(Bloomberg) -- The invasion of Ukraine has put the US and Europe on a wartime mission to abandon Russian fossil fuels. This series looks at speeding up zero-carbon alternatives by lowering political and financial barriers. Sign up here to get the next story sent to your inbox.
Heat pumps are emerging as a key technology for securing Europe’s energy independence from Russian natural gas.
The highly efficient electrical devices extract warmth from air, liquids or other sources to heat and cool homes and provide hot water, producing more energy than they consume. The war in Ukraine is accelerating the European Union’s efforts to replace fossil fuel heating with heat pumps to meet its target of reducing greenhouse gas emissions at least 55% by 2030, compared with 1990 levels. In March, the European Commission unveiled its REPowerEU initiative that calls for doubling the deployment of heat pumps over the next five years as part of a plan to eliminate dependence on Russian gas. The EU imports 90% of its natural gas, 40% of which comes from Russia.
“Europe sleep-walked into a situation where we were increasingly reliant on Russian gas over the decades and we just have to break the habit,” says Richard Lowes, a heat pump expert and senior associate at the Regulatory Assistance Project, a multinational organization that works on energy decarbonization policy.
Although heat pump installations are rising due to mandates and incentives offered by some countries, they currently supply only 2.5% of the EU’s heating and cooling demand, according to the Regulatory Assistance Project. “The fact is a lot of people have gas heating, they’re used to it and there’s a whole system built for gas that we have to breach,” says Lowes.
Before the war, the EU projected that heat pumps would cut natural gas consumption in buildings 40% by the end of the decade, according to a March 2022 report. That would save nearly 60 billion euros ($63 billion) in annual natural gas import costs, according to estimates.
“Heating was completely unsexy before,” says Thomas Nowak, secretary general of the European Heat Pump Association, an industry group. “Now people are discussing heat pumps at their cocktail parties.”
Retrofitting existing housing to run on heat pumps, however, can be a complicated and expensive proposition, experts say. That’s particularly the case with apartment buildings that are home to nearly half of the EU’s population.
That’s because heating sources, fuels, financial incentives and policies vary widely across Europe and within countries. Oil, gas and coal supply nearly 83% of heating in EU nations, with gas accounting for 66% of fossil fuel boilers, the report states.
How heat is delivered also differs from country to country. For instance, “district heating” dominates in some urban areas and in Scandinavia, Poland and the Baltic states. A central source, such as a boiler or industrial facility, heats water that is distributed through an underground network of pipes to radiators in homes and apartment buildings.
In other countries, a large gas boiler is installed in an apartment building to heat the entire structure or small boilers are placed in individual apartments. (U.S-style furnaces are rare in Europe.)
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Nowak says that there is no one approach to decarbonizing Europe’s apartment buildings. “Since we’re at the beginning of this type of renovation, there’s a variety of technical solutions today,” he says.
One retrofit option that has become more common taps heat from the Earth. Pipes filled with a heat-conducting fluid are placed in boreholes drilled into the ground outside an apartment building. If the building has a central fossil fuel boiler, the boiler is replaced with a large heat pump. The device extracts warmth from the ground array to heat water for distribution through pipes to apartment radiators.
If each apartment contains its own boiler, the boiler is replaced with a small heat pump the size of a mini fridge. The ground array is connected to pipes that loop through the building, transporting the geothermally heated fluid past the apartments. The heat pump in each unit extracts warmth from the loop and increases its temperature for use in space heating and to provide hot water.
Drilling geothermal heat pumps for individual apartment buildings isn’t feasible in densely packed cities. Given the prevalence of district heating in urban areas, Lowes and Nowak say the most effective way to decarbonize housing there is to replace centralized gas and coal-fired boilers with industrial-scale heat pumps. Such heat pumps can also extract warmth from wastewater treatment plants, lakes and other sources.
The cost of retrofitting apartment buildings, though, can be steep and heat pumps require electricity, which is more costly than natural gas in many regions of Europe. Heat pump advocates call for an acceleration of natural gas bans in buildings, more government incentives for retrofits and a carbon tax on gas heating to help spur adoption of the technology.
Retrofit costs vary widely depending on the size of an apartment building, its condition, location and the technology used. It cost £9 million ($11 million) for a 2021 renovation of a gas-powered complex of seven residential towers in the north of England. The retrofit installed a geothermal ground array outside the buildings and small heat pumps in each of the 364 apartments.
One particular challenge, Lowes says, is retrofitting large older homes that have been subdivided into apartments that are individually owned and that each contain a gas boiler. “As a general rule [one] big heating system will cost less than lots of small ones just because it’s more efficient,” he says. “But that’s more complicated to do when you have multiple owners each with their own boiler.”
Novak says that supply chain constraints are expected to affect the availability of heat pumps in Europe for another year. A bigger issue as demand rises is a shortage of workers with the expertise to install heat pumps.
“We're not training plumbers and heating engineers at the rate needed,” says Lowes. “And because it's such an important part of the energy transition, that will rapidly become a hurdle.”
©2022 Bloomberg L.P.