UK Member Country Report

Oliver Sutton, Department for Business Energy and Industrial Strategy (BEIS)

The HPT TCP is part of a network of autonomous collaborative partnerships focused on a wide range of energy technologies known as Technology Collaboration
Programmes or TCPs. The TCPs are organised under the auspices of the International Energy Agency (IEA), but the TCPs are functionally and legally autonomous.
Views, findings and publications of the HPT TCP do not necessarily represent the views or policies of the IEA Secretariat or its individual member countries.

Sept 2022

www.heatpumpingtechnologies.orgIntroduction• Context• Market Summary• Policy• Innovation• Research and Development

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Context – UK Primary Energy Consumption
1990
Primaryelectricity
8%

Coal
32%

Gas
24%

2020 Coal

Bioenergy &waste
0%

Oil
36%

https://www.gov.uk/government/statistics/uk-energy-in-brief-2022

Bioenergy &waste
11%
Primary electricity
11%

3%

Oil
32%

Gas
43%

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Context – UK Sector Energy Consumption

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Context – UK Electricity Generation

Electricity Generated by Fuel Type

50.0%
45.0%
40.0%
35.0%
30.0%
25.0%
20.0%
15.0%
10.0%
5.0%
0.0%

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Coal

Oil & other fuels

https://www.gov.uk/government/statistics/uk-energy-in-brief-2022

Gas

Nuclear

HydroWind & solar

Other renewables

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Context – Heating Systems
Fuel Type

Number ofHouseholds

Mains gas

22 million

Electricity

2.2 million

Heating oil

1.1 million

District heating

420 thousand

Solid fuel200 thousand

LPG

193 thousand

Other4 thousand

Total Households

26.2 million

Typical house gas consumption
13,000 kWh/ySHDHWCooking~4 million GB homes are off the gas grid~1.3 million GB homes use oil/LPG for heatingwww.heatpumpingtechnologies.org

Market – Domestic Heat Pumps Domestic Heat Pump Sales (units)• Domestic heat pump sales remained
relatively constant despite theintroduction of the Renewable Heat
Incentive in 2014.

80,000450,000

70,000400,000• Sales have begun to increase as newpolicy certainty emerges and consumerawareness increases.
• The majority of growth is in air-watermonobloc units which offer lower upfront
cost and lower barriers for installation.

20,000• Gas boiler sales are ~1.6 million units peryear.

300,000

50,00040,000• Approximately 400k heat pumps are
installed in homes today.

350,000

60,000250,000
200,000

30,000150,000
100,000

10,000050,000
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022F

0Ground/ water to water

Air to water –split systems

Air to water –monobloc systems

Air to water combined with heat recovery

Air to water cylinder-integrated DHW HP

Heat Pump Stockwww.heatpumpingtechnologies.org

Market – Non-domestic
Air - Air & VRF Systems 2019
(Capacity)

Air- Air & VRF Systems Annual Sales< 5 kW43%

46%

5.01-7.0 kW> 7.01 kW

Annual Sales (units)

250,000
200,000
150,000
100,000
50,000011%

2015

2016

2017

Single splits

Multi splits

2018

2019

VRF

Many large systems not captured in market data

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Policy - Strategy
Heat and Buildings Strategy 2021
• To meet Net Zero virtually all heat in buildings will need to be decarbonised.
• No new fossil fuel heating in new homes by 2025.
• Phase out fossil fuel heating in off-gas grid buildings by 2026.
• Ambition to phase out the installation of new natural gas boilers from 2035.
• Take major strategic decisions on the role of hydrogen for heat by 2026.
• Aim to grow the heat pump market to deploy 600,000 heat pumps per year by 2028.
• Boiler Upgrade Scheme – Heat pump grants for homes (£5,000 for ASHPs, £6,000 forGSHPs)• Introduce a market-based mechanism to grow the heat pump market and supply chain.
• Rebalance costs of electricity and gas
https://www.gov.uk/government/publications/heat-and-buildings-strategy

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https://www.gov.uk/government/publications/heat-and-buildings-strategy

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Policy - Strategy

Government is committed to delivering 300,000 new homes each year
from the mid-2020s. New homes have low heat demand and no expensive
retrofit costs, so are well suited for heat pumps.

There are over 5m homes and businesses off the gas grid which
use oil, LPG or resistive electric heating. UK Government
has already announced plans to phase out high carbon fossil fuelheating in 1.3m buildings off the gas grid in the 2020s. For thesebuildings, heat pumps are typically the most cost effective lowcarbon heating solution.

NewBuild

Off Gas Grid
Buildings

The optimal solution for the 24.5m homes andbusinesses on the gas grid is uncertain and may vary
locally. Options include heat networks, efficient electricheating solutions, like heat pumps, or replacing gas
with low-carbon alternatives: hydrogen or biogas.

On Gas Grid
Buildings

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https://www.gov.uk/government/publications/the-ten-point-plan-for-a-green-industrial-revolution

Policy – Heating Systems•

Renewable Heat Incentive (RHI)– Introduced for non-domestic in 2011 and domestic 2014
– The first “feed-in tariff” for renewable heat.
– Receive a price/kwh of renewable heat produced andpaid over the lifetime of the installation– For heat pumps, biomass boilers, solar thermal,biomethane/biogas, deep geothermal.
– Closed in March 2022•

Boiler Upgrade Scheme– Provide upfront grants for heat pumps and biomassboilers– £5,000 for ASHP or biomass boiler, £6,000 for GSHPs

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Innovation
BEIS Energy Innovation Programme(£505m 2015 – 2021)~£90m for project on the built environment•

Electrification of Heat Demonstrator – installing
750 heat pumps in homes, monitoring their useand aiming to demonstrate cost reductions•

Challenge funds for low carbon heating – tosupport a variety of innovative projects

https://www.gov.uk/guidance/energy-innovation

BEIS Net Zero Innovation Portfolio(£1bn 2021 – 2025)
10 Priority Areas• future offshore wind
• nuclear advanced modular reactors• energy storage and flexibility• bioenergy• hydrogen• homes• direct air capture and greenhouse gas removal (GGR)• advanced carbon capture, usage and storage (CCUS)• industrial fuel switching• disruptive technologies

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Innovation
BEIS Heat Pump Ready Programme (£60m 2022 2025)•

Stream 1: solutions for high-density heat pump deployment.
Challenge funds for low carbon heating – to support a variety ofinnovative projects.

•

Stream 2: developing tools and technology. Up to £25 million ofgrant funding for projects to overcome barriers to heat pump
deployment.

•

Stream 3: trial support and learning. Up to £5 million contractfrom spring 2022.

https://www.gov.uk/guidance/energy-innovationwww.heatpumpingtechnologies.org

Research•

Large thematic area of end-use energy
demand•Research tends to focus on heat pumps insystems rather than component level•

Specific expertise on gas sorption heat pumps,
energy storage, whole energy system modelling,https://www.gov.uk/government/collections/heat-pump-researchbuilding simulation modellingwww.heatpumpingtechnologies.org

Summary• Heat pumps in the UK are currently a niche market in homes but widely used incommercial buildings.
• The market is growing steadily but new policy developments are expected toincrease this in specific areas e.g. new build, off-grid buildings.
• Ambition for high levels of heat pump deployment with key decisions around therole for hydrogen in heating needed in the next decade.
• Significant barriers remain around suitability of the building stock, consumerawareness, gas/electricity price ratio and upfront cost of systems.
• Current energy price crisis raising the profile of heat pumps as an option.
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