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Heat Pumps Essential for Countries to Reach Long-Term Climate Goals – Report from HPT TCP Member Country Report Workshop

Denmark, Germany, and South Korea have a high ambition to integrate heat pumps into both the building and industrial sectors since it is seen as essential for reducing greenhouse gas emissions and, achieving their long-term climate goals, and decreasing their dependency on fossil and biomass fuels for heating. They experience varied progress and challenges in the deployment of heat pumps, and the presentations revealed that further deployment of heat pumps could be a challenge as well as one of the solutions for a strained electric grid. The presenters underscored the importance of continued innovation, policy support, and addressing grid capacity issues as countries work toward achieving carbon neutrality.

September 10, 2024  –The Technology Collaboration Programme on Heat Pumping Technologies (HPT TCP) by IEA held its Member Country Report workshop, bringing together ExCo delegates, leaders, and participants of international collaboration projects and other stakeholders interested in the technology. The workshop provided a platform for experts from Denmark, Germany, and South Korea to share insights into their respective heat pump markets. The event aimed to facilitate knowledge exchange on market trends, policy measures, and the future of heat pump technologies, with an emphasis on energy efficiency and carbon reduction.

Denmark’s Heat Pump Market: Progress and Grid Challenges

Denmark’s transition toward carbon neutrality has made heat pumps a key component of its energy strategy. However, despite significant progress, the market faces challenges, including a sharp decline in heat pump sales. In 2023, air-to-water and ground-water heat pump sales dropped by 41% and 25%, respectively, and 2024 has seen even steeper declines. Nonetheless, Denmark remains focused on phasing out gas and oil burners in favor of heat pumps (distributed) and district heating. In addition, biomass consumption in the district heating is expected to be switched to large heat pumps.

Government policies are heavily focused on reducing greenhouse gas emissions by 70% by 2030 and achieving full carbon neutrality by 2045. Financial incentives are in place to encourage heat pump adoption, but the accelerated deployment of these technologies is placing increasing pressure on the electric grid. Denmark is now exploring solutions such as tariffs and ancillary service markets to stabilize the grid, one of the solutions being integrating large district heating heat pumps and connect them to these markets. Click here to get access to the presentation:

Germany’s Heat Pump Market: Growth and High Costs

Germany has seen considerable growth in the heat pump sector, particularly in new residential builds. Between 2021 and 2023, sales of domestic hot water heat pumps surged by 81%, reflecting a nationwide push toward sustainable heating solutions. However, the market faced a slowdown in 2024, with heat pump installations declining by 54% in the first half of the year.

Germany’s updated Climate Change Act aims for climate neutrality by 2045 and a 65% reduction in emissions by 2030. Incentive programs support the replacement of outdated gas and oil heating systems, but the high cost of electricity continues to be a major barrier for the widespread adoption of heat pumps. The price ratio between electricity and gas remains unfavorable, making it challenging for consumers to switch to heat pumps, especially in rural areas. Click here to get access to the presentation:

South Korea’s Heat Pump Technology: Energy Challenges and Opportunities

South Korea is actively advancing heat pump technology as part of its 2050 carbon neutrality plan. While industrial deployment is progressing, with significant projects like the 3.5 MWth heat pump for the papermaking process, the residential market remains sluggish. Over 92% of Korean households rely on natural gas, which is cheap and highly accessible.

The country’s isolated electricity grid presents additional challenges for heat pump adoption, particularly during peak demand periods in summer and winter. A study estimates that the widespread use of residential heat pump water heaters could increase electricity demand in Seoul by 30%, further straining the grid.

Despite these challenges, South Korea’s efforts to integrate heat pumps into both residential and industrial sectors are seen as essential for reducing greenhouse gas emissions and achieving its long-term climate goals. Click here to get access to the presentation:

The member country report presentations highlighted the varied progress and challenges faced by different countries in the deployment of heat pumps. The presentations underscored the importance of continued innovation, policy support, and addressing grid capacity issues as countries work toward achieving carbon neutrality.

For more information on the workshop and member country reports, visit the HPT TCP website.

Agenda:

 Welcome and introduction by Heat Pump Centre (HPC).

Denmark’s presentation of their Member Country report

 South Korea’s presentation of their Member Country report

Germany’s presentation of their Member Country report

 

Presentations from previous Member Country Report workshops can be found here: