Renewable Energy Installer October 2015 | Página 8

News: Profile
Market forces: Heating oil’s recent and
dramatic fall in price is fully offset by
renewable energy’s price transparency
and predictability, says Simon Cross
of The Wood Heating Company and
Geowarmth’s John Withers
What plummeting oil prices mean for renewables
Low fossil fuel prices have historically made life difficult for solar, wind and
biomass installers, so why are two North East renewable energy companies
unconcerned about the current trend?
n August this year the price of
crude oil fell below $50 a barrel,
the lowest prices we have seen
since 2009. A litre of heating oil
currently costs less than 32p – a
stark difference from three winters ago when
heating oil cost up to 99p per litre. While
homeowners can rejoice over this reprieve,
what about renewable energy industry?
“The overwhelming majority of our
projects are heating schemes within the rural
community,” says Simon Cross of The Wood
Heating Company.
“Rural fuel poverty is a subject which
receives little media coverage, but for a
typical 3-bedroomed rural cottage the
expenditure on oil has until recently been up
to 60 percent higher than the cost of heating
a similar property in an urban area using
natural gas. The volatility of oil prices makes
budgeting very difficult for those living in rural
communities who depend upon oil for heat.”
He adds: “Our chosen renewable
technology, biomass, helps people to jump off
the fossil fuel price rollercoaster. The price of
pellets has historically been remarkably stable,
changing very little over the last 10 years.
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8 | www.renewableenergyinstaller.co.uk
There are also offers available to fix the price
for the next five years; I can’t imagine many
oil companies offering that!”
But what about other renewable
technologies? John Withers, managing
director at Geowarmth, which installs solar
PV, heat pumps and biomass, says: “The
world of energy has changed. For a start,
oil does not compete with solar power, they
perform different roles. When we price a
solar installation you know exactly what the
upfront costs will be and the fuel itself is free,
providing energy security for homeowners.
“Secondly, plummeting oil prices show
just how unpredictable the global cost of
fossil fuels can be – and the UK has no control
over that volatility. It is one of the many
reasons why it makes more sense to make the
transition from fossil fuels to renewables.”
According to a number of industry
analysts, the price of oil is currently below
the cost price producing countries require in
order to balance their budgets, which in itself
is unsustainable in the long term. Simon Cross
continues: “The Wood Heating Company have
been around for more than 30 years, and over
this time we have seen oil prices rise and fall
constantly – it is an undesirable feature of
fossil-fuel markets.
“What this sudden dip may well do is
to remove many of the recent influx of new
companies who have entered the market
thinking biomass was the next renewables
goldmine after the solar PV Feed-in Tariff
dropped so dramatically a couple of years ago.
As these new and inexperienced installers
leave the market in search of the ‘next big
thing’ we will hopefully see standards within
the industry improve again.”
Our chosen renewable
technology–biomass–helps
people to jump off the fossil
fuel price rollercoaster
The common denominator of plummeting
fuel prices is the extreme lack of stability or
predictability. No-one can tell how long oil
prices will stay so low. This is precisely why
homeowners should go green with confidence,
and why such dramatic fluctuations only
serve as an advantage to installers, who offer
stable pricing and energy security.