The U.K. has big plans for heat pumps. Its 10-point plan for a green industrial revolution, published in November to outline policy priorities for achieving a net-zero economy by 2050, is aiming for 600,000 heat pumps to be installed annually by 2028.
This is a huge ramp-up of ambition from a country that installs around 22,000 heat pumps each year, of which only about a quarter are the more efficient ground-source heat pumps. The U.K. is far behind other European countries in installation rates — market leader France sold 275,000 heat pumps in 2018, with Italy, Spain and Scandinavian countries all far ahead of the U.K., according to data from the European Heat Pump Association.
The 10-point plan states that a “market-led incentive framework” will be introduced to drive growth, especially in off-gas grid properties. But no further detail is given, and a major energy policy update has been long overdue.
Industry is keen to boost installation rates, which have been hampered by inconsistent policy, said Matthew Trewhella, managing director at heat pump manufacturer and installer Kensa Contracting. The main subsidy available to the sector has been the Renewable Heat Incentive (RHI), which was introduced in 2011 but only really started having an impact after some changes were made in 2018, he said.
However, the rate for the RHI was reduced in March this year, and the program will end entirely in March 2021. The government said at the time that it would be replaced by a flat rate grant of £4,000 ($5,380), but no details have emerged since.
Stability needed for heat pumps to build push for net-zero
This uncertainty has damaged the business case for the technology, just as installers need to start investing to scale up operations, Trewhella said. The U.K. plans to phase out the installation of gas-fired boilers in new-build properties in 2025, leaving only three years between that phaseout and the 600,000-per-year heat pump installation target for 2028.
“There’s going to be a one- to two-year gap where somehow everyone in the market is going to have to have faith and invest in growth and training, and therefore make losses, in the hope that the legislation comes in,” he said.
Consumer awareness of the technology is low in the U.K., and it remains a very expensive option compared with conventional gas-fired boilers, according to experts from industry bodies Energy U.K., the U.K. Energy Networks Association and energy infrastructure trade body Beama who spoke to a cross-party parliamentary hearing on the technology in November.
But the government’s climate change advisers believe that at least 10 million, and possibly up to 20 million U.K. homes, could be suitable for heat pumps. One way of boosting the market for heat pumps could be to allow them to provide flexibility to the grid, according to experts.
Emma Pinchbeck, chief executive of Energy U.K., agreed. “Heat pumps are an electric product, and when combined with efficient buildings and smart technologies, consumers can adjust how they use them and be rewarded for doing so, if it helps manage the wider electricity system,” she said in an email.
“There have to be methodologies on the grid to use variable renewable energy when available, and use it less when it’s not available,” said Howard Porter, chief executive of Beama, in an interview. “At the parliamentary hearing, Energy U.K., the Energy Networks Association and I...all agreed that this [is] vital.”
Superhub trials heat pumps for grid balancing
The concept of using heat pumps to balance the grid is currently being piloted in Oxford. The three-year, £41 million Energy Superhub Oxford (ESO) project aims to provide a model for large-scale heat and transport decarbonization using heat pumps, energy storage and smart controls.
The first phase of the project will see 60 homes owned by housing provider Stonewater being retrofitted with ground-source heat pumps connected to a communal ground array, and integrated with time-of-use tariffs and heat optimization software. Smart controls will optimize heat production and automatically “load-shift” for grid stabilization, cost and carbon savings.
Energy demands from electric vehicles are also load-shifted and synchronized with electricity availability, price and carbon intensity. The final element of the project is large batteries charging and discharging to stabilize the grid and earn money based on the differential price of electricity.
The combination of these three elements will balance the grid and help absorb excess energy from wind turbines that are now being asked to shut down when there is too much electricity available. “Many people think that you can’t have large numbers of heat pumps; the grid won’t cope. We want to prove that it can,” Trewhella explained.
The system learns the residents’ heating preferences and calculates the cheapest way of providing that, with the side benefit of massively reducing strain on the grid, he said.
The project is being run by a consortium including Oxford City Council, Pivot Power (part of EDF Renewables), Habitat Energy, Invinity Energy System, Kensa Contracting and the University of Oxford.
The partners believe the model offers a blueprint to scale up the decarbonization of heat from housing across the U.K., for which decarbonization solutions are desperately needed. Domestic consumers are the largest users of energy for heat, responsible for almost 60 percent of total energy consumption, according to government data. The ground-source heat pumps at the Oxford ESO have been estimated to cut the carbon-dioxide emissions of the homes they are installed in by 70 percent.
Oxford University will analyze data collected from the project to estimate what the whole system would look like if it were rolled out across the country, calculating the cost of replacing 25 million gas boilers with ground-source heat pumps and how the grid can manage that.
But in order to meet the government’s ambitions, the industry wants more certainty, Trewhella said. “It's a very unusual time for us in terms of planning — we’re just coming up to the bottom falling out of our market, but actually, we've got to be ready to grow many times larger than we are now.”