Memorandum submitted by Baxi Group UK
SUMMARY
1. As a manufacturer of a range of low carbon
heating technologies, Baxi Group welcomes this timely inquiry
into the role that low carbon technology should play in the future
green economy.
2. Domestic CO2 emissions
account for 27% of total UK emissions in 2005 and over three
quarters of energy used in the home is for heating and hot water.
Yet there are over four million of the most inefficient permanent
pilot boilers and around 17 million of the non-condensing
variety still in operation in the UK today. This is despite the
availability of easily installed, high efficiency condensing boilers
on the market for a number of years.
3. The UK also has the most extensive gas
grid network in Europe, reaching into a great majority of homes
and providing low cost heating and hot water comfort to millions
of people.
4. In a paper published in January this
year,[1]
National Grid estimated that up to half the country's domestic
gas heating could be met by turning waste into biogas. In cost
terms, National Grid estimated that biogas would be a similar
price to other renewable energy sources. However, because the
country already has an extensive gas grid, there would be little
need for disruptive infrastructure development or any major inconvenience
to consumers in their homes or in their streets.
5. Government must better understand the
realities of the energy sector in the UK if it wants to achieve
ambitious CO2 reduction targets. Even if a carbon
neutral electricity grid through Nuclear and renewables can be
delivered by 2050, the cable network in the UK would not have
the capacity to cope with 21 million homes switching to electricity
based heating.
6. Greater emphasis needs to be placed on
developing installer skills and the roll out of "transition
technologies" such as flue heat recovery, efficient condensing
boilers and micro-CHP. A Green New deal should be aimed at all
aspects of energy consumption within the UK's homes and businesses,
developing skills at all points in the supply chain.
7. In our report "Home Heating;
It's time for a step change",[2]
published in September 2008, Baxi set out its view, in line with
many in the sector that the Government and industry need to work
together to drive change towards a low carbon economy harder and
faster.
8. A response to specific questions in the
call for evidence is set out below. We would be happy to provide
further evidence to this inquiry if the Committee would like additional
information.
THE BAXI
GROUP
9. Baxi Group plc is a leading European
heating group which provides a wide range of heating and home
comfort products. We employ over 5,000 people across Europe.
10. In recognition of the need to encourage
renewable energy and reduce CO2 emissions, Baxi
has developed a range of renewable and low carbon offerings for
consumers. Including the Baxi Solarflo, Baxi Geoflo, Baxi Combined
Heat and Power and Baxi Biomass Solid Fuel Heating systems, we
offer the largest range of renewable and low carbon products on
the market.
11. Baxi, will shortly be launching the
Ecogen, a groundbreaking new Micro-Combined Heat and Power product,
that allows householders to generate their own electricity, whilst
meeting all the hot water and heating demands within the home.
12. As a leader in conventional home heating
technology, Baxi recognises the need to radically alter the status
quo and has invested heavily in the largest portfolio of sustainable
energy technologies of any manufacturer in the UK market. We fully
intend to be at the forefront of the move towards sustainable
energy and the creation of an energy revolution.
RESPONSE TO
SPECIFIC QUESTIONS
13. Firstly, we congratulate the Committee
for its focus on "low carbon" rather than "renewable"
technologies. Renewables undoubtedly have a role to play in meeting
our energy policy goals, however, too often; policymakers within
Government have been focussed on renewable targets and decarbonisation
of the electricity grid, whilst many low hanging "equally
CO2 saving" fruit in the home heating sector
are ignored.
14. The package of incentives announced
in the budget and the recent Heat and Energy Saving Strategy are
welcome, however they fail to get to the root of the huge task
of tackling CO2 emissions from the 26 million
homes in the UK.
15. Mass market roll out of low carbon microgeneration
technologies alongside gas grid and electricity grid decarbonisation
should be a medium to long-term goal. In the near term energy
efficiency measures such as flue heat recovery can kick-start
the move towards a low carbon economy, providing benefits to UK
plc through reduced energy consumption, greater energy security
and job creation in installation, maintenance, manufacturing and
sales.
What opportunities exist for the creation of a
green new deal whilst pursuing a low carbon economy? Which technologies
have the biggest potential? Has the Government done enough in
its stimulus package?
16. A Green New deal should be aimed at
the upstream and downstream aspects of energy consumption within
the UK's homes and businesses, developing skills at all points
in the supply chain. This will naturally include renewable and
low carbon infrastructure projects such as de-carbonization of
grid electricity and biomethane injection.
17. Technologies aimed at the domestic retrofit
market and at the 1.6 million annual boiler replacement market
have huge potential for CO2 saving. In tackling
this market, Baxi believe that the first step should be to reach
out to the 80,000 or so installers currently involved in
this sector. This fragmented community of small businesses is
key not only to the eventual roll out of microgeneration, but
also for roll out of transition technologies such as the installation
of band A boilers and flue heat recovery or micro-CHP. Yet support
for training and basic information provision is minimal.
18. The figure below illustrates our preferred
approach to improving the way homes in the UK are heated:
| 2009 |
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2020 |
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How realistic are the Committee on Climate Change's
projections for the use of different types of new technologies?
What is needed to achieve the development and deployment of them?
19. Baxi believes that the Climate Change
Committee's projection for the use of low carbon technologies
is appropriate for the long term, however greater focus could
have been provided on transition technologies available now or
in the next few years.
20. By 2050, UK homes may all be super insulated
and heated using a heat pump powered by a virtually carbon neutral
electricity grid, however we can expect every home in the UK to
have at least two heating system upgrades between now and then.
We should therefore not rule out technologies, simply because
they don't take us all the way in the first hit.
21. A report to Government last year by
consultants Element Energy illustrated the potential of microgeneration
to achieve CO2 saving. The report[3]
illustrated both our own, and the industry's view that low carbon
and sustainable microgeneration technologies can make an important
contribution to achieving CO2 reduction targets.
The report projected that under the optimum policy scenarios,
annual savings in the UK of up to 30 mega-tonnes of CO2 could
be achieved through installation of microgeneration by 2030, equivalent
to removing the emissions from all Heavy Goods Vehicles and Buses
from UK roads.
What are the most important drivers, nationally
and internationally, for a low carbon economy in the UK? To what
extent do the outcomes of the international negotiations at Copenhagen
matter?
22. At a policy level, national and international
targets are important in encouraging action by Government. However,
actual savings will be delivered by consumers and businesses,
who often have little interest or comprehension of the "bigger
picture".
23. The most important drivers at the domestic
level are affordability and compatibility with existing patterns
of consumer behaviour. Technologies which enable consumers to
save CO2 at minimal cost and disruption to their
daily lives are likely to be adopted sooner than those which are
expensive and require wholesale changes. The role of Government
should therefore be to create a policy framework that provides
incentives for CO2 saving behaviour such as replacement
of an old inefficient heating system by a band A boiler.
How important is it to the UK economy that it
becomes a leading developer and exporter of low carbon technologies?
What Government policy needs to be in place to do this?
24. The announcement of £405 million
in the budget to support low carbon industries and advanced green
manufacturing is welcome, however the Government has so far been
vague on the detail of this support.
25. There are numerous examples of other
countries within the EU that have utilised Government policy to
become a leading player for specific low carbon industries such
as solar photovoltaics. Despite the much vaunted decline of UK
manufacturing, the UK still has many innovative organisations
capable of manufacturing carbon technologies and these should
be supported further.
26. Baxi has invested in the development
of a new manufacturing facility in Preston, N.E England, for its
Ecogen micro-CHP unit, due for commercial launch later this year.
This facility has already created around 100 jobs, Baxi hope
to produce Ecogen units for the domestic and international markets.
Are we seeing impacts of a downturn on demand
and investment in low carbon technologies? If so, how can this
be addressed given the need to meet long term targets? What obstacles
to investment are there?
27. At the household level, the current
economic conditions have clearly led to a downturn in the UK heating
market as consumers choose to repair, rather than replace faulty
older heating systems. In its draft Heat and Energy Saving Strategy,
Ministers raised the possibility of green finance and low cost
home owner loans for energy saving improvements. Baxi would like
to see these proposals accelerated to stimulate growth in the
market for low carbon home heating and energy efficiency improvements.
What is the potential role for public procurement
and policies such as the 2016 zero carbon homes target in
driving investment, development and job creation?
28. Zero carbon homes will clearly be an
important long term driver for low carbon technologies, however
even in buoyant market conditions two years ago, the UK was only
building just 170,000 homes a year compared to around 26 million
already in existence. This figure is likely to be even lower under
the current economic downturn.
29. New regulations need to be introduced
to tackle the energy efficiency of existing housing stock, such
as requiring the replacement of permanent pilot boilers, or requiring
property to achieve a minimum energy performance level before
sale or lease is permitted.
May 2009
1 "The potential for Renewable Gas in the UK"
A paper by National Grid, January 2009 http://www.nationalgrid.com/NR/rdonlyres/9122AEBA-5E50-43CA-81E5-8FD98C2CA4EC/32182/renewablegasWPfinal1.pdf Back
2
"Home Heating; It's time for a step change" http://www.baxi.co.uk/docs/Heating_Our_Homes_Sustainably.pdf Back
3
"The Growth Potential for Microgeneration in England, Wales
and Scotland, 2008" http://www.berr.gov.uk/files/file46003.pdf Back
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