The challenges and opportunities of heat pumps on international and EU level

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Environment Readiness

The challenges and opportunities of heat pumps on international and EU level

Stefaan Vanderstraeten - Daikin Europe N.V.

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2Environment Readiness Sectionsept-09

Overview

The importance of heat pumps :

1. On International level : Heat pumps in the Climate Change debate

2. On European level : Heat Pumps in the Energy & Climate Package

3. On National Level : Heat Pumps as part of national policies

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1.International Level : HP in the Climate Change Debate

UNEP

October 2007 December 2008

1. Buildings are responsible for 30%-40% of total energy use and energy-related CO2 emissions

2. Energy mainly (>80%) consumed in the building use phase (heating, Cooling, hot water,….)

10 -10 -

April 2007

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Big opportunities for

Heat pump technology

Space

Heating

Hot Water

50 - 60%

10 - 25%

50 - 60%

10 - 25%

Space

Heating

Hot Water

SpaceHeating

50-60%

10 - 25%Hot Water

20%

Others

3% SpaceCooling

1.International Level : HP in the Climate Change Debate(2)

Although improving building efficiency is often profitable, investments are hindered bybarriers : Including misplaced incentives, distorted energy price/tax regimes, fragmented industry and building design processes, limited access to financing, lack of information and awareness, regulatory failures, etc.

Therefore, only strong policies cancatalyse markets in capturing the potentially cost-effective investments

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Heat pump potential recognized globally

International Energy Agency : IEA

IEA : heat pumps can reduce global CO2 emissions by 8%

Heat Pump Technology Center Japan : heat pumps can reduce Japanese CO2 emissions by 10 %

1.International Level : HP in the Climate Change Debate (3)

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“Energy” is the key word for 3 reasons:

ENERGY

Economy

(Lisbon)

Global Warming

(Kyoto)

Security

(supply)

20% share of Renewable Energy sources by 2020

20% less primary energy use compared to 2020 projections

CO2 eq. emissions : 20% reduction by 2020 against 1990

(30% reduction depending on Copenhagen negotiations)

“20-20-20 policy”

2.European Level : HP in the Energy and Climate Package

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20% less primary energy

20% less CO2 emissions

20% share renewable

energy

1. Developments of criteria for Ecodesign Directive : Water heaters, boilers, air conditioners, heat pumps, …2. Addition and revision of Energy labels3. Revision of Energy performance of buildings Directive4. Ecolabel : the EU ecoflower5. Energy savings Directive

8. the Renewable Energy Source directive, incl. aerothermal, hydrothermal & geothermal energy

6. Regulation on fluorinated greenhouse gases (F gas regulation) 7. Emission Trading

How is the policy translated ?2.European Level : HP in the Energy and Climate Package

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What does EU say about heat pumps ?

ECODESIGN for Energy using products , lot 1, task 7, p. 17 (comparing heating technologies, incl. gas & fuel boilers, CHP,…) :

“Heat pump technologies represent an interesting option with a large saving potential and should be promoted whenever and wherever possible. As such they should therefore have their place in the highest ranks of a labelling scheme.”

A

B

C

D

E

A+++

A++

A+

G

F40%

48%

56%

64%

72%

80%

88%

104%

120%

Ban 2013

Space Heating*

Gas Cond. boiler

Heat pumps are considered as Best Available

Technology HEAT PUMPS

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ENERGY PERFORMANCE FOR BUILDINGS DIRECTIVE

Recast suggested by EU Commission and EU Parliament , now discussed by EU Council :

New buildings : For new buildings Member States shall ensure that, before construction starts, the technical, environmental and economic feasibility of […] alternative systems is considered and taken into account such as : heat pumps

Existing buildings & systems :

Member States may decide to takemeasures to ensure the provision of advice to the users on the replacement of boilers, other modifications to the heating system and on alternative solutions

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DIRECTIVE for the promotion of renewable energy sources :

-Not only geothermal energy, but also aerothermal and hydrothermal energy are renewable energy sources (cfr definitions of RES)

- “Aerothermal, geothermal and hydrothermal heat energy captured by heat pumps shall be taken into account provided that the final energy output significantly exceeds the primary energy input required to drive the heat pumps”.

-In the case of heat pumps, Member States shall promote those that fulfil the minimum requirements of EU eco-labelling

- Member States shall ensure that certification schemes or equivalent qualification schemes become or are available by 31 December 2012 for installers of small-scale biomass boilers and stoves, solar photovoltaic and solar thermal systems, shallow geothermal systems and heat pumps.

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What is the EU Ecolabel ?

ECOLABEL : the EU EcoflowerThe European Ecolabel, also known as 'The Flower' is…

-an official environmental label for products and services established by the EU Commission in 1992 in cooperation with national member states.

- known by 37% of EU citizens

- The EU Eco-label guarantees that the awarded products meet EU-wide valid strong environmental criteria

- Compliance is checked during a certification procedure led by a national Competent Body.

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DIRECTIVE on energy end-use efficiency and energy services :

-Heat Pumps are examples of eligible energy efficiency improvements measures for heating and cooling in residential and tertiary sectors.

-Heat Pumps are “cost-effective, practicable and reasonable measures to contribute to the national indicative energy savings target of 9% by 2017.

-In the evaluation of the National Energy Efficiency Action Plans, the European Commission consider Heat Pumps as part of programmes for more efficient electricity use..

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• Now the Member States have to set up their national action plans to implement the EU policies– Eg. RES, ESD, GPP, EPBD,……

• Heat pumps will be of major importance to reach Member State targets on energy efficiency, CO2 emissions reduction and renewable energy

• National & Regional Incentives to increase the awareness of the end-user.

3.National Level : HP as part of national policies

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Summary Overview Incentives Heat pumps F 2009 (1) Country Incentive Scheme A/A HP A/W HP GS HP Amount Budget Timing

Greece 1/Energy performance improvements(under development)

50% investment 100 Mio € From Nov 09

2/Household replacement Programme

35% equipment price (max 500€)

15 Mio € Since June 09

UK 1/LCBP Phase I

Microgeneration MCS(residential)

1.000€ +51 Mio € for 2009

Since May 09 – June 2010

2/Enhanced Capital allowance(commercial)

1st tax return on investment

3/Renewable heat incentive

TBC TBC From April 2010

4/Carbon Reduction Commitment scheme (commercial)

TBC TBC From April 2010

5/LCBP Phase II(public & non for profit sector)

50% for MCS technologies

From July 2009 – April 2011

XX

UD

UD

UD

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Country Incentive Scheme

A/A HP A/W HP GS HP Amount Budget Timing

France 1/Renewable Heat FundCollective housing

1000 Mio€ 2009-2011

2/Crédit d’impôt(residential)

2009 : 40%

2010 : 25%

2009-2010

3/VAT-reduction(labour

19,6%5,5%

4/Eco-loan with 0%interest

Max loan of 30.000€

2009

Czech Republic

1/State foundation of the CR

50% (max 2325€) Since April 2009

The Nether- lands

1/Energy Investment deduction(commercieel)

11% 145 Mio

2/More with less(residential)

300€ : 20%reduction

750€ : 30% reduction

March 2009 – end 2010

3/Sustainable Heat (residential)

A/W : 1000€

GS : 5000€

Till end 2011

X X

X

X

XXX

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Country Incentive Scheme

A/A HP A/W HP GS HP Amount Budget Timing

Italy 1/replacements of low efficient heating installations

55% tax deduction

2008-2010

2/renovation res buildings

36% tax reduction for renovation res buildings

Germany Renewable heat 600€ - 1500€

Belgium 1/tax deduction 40%

(max 2770€)

2009

2/regional incentives

3/incentives electricity distribution companies

Spain Energy savings and efficieny plans

TBC TBC 2010

X

Cooling not allowed

Cooling not allowed

UD

X

X

+Incentives decreased E-Level

+Incentives decreased E-Level

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UK government commissioned report : heat pumps key to meet RES target

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July 09 : Mr Blair recognises the heat pump potential.

2.Heat pumps can reduce 0.77 GtCO2 in 2050

Heat pumps are 1 out of 17 key technologies which according to IEA’s BLUE Map Scenario will be responsible for approximately 80% of total emissions reductions needed to 2050, equivalent to 42 GtCO2. Heat pumps have the potential to provide savings of 0.77 GtCO2 (1.6% of overall energy-related emissions reduction), if the technology is deployed in 50-70% of buildings in OECD countries by 2050.

1.Heat pumps are most suitable for use in cooling, space heating, hot water and industrial heat.

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Sept 09 : Sarkozy launches Tax on Fossil Fuels during visit at heat pump manufacturer CIAT

The carbon tax would add roughly 80 euros to the annual gas bill of a two-bedroom apartment

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Conclusion

• No doubt about it :

Heat pumps are a key solution on EU and International level to :

- Save energy

- Reduce CO2 emissions

- Use renewable energy sources

The challenges and opportunities of heat pumps on international and EU level

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