Delta Energy & Environment Ltd Registered in Scotland: No SC259964 Registered Office: 15 Great Stuart Street, Edinburgh, EH3 7TS Too many technologies and not enough infrastructure: How do we reach sustainability? Heating & Cooling to 2020 and beyond Dr. Lindsay Sugden, Senior Analyst, Delta-ee Contact: lindsay.sugden@delta-ee.com, +44(0)131 625 1006 www.delta-ee.com
Delta Energy & Environment Delta-ee provides: Market insight & forecasts Techno-economic analysis Competitor analysis Demand Strategy & tactics Clients: Energy Energy Heat Efficiency Services Pumps Energy companies Manufacturers Finance sector Photovoltaics Electric Vehicles Policy makers Fuel Cell Electricity Connected Storage Home Micro-CHP Research Services : Demand CHP Heat Pump Service Response Connected Homes Service Micro-CHP Service Microgeneration Insight Service Distributed Power Service Networks Generation Pathways & Roadmap Service Delta-ee: Experts in Heat & Distributed Energy 2
This presentation New low carbon heating technology will be important in the UK if carbon targets are to be met The limitations of the energy system infrastructure create a need for a balanced transition involving many technologies There are customer and installer challenges to overcome Disruptive business models & connectivity in the home may support change in the heating sector Delta-ee: Experts in Heat & Distributed Energy 3
This presentation New low carbon heating technology will be important in the UK if carbon targets are to be met The limitations of the energy system infrastructure create a need for a balanced transition involving many technologies There are customer and installer challenges to overcome Disruptive business models & connectivity in the home may support change in the heating sector Delta-ee: Experts in Heat & Distributed Energy 4
UK heating market today Low Carbon Appliances 1.8 million Electric Storage Heater Oil / LPG Gas boilers are responsible for the vast majority of CO 2 emissions from domestic heat Gas boiler 2012 2025 Delta-ee: Experts in Heat & Distributed Energy 5 Source: Delta-ee UK Pathways & Roadmap: Reference Scenario
Reaching Sustainability: Decarbonising the heating market requires lower carbon gas boiler alternatives The scale of the challenge: 2015 residential heat emissions Gas: 22m homes Flat - Gas (1945-2011) Suburban Flat - Gas (Pre 1944) Urban / Semi - Gas (1945-2011) Semi - Gas (Pre 1944) Terraced-Gas (1980-2011) Terraced - Gas (Pre1944-1980) Detached - Gas (1945 -2011) Detached - Gas (Pre 1944) Mainly rural/ some urban Flat - Electric (1945-2011) Electric: 2.6m homes Flat - Electric (Pre 1944) Semi - Electric (1945-2011) Semi - Electric (Pre 1944) Terraced-Electric (1980-2011) Terraced - Electric (Pre1944-1980) Detached - Electric (1945 -2011) Detached - Electric (Pre 1944) Flat - Other (Pre 1944 - 2011) Others: 1.3m homes Mainly Semi - Other (1945-2011) rural Semi - Other (Pre 1944) Terraced-Other (1980-2011) Terraced - Other (Pre1944-1980) Detached - Other (1945 -2011) Detached - Other (Pre 1944) 0 5,000 10,000 15,000 Thousands of tonnes C0 2 /yr Delta-ee: Experts in Heat & Distributed Energy 6 Source: Delta-ee Heat Study for Energy Networks Association
UK heating market in 2025 – growth of low carbon appliances Which technologies will make up the 400,000 low carbon 1.8 million appliances? Low Carbon Appliances Electric Storage Heater Oil / LPG Gas boiler 2012 2025 Delta-ee: Experts in Heat & Distributed Energy 7 Source: Delta-ee UK Pathways & Roadmap: Reference Scenario
Which technologies will make up the 400,000 low carbon appliances – which can displace gas boilers? 400,000 1.8 million Electric Storage Heater Low Carbon Oil / LPG Appliances Heat Pumps Gas boiler 42,000 2012 2015 2020 2025 Gas boiler plus solar thermal Biomass Fuel cell Micro-CHP Gas heat pump Hybrid heat pump gas boiler 2012 2025 Hybrid heat pump oil boiler ASHP GSHP Delta-ee: Experts in Heat & Distributed Energy 8 Source: Delta-ee UK Pathways & Roadmap: Reference Scenario
This presentation New low carbon heating technology will be important in the UK if carbon targets are to be met The limitations of the energy system infrastructure create a need for a balanced transition involving many technologies There are customer and installer challenges to overcome Disruptive business models & connectivity in the home may support change in the heating sector Delta-ee: Experts in Heat & Distributed Energy 9
The limitations of the energy infrastructure 2010 UK heat & electricity hourly demand variability Design point for heat delivery system Peak electricity demand will exceed electrical grid capacity in future ?? Design point for electricity delivery system Source: Energy Technologies Institute, 2012 Delta-ee: Experts in Heat & Distributed Energy 10
What happens under a more balanced scenario? Balanced Transition – a wider mix of technologies Role for electric HP, hybrid, gas HP, micro- CHP… storage, demand 100% response… Heat 90% carbon emissions networks reduction 75% Number of appliances (%) Half the additional peak capacity required in the full Electric 50% electrification & heat networks scenario (24 instead of 48 GW) 25% Half the infrastructure Gas investment costs required in full electrification (half of £16 – 28bn distribution grid, 0% 2012 2015 2025 2035 2045 £4bn – gas grid shut-down) Delta-ee: Experts in Heat & Distributed Energy 11 Source: Delta-ee Report for the Energy Networks Association - Balanced Transition Scenario
This presentation New low carbon heating technology will be important in the UK if carbon targets are to be met The limitations of the energy system infrastructure create a need for a balanced transition involving many technologies There are customer and installer challenges to overcome Disruptive business models & connectivity in the home may support change in the heating sector Delta-ee: Experts in Heat & Distributed Energy 12
Customer proposition for low carbon technologies… But running cost savings alone The upfront cost of low carbon may not be enough – especially technology will fall over time…. without incentives Policy intervention is the market will be critical for new low carbon technologies annual running cost upfront cost gas boiler gas boiler time time Delta-ee: Experts in Heat & Distributed Energy 13
In reality, there are challenges gaining customer buy-in Air source heat pump sales in 2012 No customer pull? “Renewables very rarely Majority of the market Social Housing feature in my customers’ list of desires… Owner occupiers are challenging …customers go off the idea with price and complexity of installation” 16,000 2012 installations Self-build 12,000 Developer Installer Social Housing – 8,000 Costly & time-consuming? new build “The primary barriers to renewables are the Owner occupier cost and time for training, and for membership of an approved body. 4,000 Social Housing - …and there is a lack of interest from my retrofit customers” 0 Delta-ee: Experts in Heat & Distributed Energy 14 Source: Delta-ee Microgen Insight Service
In reality, there are challenges gaining customer buy-in Lack of awareness / trust? Too expensive? “I want information from someone who does not have a vested interest in selling it” “A big concern is the actual upfront cost” “[I would want] documented evidence that “finding the capital would be difficult” these [fuel bill] savings can be delivered” “if someone said they’d put it in for “I don’t know how safe it is” free, I’d say no problem, do it.” “ I would need a much longer warranty” Difficult customer journey so far? customer Customers don’t like change? “I want information from someone who does not have a vested interest in selling” “I don’t really see the need to be changing my system” “I’m standing here with £8K and saying somebody please come and give me one “[my gas boiler] is just very effective” of these things and the industry is saying no” Delta-ee: Experts in Heat & Distributed Energy 15 Source: Delta-ee Microgen Insight Service
This presentation New low carbon heating technology will be important in the UK The limitations of the energy system infrastructure create a need for a balanced transition involving many technologies But there are customer and installer challenges to overcome Disruptive business models & connectivity in the home may support change in the heating sector Delta-ee: Experts in Heat & Distributed Energy 16
A glimpse into the future…. ? Business models… “We are selling a lot of heat pumps for multi - family homes in Switzerland because of the heat contracting offer from local utilities” Major European Heat Pump Manufacturer “Removing the ‘risk’ of poor performance through a ‘real’ ESCo is key to gaining consumer confidence in a new heating system” Wolfram Moritz, MPW Legal & Tax (ESCo expert) Delta-ee: Experts in Heat & Distributed Energy 17 Source: Delta-ee Heat Pump Service
Recommend
More recommend
