Heat pumps are a truly marvellous machines. Instead of combusting fossil fuels to generate heat, they transport heat from the air, ground or water into your home. The technology has already been dubbed as ‘the boring solution to the climate crisis’ and at the same time it can also help Europe to pivot from gas boilers and therefore move away from Russian gas imports (as well as the energy dependency that comes wrapped in it).
The continent’s largest gas consumption setting – residential heating sector – accounts for more than 40% of total gas usage. That’s a bluntly obvious over-reliance and that’s why various policies are being introduced at the EU and individual country level to change just that. Add to it surging gas prices, environmental impact, pressure from the public and political commitments to move away from energy imports from a terrorist state that Russia is and has been for decades, and we have an environment for a change. Some countries have already introduced an end date for installing new gas boilers. Austria, for example, recently legislated a gas and oil heating ban in new buildings and also the sale of replacements for existing buildings from next year, accelerating the policy by two years. “Every gas boiler that we get rid of is another step out of dependency on Russian gas,” Leonore Gewessler, Austria’s climate protection minister, said in a June 13 statement. “Every apartment and house we can heat with sustainable heating systems makes us more free and less susceptible to blackmail.”
Asked about the prospect of EU wide ban, a European Commission spokesperson noted that existing legislation gives member states the power to curb the use of gas in heating. Legislation includes the EU’s “Fit-for-55” climate strategy and REPowerEU, its plan to shift away from Russian gas imports. Emissions standards in buildings are covered by the Energy Performance in Buildings Directive, which was revised in December 2021. Member states are urged to end subsidies for fossil fuel boilers by 2025 at the latest and encouraged to redirect support programs to heat pumps instead. National energy efficiency requirements for new buildings also must meet zero-emissions standards before 2030, the commission spokesperson said. Major renovations of existing buildings should be used to connect households to efficient district heating systems in densely populated areas. Alongside such measures, member states are instructed by the Fit-for-55 and REPowerEU energy policy packages to set stricter limits for heating systems, implying 2029 as an end date for stand-alone fossil fuel boilers and relegating these boilers to the bottom of the energy class. “Such … measures will incentivize the roll-out of heat pumps and will contribute to the goal of doubling the rate of installation of heat pumps,” the spokesperson said.
There is also a growing business case for heat pumps. The European Commission could go further on gas heating than it does in REPowerEU, according to Jan Rosenow, principal and European program director at the Regulatory Assistance Project, a think tank. “There’s going to be resistance from some member states. It’s a difficult policy proposal. But it would send the right signal,” Rosenow said in an interview.
The EU has recently sent a signal just like that to the auto industry and consumers when it announced an end date for the sale of new fossil-powered cars by 2035. An analogous message to the heating sector would provide clarity to invest, Rosenow said.
While wind and solar have become cost-competitive alternatives to fossil-based power generation, the business case for replacing a gas boiler with an electric-powered heat pump so far has not appeared in most households’ calculations. Gas has been rather cheap when compared to electricity for the last 10 years, partly because of tax structures that added renewables subsidies to a consumer’s electric bill. “This has now clearly changed; the business case is now a lot stronger,” Rosenow said.
To create a lasting advantage for heat pumps, however, a policy package including gas bans, reform of energy taxation and public subsidy programs for heat pumps would be needed, Rosenow added. “We need concerted action. … The commission has done this already for hydrogen and batteries, and we’ve called on them to do the same for heat pumps,” Thomas Nowak, secretary-general of the European Heat Pump Association, said in an interview.
A record 2.2 million heat pumps were sold in 2021, bringing the total stock to 17 million. Sales are growing fastest in Poland, Germany and the Netherlands, said Nowak. However, gas boiler installations are still much larger – more than 4.3 million were sold in the major markets tracked by the Association of the European Heating Industry in 2020. Doubling EU installation rates of heat pumps from the current trajectory would save 2 billion cubic meters of gas use within the first year, the International Energy Agency said in its 10-point plan to reduce Europe’s reliance on Russian gas imports. The total additional investment required for this would be €15 billion, the International Energy Agency said. Combined with policy and financial incentives, heat pump installations in existing buildings should be coupled with upgrades to the house itself to maximize energy efficiency gains, the agency added.
Gas lobby group Eurogas said that although heat pumps and district heating are important in cleaning up the sector, variations in the building stock and energy infrastructure across the EU will challenge their rollout. “Limiting the number of solutions … would be a big mistake, slow down decarbonization and make it more expensive,” Bronagh O’Hara, spokesperson for Eurogas, said in an email. Decarbonized gases also should be considered in a systems-based approach, O’Hara added.
Deploying heat pumps presents challenges as well. Microchips needed to operate fans, pumps and the controllers for the heating systems are in short supply globally. “Scarcity is affecting both components and final products. This limits further growth, while at the same time demand is skyrocketing,” the European Heat Pump Association’s Nowak said. The skyrocketing demand and issues that come with it can be heard in comments coming from Berlin. “500,000 newly installed heat pumps per year from 2024 is a strong commitment and a strong signal that comes from today’s heat pump summit,” said Germany’s Robert Habeck, minister for economy and climate, on 29 June. “From 01.01.2024, every newly installed heating system is to be powered by 65 per cent renewable energies if possible. This makes it clear that we also need more heat pumps quickly for this purpose, which is precisely what we are now tackling together,” he added. The heat pump makers thus communicated their wish-list to the German government: Better incentives for producing and installing heat pumps, as well as a shared push to have skilled workers in place. Despite a general shortage of skilled workers, trade publications estimate a need for an extra 100,000 installers. Tripling the number of installed heat pumps will require massive imports, for which third-country manufacturers are already gearing up, or a significant uptick in domestic production.
In addition to other electrification drives, such as the proliferation of electric cars, the rollout of heat pumps will also compound Europe’s electricity usage in the coming decades. A scenario of 50 million to 70 million heat pumps across Europe is possible, Ruby said, but we “should be honest and say that will come with some grid reinforcements,” particularly on medium-voltage grids. Therefore, alongside the continuous implementation of heat pumps, especially for the EU’s residential heating sector, we also have to consider further improvements for the green electricity generation.