Highclere Castle, film location for Downton Abbey.

Downton Abbey, the period drama about the twilight of the British empire, might seem an elegant world away from the plunging oil prices that have unnerved markets and the renewable energy industry.

But at Highclere Castle in Berkshire where the television series is filmed, the price of crude oil is having an ominous real-world effect on efforts to boost at least one type of green energy: wood-fired boilers.

A new age of wood-burning has quietly arrived in the UK in the past two years, thanks to a renewable heating subsidy scheme that pays households that switch to wood from oil or other fuels an average of £3,000 a year, and businesses substantially more. The government says it is a world first.

Nearly 10,000wood-fired heating systems have been installed under the scheme, up from 700 at the start of 2013, according to the energy department.

Poultry farms, hospitals, schools and historic homes have taken advantage of the programme, which also caught the eye of Lord Carnarvon, owner of Highclere, which has more than 200 rooms.

“We looked at installing a woodchip-based combined heat and power system about a year ago,” said Lord Carnarvon, explaining he paid £26,000 for oil for hot water and heating last year, and another £12,000 for electricity.

The new woodchip system would have cost just over £500,000 to install — partly because of the tricky nature of fitting it in a historic building — and provided much of the electricity and all of the hot water and heat for radiators.

Government subsidies, which last 20 years for businesses and seven for ordinary homes, would have offset the cost; and Lord Carnarvon was already a renewable energy convert.

Solar panels help power a mill at Highclere that processes oats for horses, and Lord Carnarvon estimates he has saved about £2,000 to £3,000 a year by switching to LED lighting.

The new bulbs light the castle’s Egyptian exhibition, which contains some of the antiquities collected by the 5th Earl of Carnarvon, who helped discover the tomb of Tutankhamun in 1922.

But as oil prices have sunk from $115 a barrel in June to less than $50 in January, so did the appeal of the woodchip system at Highclere.

Lord Carnarvon expects his oil bill to fall by about a third this year, so the woodchip plant is on the back burner for the moment.

“If oil prices were still heading up, we would definitely be looking into this more seriously, without question. It would make absolutely obvious sense,” he said.

“But it’s much more marginal when I think of what else I have to do.”

Other owners of historic homes who have taken advantage of the renewable heating subsidy to switch to wood heating say they do not regret the move.

“It’s a no-brainer,” said Viscount Mersey of the Bignor Park estate in West Sussex.

He installed a £75,000 wood heating system two years ago, which means he now pays about £9,000 a year for wood pellets instead of £12,000 for heating oil.

On top of those savings, there is nearly £11,000 a year from the renewable heat incentive subsidy scheme, which has so far paid out more than £100m to approved users.

“We’re still saving a huge amount of money,” said Viscount Mersey, adding that retail oil prices had not yet gone down as sharply as wholesale ones.

Falling oil prices have not yet dented demand for the renewable heat scheme, according to the energy department’s latest figures, but Richard Smith, chairman of the UK Pellet Council trade body, is keeping a close watch on events.

“A low heating oil price is certainly not helpful and we would be naive to expect no impact on sales, but in the long run the pellet sector is confident of continued growth,” he said.

The amount of wood pellets burnt for fuel in the UK has risen sharply from 32,000 tonnes in 2012 to about 150,000 tonnes last year, according to the Pellet Council.

And the subsidy scheme has been so successful it is spawning a homegrown industry of boiler makers, installers and wood transporters, said Mr Smith, who is also managing director of Verdo Renewables, a pellet-maker with plants in Scotland and Hampshire.

Like other plants, most of Verdo’s pellets used to be shipped to continental Europe, which has a long history of wood-fuelled heating.

“But 2014 was the first year we didn’t export anything because the local market had grown so much,” he said.

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