Climate Action

How to transition to an era of smart heat pumps

Heat pumps have a higher efficiency than other traditional sources by taking heat to and from their surroundings.

Retrofitting residences and commercial buildings with heat pumps will reduce energy consumption and carbon emissions. Image: Image by Freepik

Madhuban Kumar
Chief Executive Officer, CarbonLaces
Jonathan Gilmour
Utilities Energy Transition Consultant, Accenture
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  • Heat pumps have a higher efficiency than other traditional sources by taking heat to and from their surroundings.
  • The UK has a target for all new heating systems to be low carbon by 2035, though key challenges will need to be overcome to achieve this.
  • Flexible, connected and smart heat pumps are a viable decarbonisation tool and could provide a path to energy efficiency and emissions cuts.

In the UK, we face three major crises: rising cost of living, energy security and climate change. The challenge to decarbonise heat is contributing to these crises. According to the Energy Systems Catapult, heating makes up 37% of the UK’s total Greenhouse Gas (GHG) emissions.

The UK can decarbonize heat in four main ways: electrification, district heating, biofuels and hydrogen. This article will focus on the electrification of heat using heat pumps.

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Heat pump benefits and challenges

Heat pumps have been around since the 1850s and have a higher efficiency than other traditional sources by taking heat to and from their surroundings. They use electricity to generate heat more efficiently than other forms of heating, such as gas, oil and LPG boilers. Retrofitting residences and commercial buildings with heat pumps reduce energy consumption and carbon emissions, and helps the UK drive towards net zero.

The UK government has predicted growth of 600,000 heat pump installs per year by 2028 and a target for all new heating systems installed to be low carbon by 2035.

smart heat pumps benefits challenges forecast UK
Figure 1 – UK Heat Pump Forecast Image: Jonathan Gilmour and CarbonLaces

However, some key challenges will need to be overcome for the government to achieve their goals.

1. Lack of awarenessonly 27% of people in the UK know what air source heat pumps are, and many have misconceptions about how they work and are used. This will need to be overcome to increase adoption.

2. Fragmented supply chain – there is a lack of skilled and trained heat pump installers across the UK, yet they are vital to enable a roll-out of heat pumps at pace across the country.

3. High upfront investment – compared to gas boilers, heat pumps cost more, take longer to install, and often require significant amounts of retrofitting beforehand.

4. Lack of accurate and accessible data – the data on UK properties and homes is incomplete, not up to date and hard to access, which makes understanding customers’ needs difficult.

5. Lack of integration – it can be challenging to integrate and connect heat pumps with new low-carbon technologies such as electric vehicles under one proposition for the customer.

6. Grid congestion – the share of electricity generated from variable, intermittent renewable energy sources is rising considerably, and the demand for energy and grid capacity is increasing due to the growth in technologies such as electric vehicles and heat pumps. This is leading to balancing and congestion problems in the grid.

7. Regulatory barriers – grants, levies and charges do not incentivise the switch from gas.

One way heat pumps can solve some of these challenges is for the heat pumps installed to be flexible, connected and smart.

Flexible heat pumps are heat pumps coupled with thermal energy storage that can be used for demand-side flexibility. They provide the ability for the electricity consumption of the heat pump to be reduced and shifted to help balance demand and supply. Therefore, flexible heat pumps can be used to help integrate intermittent renewable electricity generation into the grid and help solve balancing congestion problems, particularly in winter, and manage daily peaks.

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Demand response is mainly limited to large industrial consumers for heat pumps. However, due to an increasing number of residential heat pumps being installed and the heat demand for them not being time-critical, they have the potential to be used for flexibility.

Connected heat pumps are heat pumps connected to the internet. Only 23% of all heat pumps are connected to the internet, and hardly any of them can be controlled remotely. Therefore, most systems cannot be used for demand response. This is beginning to change, where heat pump control systems can now be connected directly to the internet or through a gateway, an essential enabler for flexibility.

Smart heat pumps are connected and allow the user to take control of their heating. A straightforward way of securing your heat pump to the internet is via smart thermostats.

Smart thermostats are programmable and can be used to develop a tailored plan for each home based on its heat profile, taking advantage of time-of-use tariffs to shift heating demand away from expensive high carbon demand times and make the most of low carbon, cheap off-peak power. This enables customers to control their heating and reduce energy consumption and bills.

Cost and Carbon Comparison of technologies smart heat pumps
Figure 2 – Cost and Carbon Comparison of technologies Assumptions: 2022 UK GOV GHG Conversion Factors, £5k Grant for ASHP, 10-year timeframe, Oct 2022 electricity price cap of 34.0 per kWh, Oct 2022 gas price cap of 10.3p per kWh, LPG price of 12.2p per kWh, heating oil price of 10.4 per kWh, Annual heat usage of 12,000 kWh and flexibility reduces annual heat usage by 20%. Image: Jonathan Gilmour and CarbonLaces

As seen in Figure 2, assuming flexibility saves the customer on average 20% in energy over a year, this can result in the total cost of air source heat pumps becoming cheaper than gas boilers, and can make them significantly more affordable than oil and LPG boilers over 10 years while emitting less carbon. Flexibility drives a reduction in total carbon emissions and widens the gap between heat pumps versus the alternatives. Oil and LPG households are most incentivised to switch to air source heat pumps and with 15% of the UK not on the gas grid; there is a significant opportunity to begin the heat pump transition with these households.

Flexible, connected and smart heat pumps have emerged as a viable decarbonization tool and could provide a path to energy efficiency and emissions reductions. They now require further investment in technology, innovation and engagement with customers and industry to enable the market to scale.

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