New report reveals heat pump sales globally rose 15 per cent in 2021 and are now doubling year on year in some markets
Global sales of heat pumps are set to hit record levels again this year, as demand for the low carbon technology soars in key markets around the world.
That is the headline prediction from a new special report from the International Energy Agency, which details how heat pumps have become a key technology in the response from governments and businesses to the global energy supply crunch that has sent fossil fuel costs soaring in the wake of Russia's invasion of Ukraine.
The report - titled The Future of Heat Pumps - details how the heat pump market has been growing strongly in recent years, driven by falling technology costs, policy support, and growing confidence the technology can work in a wide range of climates. Global heat pump sales rose by nearly 15 per cent in 2021, double the average of the past decade, led by the European Union where they rose by around 35 per cent, according to the report.
However, sales in 2022 are expected to rise sharply again this year in response to the soaring energy prices and energy security packages launched by governments in response to Russia's weaponisation of fossil fuel supplies. The report said some countries in Europe saw heat pump sales double in the first half of 2022 compared with the same period last year. There is no sign of the market slowing down as more grant schemes and policy measures such as bans on the installation of gas boilers in new homes come into effect.
As such, the IEA report predicts annual sales of heat pumps in the EU could rise to seven million by 2030 - up from two million in 2021 - if governments succeed in hitting their emissions reduction and energy security goals.
The IEA also predicts that a rapid roll out of heat pumps would have the desired effect of slashing both gas imports and carbon emissions. According to the report, heating buildings accounts for one-third of EU gas demand today and heat pumps could reduce that demand by nearly seven billion cubic metres (bcm) in 2025 - roughly equal to the natural gas supplied via the Trans Adriatic Pipeline in 2021. The annual gas saving would grow to at least 21 bcm by 2030 if EU climate targets are met.
"Heat pumps are an indispensable part of any plan to cut emissions and natural gas use, and an urgent priority in the European Union today," said IEA executive director Fatih Birol. "The technology is tried and tested, even in the coldest of climates. Policy makers should be putting their weight behind this technology that is witnessing unprecedented momentum at the moment. Heat pumps will be central to efforts to ensure everyone can heat their homes this winter and next, to protect vulnerable households and businesses from high prices, and to meet climate objectives."
The report stresses that heat pumps higher efficiency means they are typically significantly cheaper to run than gas boilers, with households that switch to heat pumps seeing bills call by around $300 in the US and $900 in Europe.
However, it warns that the higher upfront cost of heat pumps means policy support is currently needed to help drive demand for the technology and bring down costs over time. The report details how financial incentives for heat pumps are already available in over 30 countries, which together cover more than 70 per cent of heating demand today. But it warns policy support needs to be expanded and sustained in many markets to ensure the heat pump industry can start to exploit economies of scale, build out its skills base, and address potential technical challenges, such as how to manage the resulting increase in electricity demand.
It argues that with an effective policy regime in place heat pumps are set to "become the main way of decarbonising space and water heating worldwide".
"The IEA estimates heat pumps have the potential to reduce global carbon dioxide (CO2) emissions by at least 500 million tonnes in 2030 - equal to the annual CO2 emissions of all cars in Europe today," the report states. "Leading manufacturers are seeing promising signs that today's momentum and policy support could put the industry on a trajectory that triples sales by 2030 - and they have accordingly announced plans to invest more than $4bn in expanding heat pump production and related efforts, mostly in Europe."
It also highlights how significant opportunities exist for heat pumps to provide low-temperature heat in industrial sectors, especially in the paper, food and chemicals industries. In Europe alone, 15GW of heat pumps could be installed across 3,000 facilities in these three sectors, which have been hit hard by recent rises in natural gas prices, it said.
Overall, the report calculates the additional global upfront investment in heat pumps required to reach announced climate pledges stands at $160bn annually by 2030. But these costs are outweighed by the economy-wide savings on fuel, especially if energy prices remain close to their current levels.
"All the pieces are in place for the heat pump market to take off, reminiscent of the trajectory we have seen in other key climate technologies like solar PV and electric vehicles," said Birol. "Heat pumps address many of policy makers' most pressing concerns on energy affordability, supply security and the climate crisis. Policy measures are in place today, but they need to be reinforced urgently to allow heat pumps fulfil their significant economic and environmental potential."
The report came on the same day as Birol gave an interview to the Guardian, where he criticised those commentators who have argued the 1.5C temperature goal set out in the Paris Agreement is now out of reach.
"I find the emerging chorus of this unusual coalition of people saying 1.5C is dead factually and politically wrong," he told the newspaper. "They are jumping to conclusions that are not borne out by the data… They are making a mistake. Proponents of the existing energy systems will be the beneficiaries if the obituary of 1.5C is written."
* This article was originally published here