Decarbonization and Role of Heat Pumps

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Low carbon economy

• Global Push towards a Low carbon economy

• Leading to transforming global power sector

• Significantly alter the business models of those

utilities operating within in it

• Core megatrends for Power industry

✓ Shifting consumption patterns via IoT / AI

✓ Cleaner electricity generation

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Power Megatrend to 2050: Winners in Ecosystem

• Manufacturers and Installers of distributed generation and energy IoT equipment

• Energy Management software providers

• Cyber security service providers

• Renewable energy developers

• Providers of clean energy technologies

• Companies working with financial products targeted for the Low Carbon economy

• Energy efficiency solution providers

• Battery storage tech companies

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UN COP21 [Reduce green house gases]

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Shifting electricity consumption factors– Low carbon transport

Spotlight on battery storage

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Ref: BEIS Energy and emissions projections 2018

Grid Carbon Factor of Electricity – Steadily decreasing

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What does Heat Pump offer - Growing role in Low carbon heating

1. When we apply up-to-date carbon factor for electricity, heat pumps already provide substantially lower carbon

heating than gas or direct electric heating

2. Can provide Low carbon affordable heat ; if “Efficiency of heat pumps is better understood by the building

industry” [Link]

3. NEDO project

4. Efficient heat pumps offer cost competitive heating

5. Refrigerant used in next gen heat pumps: low GWP

6. Heat pumps can have the advantage of being ‘smart grid’ ready – they represent a major demand side

management opportunity. Example of Hybrids used in FREEDOM project

7. Offers revenue generation possibilities via higher flexibility : Can help shift the time of energy consumption

8. Effective interaction with smart devices like batteries, solar PV / switch to cheapest supply; peer-to-peer trading

Key Words: SMART, CARBON NEUTRAL, FIT FOR FUTURE, ECONOMICALLY AND SOCIALLY SUSTAINABLE

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Specifying Heat Pumps (HPs) to “Strength of Product”

• Designing HPs to work at the lowest practical flow

temperatures to deliver highest efficiencies

• DHW, increase storage volume not reheat capacity

• Not designing a Heat pump as if it were a boiler

• Use the energy efficient features built in a heat pump

• Ensure Manufacturers “golden rules” are followed:

Min water volume / Min flow rate / outdoor unit airflows

• Design for the correct ΔT for HPs typically 3–8 deg C.

• Having realistic expectations on COPs achievable

• Co-ordination and Responsibility at installation phase

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Network Innovation Allowance Project

Project Aim.

❑ Evaluate Hybrid Heating Systems

❑ Demonstrate Smart, lowest cost and low carbon ways to heat

homes

Stakeholder Benefits.

❑ Homeowners : Project gave a chance to

▪ Reduce their heating bills

▪ Reduce their carbon emissions via Smart Controls

managed via Smartphone App

❑ Gas Network : Use of renewable electricity supported whilst

gas met peak heat demand

❑ Electricity Network : Network reinforcement potentially thus

reducing cost and disruption

❑ Overall : Step towards delivering Affordable, low carbon,

secure future energy system

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Summarising - Main factors influencing Heat Pump Market

0.9

0.8

0.9

0.8 0.8

RHI tariffs

Assignment of

rights

Eco with

Utilities

involvement

Oil priceBuilding

Regulations

Clear

government

position towards

renewables

Social housing

recovery

Product

awareness

❑ Strong demand for energy growth and inadequate supply

▪ Increased demand from electrification of transport and heat

▪ Closure of fossil generation and nuclear

▪ Spare capacity

▪ Greater challenges in balancing demand

❑ A shift for off-grid households away from conventional oil-fired heating to

heat pumps. Around 3.6 million homes in England and Wales are currently

off the mains-gas grid.

❑ There are currently around 900,000 homes in the UK with solar PV panels

installed. PV and heat pumps can be seen together as complementary

technologies.

❑ Upfront payment to offset capital cost is absolutely essential. Third party

ownership of RHI, such as the recently announced ‘Assignment Of Rights’

may help supporting the market but under conditions that will encourage

serious investors rather than organisations looking for a quick profit.

Currently , only the Assignment of Rights is in place that allows to

effectively turn RHI payments from a 7 years spread return on investment

to the one-off supportive payment at the moment of purchase.

❑ Building Regulations, positively impacting the improvement of fabric.

Note: 0.1 is rated low as a factor impacting the market1.0 is rated high as a factor impacting the market

Main factors of influence to

the future heat pump market

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Are New Business models required to support Innovation and new technologies ?