Tracking Progress: Renewable heat
Heat accounts for more than 50% of final energy consumption and remains largely fossil fuel-based. Growth in renewable heat has been steady but slow, and an increase of 32% would be needed between 2014 and 2025 to meet 2DS goals. Solar thermal heating would need to see the largest increase, but if its recent slowdown in growth continues, it will not be on track.
The direct use of renewables for heat (modern biomass, solar thermal and geothermal) increased by 8%, from 13.2 EJ in 2010 to 14.2 EJ in 2014. More than one-third of this increase was due to the consumption of renewable heat in China, mostly through the rapid growth of solar thermal installations. Currently, the European Union is the largest consumer of renewables for heat, with almost 15% of its heat demand met by renewables. In the emerging economies, Brazil has one of the highest shares of renewables used for heat (37%), due to using biomass in industries such as food, paper and pulp, and ethanol.
Biomass (excluding the traditional use of biomass) accounts for 90% of renewables used for heat, with a variety of heat applications in the buildings and industry sectors. Biomass use for heating in the European Union has grown steadily and accounted for over 60% of all wood pellet demand in the European Union in 2015. However, some evidence indicates that low heating oil and LPG prices have constrained the growth of biomass heating in some countries, especially in the off-the-gas-grid segment where biomass tends to be most competitive.
Solar thermal (mainly used for water heating) has increased more rapidly than renewable heat as a whole. However, the rate of new installations has slowed in the last two years due to a slowdown in China and sluggish growth in the European Union. In 2015, the total newly installed capacity was 40 gigawatts thermal capacity (GWth), 15% lower than in 2014. In countries with high levels of insolation, solar thermal systems can be very cost-competitive with electric or fossil fuel alternatives. Elsewhere, large installations can provide economies of scale. The world’s largest solar thermal plant entered operation in Silkeborg in Denmark at the end of 2016 and is expected to produce 80 000 MWh for use in the local district heating network.
Electric heat pumps also play an important role in heat decarbonisation, through the use of renewable heat stored in the ground, air and water and the rising share of renewables in electricity supply. Heat consumption from heat pumps is estimated to have increased by 7% since 2010, with the fastest growth (50%) in China.
Good potential exists globally for renewable heat, but remains largely unexploited. Growth in renewable heat has not matched that of renewable electricity. The direct use of renewables for heat would have to increase 32% between 2014 and 2025 to meet the 2DS target, with faster growth needed in the non-biomass segments. For example, solar thermal heat consumption would have to almost triple by 2025. This growth would require an annual deployment rate more than twice that of current levels. Achieving that level is unlikely unless deployment in key countries, including China and India, picks up. Heat pump use would also have to increase more rapidly than in recent years, coupled with rapid deployment of renewable electricity.
Renewable heat continues to face numerous economic (e.g. high capital costs, split incentives, and fossil fuel subsidies) and non-economic (e.g. lack of awareness, lack of confidence, and suitability issues) barriers. To address these barriers, increased policy support and policy consistency are needed. Governments should set targets and develop strategies for heat decarbonisation. To be effective, these need to cover all sectors and consider the appropriate balance between renewable heat deployment, heat electrification and energy efficiency improvement. An expansion of district heating networks can also play a role, allowing economies of scale to be exploited, as well as better control of air pollutants in the case of biomass. Due to the fragmented and decentralised nature of heat supply, heat planning at the local level can make an important contribution. Other policy instruments that have been shown to be effective include carbon taxes, building codes that require renewable heat installations in new buildings, and financial support mechanism.
Published: 16 May 2017Download Full Report