Phoenix – fuelling the future

The NI Natural Gas Association is calling for policy changes to encourage more people to upgrade their heating systems.

When Phoenix Natural Gas first brought natural gas to Northern Ireland in 1996, the company believed that strategically their investment would be best facilitated by empowering the indigenous workforce already in place to create its very own natural gas industry to support the gas network roll out to homes and businesses throughout the Greater Belfast area. This was a departure from how the gas industry in Britain had developed.

It was this decision that in turn created an independent industry that today employs over 2,500 people, made up of local gas installers, retailers, distributors, merchants and training centres.

In 1997 the Northern Ireland Natural Gas Association (NINGA) was formed to represent the interests of such companies.

Incentives for change

Although the Department of Enterprise, Trade and Investment continues to recognise the benefits of natural gas, many NINGA members believe the Executive could and should be doing more to promote the importance of installing A-rated central heating boilers. The gas industry here has been installing

A-rated boilers for over 14 years and these are around 90 per cent efficient. To put this into context, many homes, irrespective of what fuel they use, are persisting with old costly boilers and in many cases these can be as low as 60% efficient. In these cases for every £1000 a householder spends on fuel around £400 of that spend is being lost straight away.

Members of NINGA visit around

100,000 households every year and many report that a customer’s enthusiasm to discuss the energy efficiency of their boilers is often tempered by what they see as a lack of government leadership and advice in this area.

The Executive’s focus on renewables remains important, as they will increasingly be part of the answer to providing a sustainable, diverse local energy market. However NINGA members believe that the Executive should be introducing initiatives that encourage homeowners to invest in a range of measures, including the installation of new high efficiency boilers, leading to proven financial and environmental savings.

Grant-aided schemes, for example, provide assistance in not only the capital outlay involved, but also in offering the customer the important reassurance that upgrading their home heating is the right thing to do for the long term.

Boiler scrappage scheme

In 2009 the UK Government introduced a boiler scrappage scheme across England and Wales that provided a £400 incentive to homeowners who wished to upgrade their current central heating boiler. 125,000 grants in total were allocated under this scheme in this year alone. It is our understanding that this scheme has now been rolled into the Green New Deal in Britain, which does not cover Northern Ireland.

In the absence of the Northern Ireland Executive being able to put in place a similar scheme here, in 2009 the gas industry partnered with the Energy Saving Trust to introduce a privately funded boiler scrappage scheme, for a number of months, which mirrored the UK Government grant. This led to unprecedented interest levels from local homeowners. This was a clear example that schemes do not have to be totally non-contributory, or tightly targeted to only specific members of society.

Since then other initiatives have been introduced by the Department for Social Development such as the boiler replacement allowance to tackle the most extreme levels of fuel poverty. Whilst recognising that these schemes impact at this extreme level, they do little to encourage the working poor (often home owners) to consider improving the efficiency of their homes.

VAT reduction on energy efficiency measures

One positive incentive available to householders throughout Great Britain and Northern Ireland is a reduced VAT rate of 5% per cent for householders who want to introduce energy saving measures in their home – such as the purchase and installation of central heating controls, draught proofing measures and solar panels.

Bizarrely, given the significant impact that installing a new central heating boiler has on central heating running costs and carbon emissions, this measure does not ‘qualify’ for the reduced VAT rate.

NINGA members continue to challenge why A-rated boilers are omitted from this taxation break. In pure financial terms this reduction would offer a considerable saving to homeowners and in turn offer them added confidence to invest in a measure that would have real impact in improving the efficiency, carbon emissions and thermal comfort of their home.

Jonathan Martindale is Business Development Manager at Phoenix Natural Gas and the current Chairman of the Northern Ireland Natural Gas Association. He can be contacted on 028 9055 5517.