Currently, the scale of investment required to make net-zero executable is prohibitive for most building owners. The reason for this lies in the fact projects are too often seen by building owners and project investors as a shot in the dark. These account for the human ‘chaotic’ factor and the variable performance of technology to produce an ‘as used’ energy forecast. The risk of this can then be analyzed according to an insurer’s criteria in preparation for underwriting. But private finance is desperately needed for such retrofits due to the poor balance sheet capacity of landlords. Eight billion private ESG infrastructure funds will be crucial to plugging the funding gap and helping the UK, as well as others, meet the terms of the Glasgow Climate Pact.
The way to attract such funds is by quantifying, mitigating, and insuring heat pump technology in conjunction with other active and passive energy efficiency measures. The deployment of large-scale financing solutions for heat-pump-driven retrofit projects is in an early phase but has significant opportunities to accelerate decarbonization in the built environment. Thinking of decarbonization at scale will be fundamental to aligning supply chains and the training of employees. This issue is clearly seen in the UK, where heat pump installation is stymied by a lack of workers and materials. Parallels can be drawn between the deployment of heat pumps in decarbonization projects and the progress of wind turbines over the past few decades. The first development of utility-scale wind turbines was set up by NASA in the 1970s using government funding. The same journey will be true in the deployment of 5GDHC. Smaller, government-sponsored projects have already been achieved and show the transformative potential of this solution.
Lars Bierlein, Qvantum Energi Laboratory, Sweden
Tim Meanock, Pivot Energy Services, Sweden
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