Heat pumps were highlighted at IEA’s Global Annual Conference on Energy Efficiency as one of the most important super-efficient appliances paving the way to Net Zero

IEA’s 7th Annual Global Conference on Energy Efficiency took place on June 7-9 in Sönderborg in Denmark. Energy efficiency is high on the agenda these days, due to the climate crisis as well as the wish to reduce the dependence on Russian fossil fuels. The overall message from the conference is that energy efficiency measures should be the first choice in mitigating both these crises since it results in reduced cost, reduced dependence on fossil fuels and reduced emissions – moreover, they can be implemented right away! In many cases, we do not need to wait for future innovations. Heat pumping technologies were raised as an important part of the solution, both when it comes to the heating of buildings and industries and also for efficient cooling. It contributes to improved energy efficiency as well as an increased share of renewables in the energy system. Thereby heat pumping technologies contribute to increased security of supply!

During the conference, a couple of speeches and presentations were given, but mostly the program consisted of panel discussions where policymakers and representatives from industry, the financial sector and technical experts held fruitful and interesting discussions. Many of the presentations and discussions revealed that actions to increase energy efficiency are not taken often and quick enough, even though the right technology is existing, and the measures would be profitable. The various obstacles, barriers but also solutions were discussed during the days – and to conclude, in many cases partnership and joint actions by policy, industry and financiers would be the key! However, investors need to be informed and educated about the possibilities.

ESCOs – Energy Services Companies

Brian Motherhood, from IEA, started on the first day of the conference. He said that governments from 60 countries, of which 20 on the ministerial level, were present at the conference. He stated that energy efficiency is of high importance, progress needs to double, and investments need to increase. However, governments cannot do this alone, they cannot cover all the investments needed. This is where ESCOs (Energy Services Companies) comes in. They have the right knowledge of what to be done. However, ESCOs cannot operate without the right policy measures in place and not without access to financing for the measures. Thereafter followed sessions about ESCOs and in what way they will be able to contribute to that energy efficiency measures are realized and which type of support they would need from a policy. It could be concluded that in many cases a partnership between ESCOs, the client (building owner or industry), representatives from the financial sector as well as from insurance companies could be the solution. Such partnerships must be able to deal with risks properly and they should be supported by policy. Very often ESCOs have challenges with financing. They get the needed loans for the first projects, but thereafter they get problems since they do not fulfill the normal financing requirements. Often, also their clients meet challenges with investments since energy efficiency is not their core business. To conclude, the financing market is not sufficiently well set for the financing of energy efficiency measures, even though it is a low-risk investment, even though sometimes with longer payback times. In addition, financing alone is not sufficient to solve the problem – aggregators, educators, and regulators are also needed.

Super-efficient appliances pave the way to Net Zero

On June 7, a very interesting panel discussion about Heat Pumps, and what can be done to deploy the most efficient equipment quickly enough, took place in a session titled “Super-efficient appliances pave the way to Net Zero”. Caroline Haglund from Heat Pump Centre was one of the panelists. During the discussion, the audience could learn about the Electric Ireland Superhomes, a one-stop-shop for a home energy retrofit, challenges related to supply chains and the lack of components that manufacturers experience right now and that there is no lack of installers in Europe, maybe of heat pump installers, but installers could be retrained. It was also discussed how finance could be unlocked to enhance the energy efficiency, how to create incentives and that emissions should be controlled beyond reporting. Caroline Haglund Stignor shared in her intervention the success factors behind the phasing out of oil heating in detached houses in Sweden, to a large extent by the installation of heat pumps. To summarize, she concluded that it helps if clean heating is the most economically attractive solution for the end-user, and this can be achieved by the introduction of carbon pricing, adjusting levels of tax, VAT and subsidies. However, often more than one policy measure is needed to transform a market, a combination, and measures that creates awareness and builds confidence in the technology must not be forgotten. Finally, investment in R&D to continue the development of the technology and its systems is of high importance! Thomas Nowak, from EHPA, emphasized in his concluding remark, that the massive roll-out of heat pumps which is envisaged in the IEA Net-Zero by 2050 Roadmap as well as in the REPowerEU communication shall be realized. Policymakers need to set priorities for the technology and establish a Heat Pump Accelerator.

During this session, there was also a deep dive into industrial electric motors, since they are on significant electricity consumer on a global level. At the same time, efficient technology is available but not applied in many parts of the world. A policy solution to this would be to “maximize the minimum and incentivize the maximum” referring to the MEPS (minimum efficiency performance standards).

The value of early action on Energy Efficiency

On June 8, the Minister of Energy from Denmark, Dan Jorgensen, gave an opening presentation. He said that investments in energy efficiency will often pay themself in a few years. Energy efficiency is a win-win-win. It helps us save the planet and we will save money doing it!

Fatih Birol, the Executive Director of IEA, held an opening presentation. “We are in the middle of the first global energy crises – this crisis may be the turning point”, he said. He emphasized the triple benefits of energy efficiency – reduced cost, improved security, and reduced emissions. He also stated that if all countries just had the right energy policies and incentives and apply existing technologies, the world would save the same amount of energy that China uses today. He also talked about cooling. In many countries, cooling is the number one driver of electricity consumption. In Southeast Asia, only 15% have Air Conditioners (AC) and in India less than 10%. The numbers are much higher in Japan and USA. The very tragic fact, however, is that in Southeast Asia an AC requires three times more electricity to give the same cooling as in Japan.

Thereafter followed a panel discussion. Kadri Simson, the European Energy Commissioner talked about the EU has decided to reduce its dependence on fossil fuels from Russia. There are three principles – diversification, accelerating the rollout of renewable energy and saving energy. The higher demand the higher the prices will be. Immediate energy savings can be achieved by behavior. The deployment of heat pumps and the development of sustainable district heating systems is an important part of the strategy to reduce the dependence on fossil fuels. Phase-out of fossil fuel boilers just for space heating would reduce the energy use by 8%. She said that the cooperation between the EU and IEA has been tighter than ever.

During the discussion, it was also stated that the energy efficiency measures would work faster than building new renewables. The two strategies must go hand in hand.

Amina Mohammed, from the UN, talked about the importance of making energy efficiency retrofits of buildings and using excess heat from supermarkets and data centers. This would result in lower cost, lower fuel imports, and lower emissions! Tripe benefits!!

The CEO of Danfoss talked about how they work with energy management at their industrial sites. First, they make sure to use less energy, thereafter they are reusing the energy they have on the site (from ventilation, data centers and production). Finally, they use green renewable energy for the remaining part.

Minister of Energy of Ukraine, German Galuschenko participated via a link in the conference. He told the audience about how they every day repair their energy infrastructure, again and again. More than 5 million have been cut off from the electricity supply and many have no gas in their house. He emphasized that they need more reliable sources – not only NOT from Russia, but also sustainable and low carbon.

Efficient Cooling for Global Development

On June 7 there was also a session about Efficient Cooling for Global Development

The question “How do we meet the rising demand for cooling?” was discussed. It is of importance not to lose the people part of the equations. Cooling is fans, cool chains and Air Conditioners and there was a call for policymakers and industry to collaborate and set common ambitions. On the question “What can be done to make energy-efficient cooling more affordable and accessible for more people?” several answers were given – the design can be changed, 3D printing can be used to enable local production, and R&D is needed, innovation is needed. As much as possible of the equipment should be produced locally.

Another questions discussed were “How can policy tools help us beat climate challenge in your country?” and “What do you want to happen at the next COP meeting related to cooling?” One of the answers given was that all governments should agree on the same ambitious efficiency standards for the most important product groups.AC, refrigeration devices, electric motors, bulbs.

Accelerating policy implementation for resilience, affordability and climate

A panel discussion about accelerating policy implementation for resilience, affordability and climate was held. Kelly Speakes-Backman from DOE, United States, talked about Bidens’ ambitions to cut the emissions by half until 2030 and to have a clean electricity grid by 2035. She said that the case for energy efficiency has never been more urgent since its booster energy security. Representatives from industry, i.e., the CEO of BASF and the CEO of Alfa Laval talked about how they work with decarbonization and energy efficiency in their industries, e.g., to use large-scale industrial heat pumps to produce steam. A concern was also raised about the European regulatory landscape, related to energy – there was a fear that Europe is getting “over-regulated” which will kill entrepreneurship. The regulatory framework should set the floor, and an efficient CO2 price could be the solution, giving a sufficient framework. Decarbonization needs to be a business case to make sense. It is also of importance that policy sponsors the first movers – demonstrations and pilot plants – to reduce risks.

To conclude, quoting Fatih Birol, the Executive Director of IEA “I don’t know any other solution like #EnergyEfficency that can simultaneously address our economic crisis, energy crisis & climate crisis. And it is the reason why at the IEA we say efficiency is the very first fuel”.