Is Europe Ready to Eliminate Fossil Fuels for Heating? Insights from the HP Forum 2024
How to transform the heating sector in Europe away from fossil fuel? How to find the right balance between affordability for citizens, competitiveness for industry, and climate ambitions? How can flexibility, digitalization, and the use of artificial Intelligence in combination with heat pumps enable that the renewable energy targets are reached? These questions were all discussed during the HP Forum in Brussels.
On September 25-26, the European heat pump community met up in Brussels for the HP Forum 2024, organized by the European Heat Pump Association (EHPA). During the forum keynote speeches, as well as several panel discussions on different themes and topics, took place. Panellists shared their viewpoints on the various challenges and possibilities for heat pumping technologies to transform the heating and cooling sector.
The Situation for Heat Pumps in Europe
Paul Kenny, the new Director General of EHPA, introduced the meeting, asking the questions – are we serious about getting rid of fossil fuel? Is the European Commission serious about implementing the Fitfor55 package? If the answer is yes, actions are needed from the sector as well as from the policy level. He emphasized that to reach the objectives set out by the Commission, the EU Heat Pump Action Plan, ensuring support to manufacturing and training, is needed. The sector needs to work to ensure a sufficiently good consumer journey for those who want to replace a fossil fuel boiler with a heat pump. In countries like, for example, Sweden, this journey is rather smooth, proving this is possible! Paul Kenny finalized his presentation, talking about his plans to build a strategic action plan for the members of EHPA to deliver 60 million heat pumps in accordance with the objectives of the European Commission.
Martin Hojsík, Vice-President, European Parliament, held a keynote presentation. He pointed out that there is an insane number of roadblocks to transform the market away from fossil fuel. It will need to change some regulations, but moreover, he recommended the sector to approach the end consumer and promote multiple benefits of the technology. To look at a design for improved resilience by combining heat pumps and solar PV as an example.
A second keynote presentation was given by Thomas Pellerin-Carlin, MEP, Group of the Progressive Alliance of Socialists and Democrats. He asked the audience to look back at 2022 when the invasion of Ukraine took place and the RePowerEU policy package, as well as the ETS2 (Emission Trading System for buildings, road transport, and additional sectors), were launched. EU had a high ambition to scale up the deployment of heat pumps and we could note a booming. These policies should have led to continued growth, but instead, the market shrunk again after a sharp increase. Why? The main reason was a lack of policy consistency, primarily on a national level in Germany, France, and Italy, as well as in other countries. Now, policy makers need to reestablish people’s confidence in relying on the fact that electricity prices will be reasonable and fossil fuel alternatives will always be more expensive. He recommended the sector to try to be provocative and creative in their communication with the new European Commission – there is a good window in the EU to reach them now.
During the following panel discussions, panellists shared their viewpoints on various topics.
The situation in Europe, where we are right now, struggling with scaling of green technologies, was discussed and compared to the situation in China and the US, where the progress is much better right now. One of the success factors there are public-private partnerships, since public funding is a strategic enabler to attract private capital to a sector. There, they have created a demand and a supply, while in Europe, many companies have already built new factories to secure supply, but miss the demand. One question raised was – how can we use the money that are already there, like those from ETS, for example. Many panellists shared the opinion that public money should rather be used for investments in infrastructure or industry than for subsidies, even though the latter could be needed to kick-start a market.
The Future for the EU Heat Pump Action Plan
Stefan Moser, Head of Unit, European Commission, Directorate-General for Energy (DG ENER) informed that the EU Heat Pump Action plan will be framed in a heating and cooling strategy and an electrification strategy, with a significant focus on heat pumps. In addition, guidance documents to implement the new regulations in the Fitfor55 package will be published. Moreover, a lot must be defined at the member state level on how to reach the energy efficiency targets and develop heating and cooling plans, including collective and individual solutions. He pointed out that for European as well as for national policy makers, it is of importance to find the right balance between affordability for citizens, competitiveness for industry, and climate ambitions. However, in the end, member states are legally bound to have a plan to get out of fossil fuels by 2040 and to have the policies to make it happen.
One of the panellists pointed out that if we want the electrification of the energy system to continue, the energy bill cannot be the cash cow of the member states. On average, in Europe, we pay 40% taxes and levies for electricity. In the US, this amounts to 10-11%. In addition, it is a much higher tax on electricity compared to gas in Europe – 89 Eurocent compared to 15 on average.
Flexibility, Digitalization, and the Use of Artificial Intelligence (AI)
Flexibility, digitalization, and the use of AI within the sector were also discussed. Rafael Martinez Gordon, Clean Energy Analyst, International Energy Agency, pointed out that if we want to meet the 2030, 40, and 50 emission targets, we need to apply demand response, and heat pumps are one of the solutions. Before, the question was whether the grid could cope with more heat pumps. Now the question has been changed to – can we reach the renewables targets without heat pumps?
Other panellists supported this argument, stating that the building around the heat pumps is a thermal storage facility, and a smart heat pump could enable the use of this storage. The algorithm already exists. AI is not necessarily needed; simple algorithms could be applied. However, AI could help develop better algorithms. Such a model could also learn when there are internal gains, impact from weather, etc., and the machines should be able to respond ahead of time to price models and so on. AI could also make installation and service better and more efficient.
Empowering the Narratives Around Heat Pumping Technologies
The theme of the last session was about how to empower the narratives around heat pumping technologies since they have become politicized lately. This means that the communication around the technology responds easily to installation errors and to information attacks.
This applies especially to Germany, where there was massive hype for heat pumps in 2022 due to a fear of gas shortage. There was a massive rush for heat pumps and subsidies, and the media became very interested in heat pumps. Policy makers declared ambitious targets that 500 000 heat pumps should be installed per year. Thereafter followed a mild winter and not so high gas prices as anticipated. In addition, there were some misinterpretations about a new legislation to replace gas boilers to 2027, which was picked up by journalists. The heat pump euphoria disappeared, the narratives around heat pumps became negative, and some political parties turned against the technology.
To overcome this situation, we need simplified messages about well working heat pumps that people can relate to. We need to continue to provide objective information and try to spread positive messages from normal people that a lot of heat pumps are running well in many countries and regions.
If you want to learn more about the event, you could also take part in EHPA’s press release.