion has turned against biomass from many environmental quarters because of its relatively high PM particle emissions.
At the same time, the scheme offers no possibility to install higher-efficiency oil boilers, so the mayor is looking to effectively dissuade their use in the capital too.
The mayor’s office promises that the Cleaner Heat Cashback scheme will provide between 30 to 40 percent cashback to small and medium-sized businesses, when they replace their "older, polluting boilers, with new, cleaner heating systems."
Businesses that qualify will get a higher percentage of cashback (35 percent) if they replace their existing boiler with a renewable technology, such as heat pumps or solar thermal systems, and there are higher percentages for businesses located in areas of poor air quality — known as Air Quality Focus Areas.
Another distinction from other upgrade schemes is that this one is only open to SMEs, so to qualify, the business must meet the EU definition of an SME, which is fewer than 250 employees and an annual turnover of under €50m.
To be eligible, boilers must be 70 kW or more and over 10 years old if they are gas, LPG or oil. However, the scheme will replace coal or biomass boilers of any age, because they are held to be particularly bad for air quality.
The replacement system has to meet strict criteria — at least 90 percent efficiency for gas or LPG boilers. The new system can also be connected a heat network, or it can be a renewable technology, such as solar thermal, air or ground source heat pumps — but all the systems must have NOx emissions of 40mg/kWh or less.
The scheme is designed to run until March 31, 2020, or until funds last.
The decision to tackle small business is based on sound logic – London workplaces make up around 40 percent of the capital’s greenhouse gas emissions and thus the scheme will help fulfil the mayor’s ambition to make London a zero-carbon city by 2050.
The mayor’s office launched the scheme with typical tub-thumping fanfare, saying: "The Mayor is doing everything within his power to tackle London’s toxic air which leads to the premature deaths of thousands of Londoners every year. Newer, more energy efficient heating systems will help to tackle air pollution in the capital as it will see a reduction in harmful NOx emissions."
The scheme has (naturally) been welcomed by the U.K. heating industry as a way to incentivize replacement with more efficient models, and the focus on business, as opposed to the more commonly-courted householder has been applauded. Manufacturers predict that those who embrace the scheme will find they achieve results where it matters, on the energy front. One, Remeha, cited a customer reports of a fall in gas consumption of 48 percent after upgrading to a high-performance condensing boiler.
Given the potential, a number of parties have called for other regions to follow London’s example with their own schemes.
Remeha’s sales director, Chris Meir, spoke for many: "London alone expects to reduce NOx emissions by 80 tonnes a year; cut carbon emissions by between 20 and 70 thousand tonnes annually; and shave up to £7m off business bills. Just consider the scope for savings if carried out on a national level. We would therefore urge the government to follow London’s lead and implement a countrywide commercial boiler scrappage incentive."
The prospect of a national scheme that would incentivize more energy-efficient heating is certainly attractive. But does the U.K. government have the appetite for it at a time when there are other, arguably more urgent, matters to deal with?
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