Sweaty Europe can kill two birds with one pump

Daikin Industries

07/08/2023 09:44

(The author is a Reuters Breakingviews columnist.  The opinions
expressed are her own.)
    By Pamela Barbaglia
       LONDON, Aug 7 (Reuters Breakingviews) -    Europe’s
sweltering summer has focused attention on its building stock.
Responding to the continent’s 40 degree Celsius (104 Fahrenheit)
temperatures means cutting carbon emissions from gas heaters,
while rolling out ways to efficiently cool residences and
offices amid an “era of global boiling”. What may be less
immediately obvious is that heat pumps are the best way to do
both. 
    Continuing to burn gas in winter and use inefficient
air-conditioning units in summer is unsustainable. The former
helps explain why heating and powering buildings account for 10
billion tonnes of carbon dioxide emissions annually, according
to the International Energy Agency, or about a quarter of the
global total. The electricity required to cool a more populous
planet by 2050 during increasingly hot summers, meanwhile, could
nearly triple to 5,800 terawatt-hours, the IEA reckons. That’s
double current demand in the entire European Union, at a time
when power demands from electric vehicles are already set to
soar.
    Reflecting their name, heat pumps are mostly known for their
warming abilities. Even on cold days they operate by efficiently
pulling in what heat exists outside from the air or the ground
and using that to heat a special refrigerant liquid into gas.
When that’s compressed, it warms up more. Pumping what results
round the building raises the temperature to a comfortable
level.
    By using heat pumps, the IEA reckons it could hike the
number of homes using zero-carbon electricity for heating from a
fifth to a half of the total by 2050. That would slash building
emissions considerably. But the real magic bullet is that the
same machines can be used to adapt to climate change as well as
mitigate it. That’s because an air-to-air heat pump is identical
to a conventional air conditioner, thus allowing it to cool
buildings as well as heat them. When cooling, pumps suck in heat
from the air inside and release it outside, working like a
refrigerator. 
    The catch is implementation. To fit with efforts to limit
global warming to 1.5C above pre-industrial times, monthly
global heat pump installation needs to jump from 1 million today
to 14 million by 2050, the IEA reckons. In Europe, currently
only 16% of residential buildings use heat pumps, according to a
study from the European Heat Pump Association (EHPA) based on
data from 21 countries including non-EU Britain and Norway, with
20 million heat pumps installed. Despite a record 3 million
units sold last year, another 60 million units are needed by
2030 to meet the bloc’s net-zero goals. 
    GREEN SUBSIDY RACE
    According to the EHPA, a heat pump is around 30% cheaper
than a fossil-fuel boiler over its lifetime, and those equipped
with them have saved 262 terawatt-hours of energy since 1996.
But the upfront costs are much higher. On average buying and
installing a heat pump could cost up to $13,000 compared to
$2,500 for a gas boiler. For advanced air-to-water pumps, which
heat water as well as space, the cost of installation is even
higher. 
    The obvious step is for governments to extend subsidies. EU
member states such as France, Germany and Italy have already
introduced grants and tax savings to speed up the transition.
That, plus sweltering temperatures, is having an effect. Heat
pump sales rose 35% in Italy last year, making it Europe’s
second-biggest marketplace after France, EHPA data shows. Demand
in Poland also more than doubled.
    Yet the outlook is far from uniformly positive. In Germany,
a bill that bans new oil and gas heating systems from 2024 has
triggered a fierce debate about decarbonisation, with critics
arguing that the investment costs for climate-friendly solutions
like heat pumps will overburden homeowners and tenants. The
fierce backlash over the ruling, dubbed the “heat hammer”,
plunged Olaf Scholz’s coalition government into its worst crisis
since taking office in 2021. 
    Meanwhile, plenty of central and eastern European EU member
states lack the fiscal heft to extend subsidies, so Brussels
needs to find a way to jointly extend tax breaks to cut heat
pump installation costs. Other players like Britain are not
going far enough. France installed more than 621,000 heat pumps
last year, the EHPA says, yet the UK only managed 55,000 – miles
off its target of 600,000 devices annually by 2028.    
    MANUFACTURING CHALLENGES
    Another risk is that Europe goes down the path that the
United States has already: a widespread adoption of cheap but
inefficient air conditioners that aren’t heat pumps. The cost of
a portable air conditioning unit is in the hundreds of euros
rather than the thousands, but its energy consumption is three
times higher. That’s because heat pumps generate more cool air
by volume than the energy it takes to run them. The U.S. has at
least seen the error of its ways: as of 2020, nearly 18 million
U.S. households were equipped with heat pumps, up 50% from 2015,
according to data from the U.S. Energy Information
Administration. President Joe Biden’s Inflation Reduction Act
(IRA) should see that figure rise significantly.
    Heat-pump makers are admittedly grappling with the global
chip shortage, higher energy costs and labour shortages. And
more heat pumps don’t necessarily mean more domestic European
manufacturers. In Germany, thousands of mid-sized Mittelstand
family-owned manufacturers like Stiebel Eltron and Viessmann,
which recently sold its core business to U.S. air-conditioner
maker Carrier Global  CARR.N  for 12 billion euros, are
struggling amid fierce competition from the likes of Mitsubishi
Electric  6503.T  and Daikin Industries  6367.T . These Asian
players are rapidly gaining market share, although their
European manufacturing facilities do at least employ local
workers. 
    None of these stumbling blocks should stop determined
governments. Temperatures will keep rising. The sooner sweaty
Europeans are able to combat them with their pumps, the faster
they will get rid of gas boilers, advancing Europe’s race to
meet its net-zero goals. Every heatwave will then have a silver
lining.  
    Follow @pamela_msg on Twitter
    
    
    CONTEXT NEWS
    Sales of heat pumps rose by well over a third in Europe last
year after government support and soaring fossil-fuel prices
boosted uptake of the technology, according to the European Heat
Pump Association (EHPA). So far 20 million heat pumps have been
installed across 21 European countries. To meet net-zero targets
by 2030 EHPA estimates Europe would need 60 million more heat
pumps installed by 2030. 
    U.N. Secretary-General António Guterres warned on July 27
that the era of global warming has ended and “the era of global
boiling has arrived” after scientists said July was the world’s
hottest month on record.
    Air-conditioning sales have soared in southern Europe as
people are coping with extreme heat. Italian consumer
electronics retailer Unieuro, which has more than 500 shops
across the country, said sales of air-conditioning products
doubled in the week to July 21 compared to the same week last
year. El Corte Inglés, one of Spain’s largest department store
chains, said that by mid-July it had already sold 15% more units
than it did last year by the end of August.

    <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
Europe is warming to heat pumps    https://tmsnrt.rs/3qi61yn
European shoppers hunt for heat pumps    https://tmsnrt.rs/3OKiG6p
    ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
 (Editing by George Hay, Oliver Taslic and Streisand Neto)
 ((For previous columns by the author, Reuters customers can
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SIGN UP FOR BREAKINGVIEWS EMAIL ALERTS https://bit.ly/BVsubscribe
 | pamela.barbaglia@thomsonreuters.com; Reuters Messaging:
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