Sweaty Europe can kill two birds with one pump

Jun 25, 2023

A person cools off at the Piazza del Popolo, during a heatwave across Italy, as temperatures are expected to rise further in the coming days, in Rome, Italy July 18, 2023. REUTERS/Remo Casilli

LONDON, Aug 7 (Reuters Breakingviews) - Europe’s sweltering summer has focused attention on its building stock. Responding to the continent’s 40 degree Celsius (104 Fahrenheit) temperatures means cutting carbon emissions from gas heaters, while rolling out ways to efficiently cool residences and offices amid an “era of global boiling”. What may be less immediately obvious is that heat pumps are the best way to do both.

Continuing to burn gas in winter and use inefficient air-conditioning units in summer is unsustainable. The former helps explain why heating and powering buildings account for 10 billion tonnes of carbon dioxide emissions annually, according to the International Energy Agency, or about a quarter of the global total. The electricity required to cool a more populous planet by 2050 during increasingly hot summers, meanwhile, could nearly triple to 5,800 terawatt-hours, the IEA reckons. That’s double current demand in the entire European Union, at a time when power demands from electric vehicles are already set to soar.

Reflecting their name, heat pumps are mostly known for their warming abilities. Even on cold days they operate by efficiently pulling in what heat exists outside from the air or the ground and using that to heat a special refrigerant liquid into gas. When that’s compressed, it warms up more. Pumping what results round the building raises the temperature to a comfortable level.

By using heat pumps, the IEA reckons it could hike the number of homes using zero-carbon electricity for heating from a fifth to a half of the total by 2050. That would slash building emissions considerably. But the real magic bullet is that the same machines can be used to adapt to climate change as well as mitigate it. That’s because an air-to-air heat pump is identical to a conventional air conditioner, thus allowing it to cool buildings as well as heat them. When cooling, pumps suck in heat from the air inside and release it outside, working like a refrigerator.

The catch is implementation. To fit with efforts to limit global warming to 1.5C above pre-industrial times, monthly global heat pump installation needs to jump from 1 million today to 14 million by 2050, the IEA reckons. In Europe, currently only 16% of residential buildings use heat pumps, according to a study from the European Heat Pump Association (EHPA) based on data from 21 countries including non-EU Britain and Norway, with 20 million heat pumps installed. Despite a record 3 million units sold last year, another 60 million units are needed by 2030 to meet the bloc’s net-zero goals.

According to the EHPA, a heat pump is around 30% cheaper than a fossil-fuel boiler over its lifetime, and those equipped with them have saved 262 terawatt-hours of energy since 1996. But the upfront costs are much higher. On average buying and installing a heat pump could cost up to $13,000 compared to $2,500 for a gas boiler. For advanced air-to-water pumps, which heat water as well as space, the cost of installation is even higher.

The obvious step is for governments to extend subsidies. EU member states such as France, Germany and Italy have already introduced grants and tax savings to speed up the transition. That, plus sweltering temperatures, is having an effect. Heat pump sales rose 35% in Italy last year, making it Europe’s second-biggest marketplace after France, EHPA data shows. Demand in Poland also more than doubled.

Yet the outlook is far from uniformly positive. In Germany, a bill that bans new oil and gas heating systems from 2024 has triggered a fierce debate about decarbonisation, with critics arguing that the investment costs for climate-friendly solutions like heat pumps will overburden homeowners and tenants. The fierce backlash over the ruling, dubbed the “heat hammer”, plunged Olaf Scholz’s coalition government into its worst crisis since taking office in 2021.

Meanwhile, plenty of central and eastern European EU member states lack the fiscal heft to extend subsidies, so Brussels needs to find a way to jointly extend tax breaks to cut heat pump installation costs. Other players like Britain are not going far enough. France installed more than 621,000 heat pumps last year, the EHPA says, yet the UK only managed 55,000 – miles off its target of 600,000 devices annually by 2028.

Another risk is that Europe goes down the path that the United States has already: a widespread adoption of cheap but inefficient air conditioners that aren’t heat pumps. The cost of a portable air conditioning unit is in the hundreds of euros rather than the thousands, but its energy consumption is three times higher. That’s because heat pumps generate more cool air by volume than the energy it takes to run them. The U.S. has at least seen the error of its ways: as of 2020, nearly 18 million U.S. households were equipped with heat pumps, up 50% from 2015, according to data from the U.S. Energy Information Administration. President Joe Biden’s Inflation Reduction Act (IRA) should see that figure rise significantly.

Heat-pump makers are admittedly grappling with the global chip shortage, higher energy costs and labour shortages. And more heat pumps don’t necessarily mean more domestic European manufacturers. In Germany, thousands of mid-sized Mittelstand family-owned manufacturers like Stiebel Eltron and Viessmann, which recently sold its core business to U.S. air-conditioner maker Carrier Global (CARR.N) for 12 billion euros, are struggling amid fierce competition from the likes of Mitsubishi Electric (6503.T) and Daikin Industries (6367.T). These Asian players are rapidly gaining market share, although their European manufacturing facilities do at least employ local workers.

None of these stumbling blocks should stop determined governments. Temperatures will keep rising. The sooner sweaty Europeans are able to combat them with their pumps, the faster they will get rid of gas boilers, advancing Europe’s race to meet its net-zero goals. Every heatwave will then have a silver lining.

(The author is a Reuters Breakingviews columnist. The opinions expressed are their own.)

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CONTEXT NEWS

Sales of heat pumps rose by well over a third in Europe last year after government support and soaring fossil-fuel prices boosted uptake of the technology, according to the European Heat Pump Association (EHPA). So far 20 million heat pumps have been installed across 21 European countries. To meet net-zero targets by 2030 EHPA estimates Europe would need 60 million more heat pumps installed by 2030.

U.N. Secretary-General António Guterres warned on July 27 that the era of global warming has ended and “the era of global boiling has arrived” after scientists said July was the world’s hottest month on record.

Air-conditioning sales have soared in southern Europe as people are coping with extreme heat. Italian consumer electronics retailer Unieuro, which has more than 500 shops across the country, said sales of air-conditioning products doubled in the week to July 21 compared to the same week last year. El Corte Inglés, one of Spain’s largest department store chains, said that by mid-July it had already sold 15% more units than it did last year by the end of August.

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