Are heat pumps and park heat the future?
The UK Government’s 2050 target to reach net zero greenhouse gas (GHG) emissions requires big changes to the way we generate and use energy. The current road to zero focuses on wind power, electric vehicles and tree planting but the huge task of decarbonising heat is often ignored.
Today only 4.5% of buildings in the UK are heated from a low carbon source – and this needs to increase dramatically.
Large amounts of the low carbon heat we need can be provided by heat pumps in public green spaces, a resource not widely investigated. This document shows expected trends in decarbonising heat in the UK and discusses barriers and opportunities for exploiting the untapped potential of using green space to provide low-carbon heat.
Heating is a large part of the UK energy demand
Currently, around 45% of the UK’s final energy demand is used for heating and cooling (Figure 1). With such a large share of energy usage being devoted to heating and cooling, decarbonisation of this sector is critical. Heat pumps are one low carbon option that is both technically and economically viable.
Figure 1: Heating and cooling demand in the UK by end-use compared to total final energy demand (2015 values) Heat Roadmap Europe
The need for heat pumps for net zero
To reach Net Zero (called “Further Ambition” by the CCC) requires a huge roll-out of heat pumps and district heating. This will be done in conjunction with hydrogen, smart storage heating and energy efficiency.
According to a report from the government appointed Committee On Climate Change (CCC), reaching Net Zero GHG emissions by 2050 requires:
By 2025: No new homes should be connected to the gas grid
By 2035: All replacement heating systems must be low-carbon or hydrogen ready
By 2050: Low carbon heating increases from 4.5% today to 90%.
By 2050: 5 million homes will be connected to low-carbon heat networks
By 2050: 19 million homes will connect to heat pumps.
“We expect heat pumps to be cost effective in gas heated non-residential buildings by around 2030, so anticipate the stock could be fully replaced without significant scrappage by 2045”
Status of Low Carbon Heat Today
Low carbon heat is currently split across heat networks and individual building systems. In densely populated areas, heat networks can provide a lower cost solution than stand-alone systems.
There are nearly 500,000 customers connected to heat networks in the UK. As of 2018, only 1% of these heat networks were based on heat pumps; this figure is expected to be closer to 5% now, based on those under development in 2018 (Source: ADE).
Most current heat networks (~80%) get their heat from natural gas. These heat networks are gradually shifting to become Combined Heat and Power (CHP) networks, to increase efficiency. However, these are not low carbon solutions – in fact, with the electricity grid rapidly decarbonising, these are not only more polluting than the electrical grid, but pollute locally, impacting air quality. To meet future emissions targets, these heat networks will need to transition to a low carbon energy source.
In terms of the overall heat pump stock in the UK, there are 210,000 units. Combined, these produce 3.2 TWh of renewable energy and save 0.81 Mt CO2, annually (Source: EHPA).
Future for Heat Pumps
The European heat pump market is growing. With 12% growth in 2018, there are now almost 12 million units installed, representing just under 10% of heat supply to all buildings (the UK gets only 4.5% of its heat from heat pumps). This European market is expected to double by 2024 according to the European Heat Pump Association market insight.
Figure 2: UK District Heating source shares prediction for 2050 (Heat Roadmap Europe).
Figure 2 represents the 2050 view of which sources will provide district heating in the UK, with 28% being provided through heat pumps (as compared to ~5% today). The percentage of heat demand in the UK supplied by District Heat Networks could feasibly range from 25% to 75% by 2050. The Heat Roadmap Europe report gives a recommended minimum share of 35% of heat being provided by district heating by 2050. This minimum is because district energy is both technologically and economically more viable than other network or individual based solutions in a large majority of urban areas (Source: Heat Roadmap Europe).
Heat Pump Potential from Green space
Given that urban areas can benefit from district heating, and that a large proportion of future heat demand will come from heat pumps and district heating networks, clean energy sources to power these heat networks must be found in our cities and towns.
One ideal location to find clean energy to power heat networks is in local parks and greenspace. The Powering Parks project investigated the potential for ground sourced heat within parks, playing fields and other green spaces to be used within district heating schemes. The report showed that 10% of the UK heat demand could be supplied in such a way, providing an effective and low-cost route to decarbonising heat in urban areas.
“10% (or 30GW) of Great Britain’s peak heat demand could be met from green space”
Development Trajectories
Even with the legally binding target of net zero by 2050 within the UK, there are many possible ways which this can be achieved. For heat specifically, there are still questions around the contribution that hydrogen will make for heat supply as compared to heat pumps and other low carbon technologies.
Energy Efficiency as a Priority
One place where there is clarity is the agreement that “easy-wins” and “least regrets” options are common across all development trajectories. These include thermal efficiency improvements, and improved efficiency standards. Retrofitting the existing housing stock and improving the standards for new builds will reduce energy use and assist all decarbonisation efforts, regardless of the route taken.
“Making sure UK heating systems are fully low-carbon by 2050 - Energy efficiency retrofit of the 29 million existing homes across the UK should now be a national infrastructure priority.”
How big a part will heat pumps play?
The exact contribution that heat pumps will make towards the future heat supply in the UK is unknown. However, it is clear that heat pumps can provide a large share of the heat demand, and that the part they will play will be substantial.
“Multiple heat decarbonisation pathways are possible including electrification, decarbonised gas, and hybrid systems. But optimal solutions will vary by region and the combinations and interaction of these technologies must be considered to provide a flexible, operable, and sustainable whole energy system.”
For example, the net zero national grid scenarios predict that, by 2050, electric heat pumps and district heat networks will provide 28% (8.6m) and 11% (3.4m) of the domestic heat demand, respectively. One alternative community renewables scenario shows a more prominent role for heat pumps with electric heat pumps providing 34% (10.7m) of homes, and district heat networks heating 16% (5.0m) of homes.
These numbers show there is a high level of uncertainty when comparing the heat network penetration with Figure 2. However, regardless of the scenario, district heating will provide millions of homes with heat and will no longer be a niche technology in the UK.
Barriers and Opportunities
There is huge potential for green space to be used to help provide heat to millions of consumers, especially in urban areas. But there are still barriers preventing scale up and exploitation, many of which are similar to those faced by heat pumps in general. Tackling these barriers can enable the growth of both green space heat networks and heat pumps for the low carbon transition.
Barriers
Requirement for behaviour change
Public acceptability of shifting to electric based heat may be a challenge. For example, there is a requirement for the heating to be programmed in advance, with slower response rates. People will need to get used to a different user experience.
Official support of a fuel switch (reduce the effective carbon price)
The price differential between gas and electricity within the UK is close to 4 times (Source: EHPA), when compared on a kWh basis. This high ‘spark gap’ means that the economic case for electrifying heat can be difficult. One of the drivers of this differential is the effective carbon price applied to electricity and gas, stemming from the fact that levies are placed on electricity much more than on gas (e.g. the Feed-in-Tariff and Energy Company Obligation). Additionally, the environmental and social obligations applied to electricity are 20.44% of the electricity bill and only 1.6% of the gas bill (Source: Ofgem: electricity, gas).
At present, levies are disproportionately affecting electricity consumers. To help overcome this disparity, rebalancing the levies applied is a reasonable first step. In addition, introducing a direct carbon tax could make renewable, electrified heat more viable in the UK.
Building Regulations
The electricity grid carbon intensity factor used for builds is the historic level from back in 2012 (519 gCO2/kWh). The current rate is 3.6 times lower than this, and regulations (currently SAP 2012) need to catch up to use current realistic values, or even better, a future prediction of the grid carbon factor.
This will allow for accurate calculations to be made around the carbon used by electrically powered heating within new builds. Greater London Authority took the step to introduce more reflective carbon factors within their regulations, leading to heat pumps being favoured as a heating source to meet London regulations.
Building Upgrades
When connecting to a heat network or heat pumps, there is often a requirement to modify the in-building heating system to allow for compatibility with a lower flow temperature, for example fitting larger radiators and replacing the hot-water cylinder. This refurbishment cost is estimated to be around £275/kW for uplifting and replacing emitters (Source: CCC). This cost is not likely to reduce substantially through technical innovation.
The cost of building improvements was reported as the biggest barrier to heat pump uptake within the UK (Source: CCC). It was estimated that 5 million extra heat pumps could be installed by 2030 if there was zero refurbishment cost as compared to business as usual. This infers that government incentives to reduce the installation impacts could catalyse deployment. It is important to note that there is also a ‘hassle cost’ associated with these upgrades (e.g. loss of business while improvement works are carried out or inconvenience from building works being carried out in your home), which are much more difficult to account for and provide subsidies against.
Staffing the transition
Upskilling is needed, due to the current lack of properly skilled staff (Source: HPA). The UK Government should use initiatives under the Construction Sector Deal to tackle the skills gap. The average age of a heating technician in the UK is over 50 – its essential that new plumbers are trained in installing heat pumps rather than just gas boilers.
Opportunities
Subsidies
The UK Government’s Renewable Heat Incentive (RHI) set to close to new participants (for the non-domestic RHI) in March 2022, and consultation closed in July 2020 on the future support for low carbon heat. The Boiler Upgrade Fund (BUF) will replace the Clean Heat Grant in April 2022. The BUF has been created to support property owners to install air and ground source heat pumps, ensuring that capital costs are equivalent to a fossil fuel new boiler system. The Public Sector Decarbonisation Scheme (PSDS) provides capital cost funding for energy efficiency and heat decarbonisation projects in public sector non-domestic buildings. The Green Heat Network Fund (GHNF), opening in April 2022, will fund commercialisation and capital costs (up to £1M) for low carbon heat network projects. Until the PSDS replacement policy has been implemented and during the GHNF transition period, there is uncertainty over how the sector will be supported financially.
New Builds
Within new builds there is an opportunity to facilitate the low carbon transition by building homes to be heat network ready (e.g. integrating larger radiators into the interior design). Targeting new builds for heat pump installations has the added benefit of providing (in general) the lowest installation costs as compared to retrofitting in an existing property.
Cost reductions expected
For heat pumps, there is expected to be an ~11% cost reduction by 2050. These reductions are modest in comparison to batteries for EVs and fuel cells. The cost reductions are anticipated to be obtained through economies of scale within the UK.
System flexibility
There are additional electricity network benefits that can be achieved using heat pumps. If business models are adopted to provide energy and heat as a service to consumers (i.e. at a flat rate in return for agreed comfort levels being met), then suppliers can operate heat pumps intelligently to reduce constraints on the electricity network, and be paid for providing flexibility in return, improving the financial case for implementing low carbon heating.
Greenspace as a resource
Greenspace should be viewed as a resource for towns and cities; it can provide valuable clean heat energy to surrounding buildings with minimal impacts on the usability of the space. Furthermore, public parks can be an ideal spot for development as they provide opportunities for cost-efficient and disruption-minimising coordination with other works, e.g. drainage improvements or building heating modernisation as well as opportunities to protect greenspace by using it to provide economic benefit.