Transformation of the British GSHP market

David Matthews, Chief ExecutiveGround Source Heat Pump Association

22nd October 2012

Assessing the role of ground source heating & cooling as one of the 8 key renewables techsSolar thermal – HW in summer.

mCHP – it only saves a bit of carbon. Fuel cell might be a very interesting proposition.

Biomass – rural “high enthalpy” applications.

ASHP – more expensive and only small carbon saving as compared to gas. Noise issues.

Continue with fossil fuels – they run out!

GSHP – low cost & carbon. Needs some space.

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UK

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Ger

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EU

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in

Gre

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Bel

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Luxe

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urg Mal

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Fin

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Hun

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Est

onia

Cze

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epub

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Bul

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Rom

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Per

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EU Member States

Increase in percentage share of total final consumption of energy from renewable sources

12% Renewable Heat; 29% large scale electricity,

2% Small Scale electricity, 10% transport

EU Renew able Energy Policy (20:20:20) - D irective 2009/28/EC… on the prom otion of the use of energy from renew able sources

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Austria

Be lg ium

Bulgaria

C yprus

C zech Repub lic

D enmark

E ston ia

F in land

F rance

Germany

Greece

H ungary

Ireland

Italy

La tvia

L ithuania

Luxembourg

Malta

N etherla

nds

Po land

Portuga l

R omania

S lovakia

S loven ia

Spain

Sweden

U nited K

ingdom

So u r ce : Eu r A ct iv Ne tw o r k w w w .e u r activ.co m /, Dir e ct ive 2009/28/EC

Sh

are

of

ren

ew

ab

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(%

)

Share of renewables (%) in 2005

Share of renewables (%) required by 2020

Country Number installed Date started

Austria 23 000

Canada 36 000

Germany 40 000 1996

Sweden 200 000 1980

Switzerland 25 000 1980

UK 3 000

USA 600 000 1996

• One in 4 to 5 of Swedish homes use a GSHP & Mature markets have codes of practice, standards & training

UK 2007

UK HP experience

Advanced Markets:

market supported by codes of practice,

standards and training

Medium sized markets:

in process of transformation Advanced

Low penetration markets e.g. UK:

need considerable intervention

UK today

ASHP vs GSHP 08 to 10

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

2008 2009 2010

Un

its GSHP

ASHP

UK today

Commercial HP Sales 09 to 11

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Jan-Mar Apr-Jun Jul-Sep Oct-Dec Jan-Mar Apr-Jun Jul-Sep Oct-Dec Jan-Mar

1st Qtr 2nd Qtr 3rd Qtr 4th Qtr 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr 1st Qtr

2009 2010 2011

Un

its

ASHP Commercial (20.01-30kW)

ASHP Commercial (>30kW)

GSHP Commercial (20.01-30kW)

GSHP Commercial (>30kW)

UK today

Domestic HP Sales 09 to 11

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800

1,000

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1,600

Jan-Mar Apr-Jun Jul-Sep Oct-Dec Jan-Mar Apr-Jun Jul-Sep Oct-Dec Jan-Mar

1st Qtr 2nd Qtr 3rd Qtr 4th Qtr 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr 1st Qtr

2009 2010 2011

Un

its

ASHP Small domestic (<7kW)

ASHP Small domestic (7-10kW)

ASHP Large domestic (10.01-15kW)

ASHP Large domestic (15.01-20kW)

Small domestic (<7kW)

Small domestic (7-10kW)

Large domestic (10.01-15kW)

Large domestic (15.01-20kW)

Domestic Carbon Emissions 2003

Cooking5%

Lights & Appliances

22%

Water Heating

20%

Space Heating

53%

Cooking

Lights &Appliances

Water Heating

Space Heating

74%

3%

11%

9%1%2%

Heating and hot water

Fans, pumps, controls

Lighting

Office equipment

Catering

Other electricity

CommercialCommercial

Office Type 1: Source Carbon Trust & http://www.cibse.org/pdfs/ECG019.pdf

Good Policy Framework

Financial Schemes

Regulation Schemes

Quality Scheme

Supported by flanking measures of:

Public Awareness

Training

RHI Spend 2011/15

Good Policy Framework

Financial Schemes

Regulation Schemes

Quality Scheme

Supported by flanking measures of:

Public Awareness EST? Geo.power?

Training SSC, Awarding Bodies, Geotrainet, IGSHPA, Design, Install, Specify

RHI Spend 2011/15

Within £864m – fixed annual envelope

(nominal):

Actual Spend New Spend

2011/12:£56m £56m

2012/13: £133m £77m

2013/14: £251m £174m

2014/15: £424m £250m

Total £864m

RHI Spend 2011/15

The Renewable Heat Incentive-implications for non-domestic ground source installations

Phase 1: 3 or 4.3 p/kWh (100 kWth)over 20 years Metered

Phase 2: 12.5 to 17.3 p/kWh (MCS) over 7 yearsDeemed

The Renewable Heat Incentive-implications for non-domestic ground source installations

Phase 1: 3 or 4.3 p/kWh (100 kWth)over 20 years Metered

Phase 2: 12.5 to 17.3 p/kWh (MCS) over 7 yearsDeemed

The European perspective

Renewable Heating Action Plan for Europe – barriers:

large upfront investment cost

return on investment cost not including fuel inflation

owner – tenant dilemma i.e. rented accommodation

chicken and egg – low awareness, low demand etc.

RES – H still considered “exotic”

lack of critical mass

Owner – tenant dilemma i.e. rented accommodation

Social housing

Private rented housing

Private mass-market housing

Private upmarket housing

How do we engage the middle 2 sectors?

Community schemes?

SEA / RENUE Report on“Barriers to installing DSHW systems”:• older, home owners from higher status. (not income)

• advertise in local press backed by local authority

• visiting fairs etc. is not so important

• effective marketing – saving money, future proofing, environmental reasons to target groups

• increase emotional involvement of client with installation to build momentum

• currently solar grant needs to be £1000 to £1500 to remove cost barrier e.g. £4000 to £6000 GSHP

To alleviate cost issues (the major barrier):

• arrange low-interest loans

• install when heating system being refurbished

• group installations for economies of scale

• target new build

Train installers in customer care, disseminate info in Energy Efficiency Advice Centres and use case studies of existing customers

SEA / RENUE Report on“Barriers to installing DSHW systems”:

Renewable Energy House – Brussels

www.gshp.org.ukdavid.matthews@nef.org.uk