Buildings must reduce emissions
With some 57 per cent of the world’s population living in urban areas, buildings represent a significant source of CO2 emissions.
Globally, the building sector accounts for around 3 gigatonnes (Gt) of direct carbon dioxide (CO2) emissions per year, with electricity use and associated fossil fuel combustion for district heating increasing that figure to 10 Gt of CO2 annually.
Under the 1.5°C scenario to limit global warming, electrification accounts for around half of the reduction in direct CO2 emissions in the building sector by 2050.
Heat supply decarbonisation is crucial
In buildings, the direct use of fossil fuels is dominated by space and water heating, and cooking.
In countries with significant heating seasons, and especially those with cold climates, space heating accounts for the largest share of buildings’ total energy consumption and direct fossil fuel use.
Energy efficiency can help address related emissions, but given the urgent need to decarbonise the building sector, and the difficulty of scaling up deep energy efficiency retrofits of the existing building stock, it is important to decarbonise the heat supply.
With falling costs of renewables, price economics have changed
As the cost of renewable power generation has fallen – particularly for solar and wind energy – the decarbonisation of the power generation sector has become increasingly economical.
With a decarbonised electricity sector, the electrification of end-use sectors provides an avenue for the rapid reduction of building emissions.
Heat pumps provide heating and cooling in buildings, delivering efficiency improvements and increasing the use of renewables. Therefore, highly efficient, electricity-driven heat pumps have a crucial role to play in decarbonising space and water heating in buildings.
A mature and reliable heating solution
Heat pump installations are growing significantly in new and existing markets.
Scandinavian countries have long set the benchmark in this regard – heat pumps have been the top choice for new heating systems for years. Now, from Belgium to Poland other, newer markets are seeing rapid growth.
Despite growing market deployment in recent years, however the use of heat pumps in countries with substantial space heating demands outside Scandinavia remains low.
This must change rapidly to reach the 1.5°C Paris Agreement goal to limit global warming.
European markets lead in heat pump sales
According to data from the European Heat Pump Association, the Europe’s heat pump market has seen double-digit growth (+13%) since 2015.
In 2020, 1.6 million heat pumps were sold, resulting in a total of 14.9 million units installed, while the market increased 34 per cent in 2021, with an additional 2.2 million heat pumps added, raising the total installed to around 17 million.
This trend is likely to continue.
Market must grow faster to meet the 1.5°C goal
In the World Energy Transitions Outlook 1.5°C Pathway, electrification plays a primary role in the buildings sector. Direct electrification rates for the sector would be the highest of any end-use, reaching 73 per cent compared to 32 per cent in 2019.
The total number of heat pumps providing space and water heating in cold-climate countries would rise close to nine-fold.
Investments in heat pumps would need to rise from an estimated USD 12 billion per year in the period 2017-2019 to an average of USD 144 billion per year between 2021 and 2030, before easing back to USD 77 billion per year in the period 2031-2050.
Further policy support needed
Thanks to significant innovation and technology development, the fossil fuel price crisis of 2022 and targeted policy support, heat pump installations are growing significantly in a number of new and existing markets.
Yet, despite these promising developments - particularly for new builds - progress remains below what is needed.
Given the urgency of the goal, and the low rates of new construction or energy efficiency and renewable heating renovations in cold-climate countries, the need for policies to support the scaling-up of heat pumps, alongside the other solutions identified in the World Energy Transitions Outlook, is becoming increasingly clear.
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