Energy resilience: Why energy efficiency must be at the heart of the heat electrification agenda

Rising fossil fuel costs have focused attention on energy security and energy resilience like never before, leading to greater awareness and understanding about fuel and energy sources. This, of course, is coupled with a rise in consciousness of the most efficient ways to use energy.

Across the UK and Europe, government strategies for heating and energy supply aim to drive decarbonisation. They have prompted debate about whether they propose the right mix of fuel sources - renewables, nuclear, hydrogen - to achieve electrification and net zero targets, and global events have added new urgency to the question of where we get our energy from.

We need to be more mindful of two things: how much energy we consume and how to reduce the amount of energy we use in the first place. Lowering demand makes it easier to switch supplies from unreliable or undesirable sources, to controllable domestic sources - without needing to expand the capacity of those domestic sources more than is necessary.

For example, almost 80 per cent of domestic energy is used for heating and hot water production, making it an excellent starting point in terms of demand reduction, electrification and decarbonisation. And that's where heat pumps look set to become the preferred heating technology for the residential sector. And this is also true for commercial applications.

The policies needed to drive 'greener' heating across Europe

Let's take a look at what's driving the market - and the factors accelerating change. Launched in May 2022, the European Commission's REPowerEU Plan aims to reduce reliance on fossil fuels and make the EU member states more self-sufficient and energy resilient. It is also a key element of policy at a time when many consumers are struggling with impact of the rising cost of energy.

We welcome the aims of the REPowerEU Plan. The intention is to lead, and speed up, the sustainable energy transition, especially through electrification. By building on existing initiatives, like the European Green Deal and the ‘Fit for 55' climate package, the plan is designed to also boost the EU economy and industry.

The plan understands the importance of scaling up power generation by renewable means. To that end, the Commission will end subsidies for fossil fuel heating equipment and double the current rate of heat pump deployment.

Renewable technology generally, and heat pump adoption in particular, fit into the bigger picture of long-term energy efficiency in buildings. The effects of this are being seen in individual EU member states.

In Germany, energy efficiency standards for new buildings will be drastically improved, and heat pumps will become almost mandatory in new buildings from 2024 with regulations stating that a heating system needs to be powered by 65% of renewables and potentially 500,000 units to be installed every year. In the Netherlands, meanwhile, the uptake of renewables-based heating is being mandated, with heat pump training locations being established in every region.

The policies that could drive UK heat pump uptake

Now it is separated from EU policy-making, the UK seeks to portray itself as being at the forefront of standards and ambition. Its own Energy Security Strategy was published in April 2022, but met with a lukewarm response due to a lack of support for energy efficiency measures that would contribute to lowering energy demand.

While campaigners continue to urge a coordinated and large-scale domestic retrofit strategy, there are nevertheless, initiatives aimed at supporting the wider adoption of renewables.

The future direction of the Building Regulations has been set to generate increased demand for heat pumps. The Part L 2021 ‘uplift' is designed to prepare the supply chain for installing heat pumps as part of the Future Homes Standard and Future Buildings Standard from 2025.

In existing properties, a boiler upgrade scheme offers homeowners £5,000 towards the cost of an air source heat pump. In addition, for the next five years, VAT will be zero-rated on ‘Energy Saving Materials' such as insulation, solar panels and heat pumps. And a range of retrofit and energy efficiency schemes have been implemented for social housing over the last few years.

All of these policies and subsidies are working together to achieve positive impacts. The move away from fossil fuels and the promise to generate one of the biggest heat pump markets in Europe is indeed a major contribution to net zero (2050).

Ultimately, the drive for change is being felt at the grass roots level. Programmes to train installers and grow the base of competent installers are well underway in the UK. There are, however, still areas where the full impact of investment in the skills base - such as in colleges and apprentice schemes - is not yet fully realised. But, for the first time we feel that change is coming and that for once, the policies and the subsidies could well follow the intention and actually become a reality.

What needs to happen next?

From a pure performance perspective, Panasonic's own heat pump technologies are around four times more efficient than a conventional gas boiler. Although heat pumps require a slightly higher capital outlay than gas boilers, the commercial arguments are working in their favour. The volatile - and rising - cost of fossil fuels makes a heat pump a more attractive long-term option. A return on investment can be expected in around five years.

In other words, the solution already exists, and interest among consumers - and the wider stakeholders including building owners / developers / managers and architects - is increasing. To capitalise on that interest the marketplace needs to be capable of delivering the required levels of service and quality. Manufacturers, including our own business, are working hard to ensure there is sufficient educational support for installers to enable heat pump deployment at scale.

We take our own role as educators seriously, recognising that distributors, developers and installers need to expand their heat pump know-how - so they can recommend and specify low carbon installations.

In the UK market, for example, it is reassuring to see documents like the Department of Business Energy and Industrial Strategy (BEIS) and Chartered Institute of Building Services Engineers (CIBSE) joint guidance on heat pump installations in non-domestic buildings, which will help to promote heat pumps to the very engineers who need support.

Nobody can be expected to undertake a journey like this alone, and manufacturers like us have a significant role to play in giving our installers and other partners the right tools and training to deliver to customers.

It's clear that a commitment to invest in the future in essential. At Panasonic, we are setting up four UK training centres to help educate installers about the change from fossil fuel technology to heat pump technology, including topics such as electrical knowledge, refrigerants and maintenance. In total, we have established 37 training centres in 19 countries in Europe (including the UK) - and our Panasonic colleagues are working hard to support the wholesalers through training, development and materials.

Supporting the widespread deployment of heat pumps is one part of Panasonic's environmental commitment. Panasonic's GREEN IMPACT sustainability programme aims to eliminate the one per cent of global emissions for which it is responsible throughout its entire value chain and the impact of around one billion of its products in the market. More than 70 per cent of our turnover is from products we're not commonly known for, including ‘clean tech'. We assess the impact of our operations from manufacture to end use, and are aiming to deliver greater efficiencies throughout the whole life cycle.

Enrique Vilamitjana is managing director of Panasonic HVAC Europe. To learn more about the company's green initiatives, watch Panasonic UK country manager Jose Alves in conversation with BusinessGreen's James Murray as they discuss the opportunities and challenges facing the sustainable heating and cooling markets in the UK and Europe.

This article was sponsored by Panasonic, a partner of the Net Zero Innovate Hub.