Heat pumps currently make up a small fraction of the European heating sector, with gas supplying 85% of domestic boilers in Europe. However, 9.3 million heat pumps have been sold in Europe to date, with the market growing at 10% per year – meaning that the market could double in size within 5-6 years. Keeping on target for a realistic emissions-free residential heating sector by 2050, EHPA data shows that an additional 54 million heat pumps would replace gas imports from Russia – although many barriers to widespread adoption remain.
Most energy plans going to 2030 see heat pumps as playing an important role in the market for low-carbon domestic heating, cooling and hot water; mainly due to the need to reduce the use of gas and primarily to increase the efficiency of electricity which remains the primary renewable energy source. Coupled with district heating, biogas and renewably produced gases and biomass boilers; the residential heating market could decarbonise in much the same way as Sweden, where gas makes up only 2% of new installations. Realistically, gas demand is expected to become more renewable, although many experts agree that solar PV combined with heat pump technology and battery storage provides the most cost effective and easily replicable solution for residential heating and electricity demand over the long term.
In understanding heat pumps, it is important to become acquainted with the physical properties of the technology; as this defines its abilities and constraints within the many use cases it can be applied. First of all, heat pumps are an effective means of heating because rather than energy being created, it is being moved from one place to another. This means that 1-5 times the initial energy consumed can be supplied as heat through a process of heat transfer. This ‘coefficient of performance’ is made using refridgerants which transfer any temperature above the evaporation point of the refridgerant from one point to another, similar to a household refridgerator in reverse. The heat pump accumulates the difference in temperature between the refridgerant and the ambient air temperature, and brings this temperature difference to the heat sink, where it is distributed by fan or used to heat water.
The two main types of heat pumps by market share are monobloc air-water heat pumps and air-air heat pumps (sometimes called ductless mini-splits because the heat is transferred via pipe rather than duct, and the system is separated into an outdoor fan and indoor distributor). Air-air heat pumps are most easily installed in modern houses either in a central living area, preferably with an open plan layout, or an area of the house that does not receive adequate heating. The limitations of the heat pump are obvious; it will not heat at high temperature meaning that for most houses one heat pump will not heat the whole house. A single point heat pump is designed to run for extended periods at low cost, and works best with a well insulated and extremely air-tight house, with figures showing that Scandinavian countries have seen an increased uptake of heat pumps due to better insulation; and as such heat pumps can be proven to operate well at low temperatures. However, because a heat pump will supply hotter temperatures in warm-to-temperate climates, as well as working as a conventional air conditioner to supply cooling, figures show that France, Italy and Spain are seeing much higher installation growth over the past 5 years, with figures for Europe overall reaching almost 1 million units in 2015. This is also helped by favourable regulations in some countries such as France, where the energy transition credit (CITE) may reimburse up to 30% of the cost for certain types of energy renovation work, such as heating improvements or insulation, as well as zero-interest loans.
[media-credit name=”Source: German Federal Ministry for Economic Affairs and Energy; EHPA Market Development 2015″ align=”alignnone” width=”1024″][/media-credit]
In colder climates where whole-house heating is required via a conventional central heating system, the situation becomes more complicated. First of all, these systems are relatively expensive and are not guaranteed to supply the full heating demand during the winter. This means that a supplementary system is required to kick in when temperatures really plummet. The savings in such a scenario are the main draw for homeowners, as air-water systems will reduce bills by 60% for most of the year. However, when temperatures are below freezing, the coefficient of performance will drop, producing corresponding low temperatures. To minimise use of direct electric water heating in the hot water tank, extremely tight insulation is required, as well as large-area low-flow aluminium radiators, and potentially a separate hot water tank. The ideal scenario for relatively modern buildings with an effective thermal envelope would be to use a gas-hydrid system, in order to avail of the lower cost of gas rather than electric heating as the backup; and such systems are not much more than air-water with electric heating as backup. Overall, having direct electric as the backup can render many air-water heat pumps cost-ineffective, as costs will rise sharply in colder temperatures. Needless to say, an air-water heat pump is expensive to install, and requires careful planning; although many incentive schemes throughout Europe could reduce the initial financial burden – and using gas as supplemental/hot water heating will reduce overall heating costs considerably.
Further uptake of systems such as stand-alone hot-water heat pumps and the use of air-air (mini-split) systems to provide greater flexibility while reducing costs are seeing corresponding growth in market share in Europe.
In addressing the need to decarbonise heating in the EU, Thomas Nowak of the European Heat Pump Association gives a number of recommendations and insights, highlighting the promotion of higher-performing technologies by EU policy; going beyond the recently introduced Ecodesign Directive regulating gas boilers. “Only the best systems should be rewarded to quickly unleash their full potential”. He goes on to explain that “the operating cost of fossil solutions are artificially low. On top, electricity is subject to much higher taxes and levies than fossil energy – further distorting the market.” Given the growing pressure to reduce fossil fuel subsidies, with the G7 declaring an end to inefficient subsidies by 2025, and now a recent call to the G20 by investors and insurers to phase out subsidies by 2020, gas prices are likely to rise. However, he explains that in order to promote non-fossil heating technologies, deterents to fossil energy systems must be introduced, such as mandatory CO2 emissions targets for buildings at some predefined date, or the use of an ETS-style system which promotes no-emissions solutions.
However, he also explains that as the upfront costs for zero-emissions options are higher, it will require a few doublings of market size before economies of scale balance this cost. Before then, ‘signature ready’ standard financing for heating systems or insulation options (such as the loan system in France) that may take many years to pay off should be given a higher priority at EU level.
“We need to become serious. While the required change will not happen overnight, it will be important that policy makers signal to the market that certain solutions are not compatible with the 2050 goals.”
[media-credit name=”2014 heat pump sales Europe; 2013 heat pump stock, by country (in TWh). Source: EHPA” align=”alignnone” width=”1022″][/media-credit]
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