How can heat pumps grow their role in the heating and energy market?

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Arnold Marsh
5 years ago
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Delta Energy & Environment Ltd Registered in Scotland: No SC259964 Registered Office: 15 Great Stuart Street, Edinburgh, EH3 7TS, UK How can heat pumps grow their role in the

1 Delta Energy & Environment Ltd Registered in Scotland: No SC Registered Office: 15 Great Stuart Street, Edinburgh, EH3 7TS, UK How can heat pumps grow their role in the heating and energy market? Energy Managers Conference Slovenia, 15 th April 2014 Lindsay Sugden, Heat Pumps Research Manager, Delta-ee +44 (0)

Generation Smart Demand Networks Research

2 Delta Energy & Environment Demand Delta provides: Market expertise Commercial insight Strategy & tactics Energy Efficiency Photovoltaics Small Wind Micro-CHP Energy Services Electricity Storage Heat Pumps Electric Vehicles HEM Clients: Energy companies Manufacturers Finance sector Policy makers CHP Generation Smart Demand Networks Research Services: Heat Pump Research Service Home Energy Management Micro-CHP Microgen Insight

3 Agenda Heat pumps in the European heating market Growing role for heat pumps in the energy market Overcoming market barriers

4 Agenda Heat pumps in the European heating market Growing role for heat pumps in the energy market Overcoming market barriers

speed of market growth Growing the European heat

Where might growth come from? other emerging HPs?

~700,000/year Hybrid HP Domestic Hot Water HP

5 speed of market growth Growing the European heat pump market European heat pump market standing still Where might growth come from? other emerging HPs? Niche market HP using natural refrigerants Gas HP ~700,000/year Hybrid HP Domestic Hot Water HP Air/Water HP Brine/Water & Water/Water HP & beyond

Heating appliance sales per year Heat Pumps Heat Pumps in the wider heating market: Germany HEATING APPLIANCE SALES PER YEAR CENTRAL SCENARIO Low Carbon Appliances 270,000 700,000 130,000 Low Carbon

6 Heating appliance sales per year Heat Pumps Heat Pumps in the wider heating market: Germany HEATING APPLIANCE SALES PER YEAR CENTRAL SCENARIO Low Carbon Appliances 270, , ,000 Low Carbon Appliances ASHP GSHP Gas boiler plus solar thermal Fuel cell Gas heat pump Hybrid heat pump oil boiler Biomass Micro-CHP Hybrid heat pump gas boiler ASHP GSHP

7 Heating appliance sales per year Heat Pumps Heat Pumps in the wider heating market: UK HEATING APPLIANCE SALES PER YEAR REFERENCE SCENARIO 400, million Low Carbon Appliances 42, Gas boiler plus solar thermal Fuel cell Gas heat pump Hybrid heat pump oil boiler Biomass Micro-CHP Hybrid heat pump gas boiler ASHP GSHP

8 Hybrids An increasingly crowded market Overview of market participants

9 Heat Pumps in the Commercial / Industrial Sector Many heat pump technology options ground-source electric installed in a wide range of sectors air-source electric gas absorption gas engine

10 Agenda Heat pumps in the European heating market Growing role for heat pumps in the energy market Overcoming market barriers

11 Heat pumps in the wider smart energy market Enablers of communication between appliances and utilities moving forward e.g. smart meter roll-outs heat pump is now one of many possible smart appliances in buildings

The energy industry is already increasingly

business model is dead Sam Laidlaw, CEO, 2010

heat, including will focus on delivering

power plants recognise synergies between

12 The energy industry is already increasingly engaged in the demand side The old utility business model is dead Sam Laidlaw, CEO, 2010 Utilities are already active in smart electric heat, including will focus on delivering service-based business models and virtual combination of distributed assets. will invest in special products such as virtual power plants recognise synergies between national and local management of distributed energies source: Utility investor presentations

13 Smart Heat Pumps can provide flexible demand which could create value to many different energy industry players Paying for balancing services Load to trade on balancing / other markets Energy cost savings / other benefits? System Operators Distribution Network Operators Aggregators Energy Retailers Customer HP Avoided cost of grid upgrade Profit from energy market Increased product sales?

heated buildings independent aggregators software companies HEMS companies smart energy services platform allowing utilities to improve smart energy management solutions for Home Energy

14 New players increasingly engaging in the HP market? Bringing opportunities (& new competition?) solutions for the management of large numbers of micro-generation assets like heat pumps solutions for the aggregation and activation of demand response load management for electrically heated buildings independent aggregators software companies HEMS companies smart energy services platform allowing utilities to improve smart energy management solutions for Home Energy Management save energy, heating costs and environment bring you comfort and peace of mind solutions for Smart Home, Smart Enterprise, Smart Grid including enabling heat pump connectivity Home Energy Management solutions, simple, easy to understand heat pump controls and remote diagnostics

15 Agenda Heat pumps in the European heating market Growing role for heat pumps in the energy market Overcoming market barriers

Challenges for the heat pump market: End-user perception People don t like change?

A big concern is the upfront cost finding the capital would be difficult if someone said they d put it in for free,

I don t know how safe it is I d like to speak to somebody who has had it installed Lack of awareness / information?

16 Challenges for the heat pump market: End-user perception People don t like change? I don t really see the need to be changing my system [my gas boiler] is just very effective Too expensive? A big concern is the upfront cost finding the capital would be difficult if someone said they d put it in for free, I d say no problem, do it. Lack of trust? I don t know how safe it is I d like to speak to somebody who has had it installed Lack of awareness / information? I want information from someone who does not have a vested interest in selling in [I would want] documented evidence that these [fuel bill] savings can be delivered Source for quotes: Delta-ee Microgen Insight Service customer research

Challenges for the heat pump market: Heating, energy and building industry perception

to do the training Not core business for heating companies Heat pumps are a very

we choose an unknown technology when we can more quickly design a boiler solution which

Specifier or for energy companies Our commercial heating business is so busy installing

17 Challenges for the heat pump market: Heating, energy and building industry perception No customer pull our customers are not asking for heat pumps so there s no motivation to do the training Not core business for heating companies Heat pumps are a very disruptive, expensive technology Boiler company Installer Fear of the unknown Why would we choose an unknown technology when we can more quickly design a boiler solution which we know works? Specifier or for energy companies Our commercial heating business is so busy installing boilers that they have limited time to try to sell Heat Pumps UK utility Source for quotes: Delta-ee research with commercial HP industry in the UK, Germany and Italy

expert Find ways to reduce the perceived risk of a new technology?

because of the heat contracting offer from local utilities Major European Heat Pump Manufacturer 6-8%

incentive to ensure the system works optimally ESCo expert Hybrids are the technology which will really

18 What is the answer? Removing the risk of poor performance is key to gaining consumer confidence in a new heating system ESCo expert Find ways to reduce the perceived risk of a new technology? We are selling a lot of heat pumps for multi-family New ways homes to engage in Switzerland customers? because of the heat contracting offer from local utilities Major European Heat Pump Manufacturer 6-8% increase in energy efficiency can be achieved in a real ESCo as there is an New business models? incentive to ensure the system works optimally ESCo expert Hybrids are the technology which will really unlock the New technologies? existing building market for heat pumps Major European Heat Pump Manufacturer Utilities have been very important in creating a stable German New heat sales pump channels? market they are raising the customer awareness of the heat pumps RWE

19 How can heat pumps grow their role in the heating and energy market? For heat pumps to grow their market share, they will have to open up new sectors of the heating market, and bring value to the energy market. Ways to support this Emerging heat pump technologies New sales channels New business models

Too many technologies and not enough infrastructure: How do we reach sustainability?

Delta Energy & Environment Ltd Registered in Scotland: No SC259964 Registered Office: 15 Great Stuart Street, Edinburgh, EH3 7TS Too many technologies and not enough infrastructure: How do we reach sustainability?