Heating

Tracking Clean Energy Progress

Not on track

Sales of heat pumps and renewable heating equipment such as solar hot water systems have continued to increase by around 5% per year since 2010, representing 10% of overall sales in 2018. Fossil fuel-based equipment, however, still makes up more than 50% of sales, while less-efficient, conventional electric heating equipment adds another 30%. To be in line with the SDS, the share of heat pumps and renewable heating needs to reach 25% of new sales by 2030.

Thibaut Abergel
Lead author
Contributors: John Dulac, Chiara Delmastro

Heating technology sales

	Renewables	District heat	Heat pumps	Conventional electric equipment	Fossil fuel equipment
2010	144955	352463	73391	676908	2058485
2011	157960	361794	81826	693358	2060352
2012	168046	368604	97590	720030	2081250
2013	192606	376856	102360	750983	2137516
2014	206295	382360	107510	778733	2208325
2015	214809	391946	114016	808070	2282411
2016	220850	407381	120363	844521	2333366
2017	227575	409252	126698	868416	2380136
2025	470796	530756	441114	1053850	2039797
2030	749850	678565	708184	1136546	1589313
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Note: excludes traditional use of biomass. 2018 estimated.

Back to Buildings sector | TCEP overview 🕐 Last updated Thursday, June 6, 2019

Tracking progress


Energy use for space and water heating has remained stable since 2010, with heating energy intensities decreasing by only 3% per year since 2010 – roughly the same rate as floor area growth.

Much of this is owing to energy intensity improvements in major heating markets such as Canada, China, the European Union, Russia and the United States.

Nevertheless, fossil fuels still supply most space heating and hot water production needs in buildings and direct emissions from heating in buildings have remained stable since 2010 as a result.

Trends in equipment sales

Fossil fuel-based and conventional electric equipment, such as electric resistance heaters and electric water heaters, continue to dominate the global buildings market, accounting for more than 80% of heating equipment stock in buildings globally, excluding traditional use of biomass.

In recent years, condensing gas boilers with efficiencies typically higher than 90% have gradually displaced coal, oil and conventional gas boilers, which frequently register efficiencies of less than 80%. 

But progress is not fast enough to fulfil SDS ambitions, which call for the use of high-efficiency fossil fuel-based equipment (e.g. condensing boiler technologies) at the very least, and a drastic shift to clean energy technologies such as heat pumps and solar thermal heating.


Energy performance of space heating and water heating

Heating energy intensities are decreasing, but at roughly the same rate as floor area growth.

	Eurasia	OECD Europe	OECD Americas	World	Middle East	OECD Pacific	Africa	China	India	Latin America	Other Asia
2000	0.02869	0.01500	0.01325	0.01348	0.00876	0.01030	0.00710	0.00612	0.00559	0.00372	0.00335
2001	0.02793	0.01563	0.01228	0.01324	0.00938	0.01003	0.00711	0.00583	0.00557	0.00361	0.00336
2002	0.02641	0.01485	0.01209	0.01269	0.00921	0.01004	0.00707	0.00562	0.00547	0.00355	0.00332
2003	0.02674	0.01513	0.01220	0.01275	0.00900	0.00959	0.00703	0.00558	0.00549	0.00347	0.00327
2004	0.02586	0.01499	0.01161	0.01242	0.00934	0.00934	0.00705	0.00572	0.00536	0.00349	0.00324
2005	0.02422	0.01488	0.01123	0.01186	0.00956	0.00937	0.00698	0.00537	0.00508	0.00353	0.00316
2006	0.02437	0.01445	0.01025	0.01135	0.01003	0.00874	0.00698	0.00535	0.00459	0.00349	0.00312
2007	0.02406	0.01308	0.01060	0.01101	0.01009	0.00847	0.00690	0.00519	0.00462	0.00367	0.00311
2008	0.02357	0.01366	0.01050	0.01091	0.00887	0.00790	0.00680	0.00486	0.00481	0.00347	0.00304
2009	0.02149	0.01329	0.01033	0.01056	0.00857	0.00802	0.00675	0.00474	0.00524	0.00344	0.00306
2010	0.02145	0.01426	0.01016	0.01061	0.00806	0.00791	0.00643	0.00466	0.00499	0.00351	0.00302
2011	0.02190	0.01222	0.00998	0.01000	0.00797	0.00773	0.00644	0.00470	0.00460	0.00344	0.00298
2012	0.02097	0.01270	0.00887	0.00966	0.00730	0.00754	0.00643	0.00472	0.00452	0.00347	0.00299
2013	0.01992	0.01271	0.00986	0.00983	0.00763	0.00767	0.00641	0.00476	0.00421	0.00366	0.00291
2014	0.01998	0.01095	0.01004	0.00942	0.00758	0.00750	0.00635	0.00476	0.00404	0.00368	0.00294
2015	0.01923	0.01138	0.00915	0.00913	0.00755	0.00724	0.00624	0.00482	0.00380	0.00357	0.00292
2016	0.01924	0.01129	0.00889	0.00895	0.00756	0.00731	0.00615	0.00473	0.00373	0.00359	0.00286
2017	0.01908	0.01104	0.00878	0.00878	0.00737	0.00715	0.00610	0.00466	0.00363	0.00358	0.00284
2018	0.01876	0.01081	0.00864	0.00860	0.00729	0.00704	0.00610	0.00463	0.00379	0.00356	0.00279
2020	0.01793	0.01017	0.00831	0.00812	0.00702	0.00673	0.00557	0.00451	0.00333	0.00344	0.00260
2025	0.01578	0.00873	0.00733	0.00681	0.00610	0.00588	0.00362	0.00397	0.00213	0.00295	0.00198
2030	0.01360	0.00752	0.00638	0.00554	0.00521	0.00506	0.00205	0.00346	0.00129	0.00247	0.00144
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To be in line with the Sustainable Development Scenario (SDS), the share of clean energy technologies such as heat pumps and solar thermal heating needs to triple to more than one-quarter of new heating equipment sales by 2030.

Alongside building envelope improvements, deployment of these low-carbon, high-efficiency heating technologies will help reduce average global heating energy intensity by around 3.5% annually in the next decade.

Heat pumps

Heat pumps still meet less than 3% of global heating needs in buildings.

Nearly 20 million households purchased heat pumps in 2018, up from 14 million in 2010, but most of this growth is from higher sales of reversible units that can also provide air conditioning, which reflects rising cooling demand. In Europe, heat pump sales increased by 20% in just two years, mainly air-source heat pumps.

In terms of policy progress, only three countries explicitly mention heat pumps for water heating in residential or commercial buildings in their Nationally Determined Contributions submitted as part of the Paris Agreement.

Read more about heat pumps

Renewable heat

Installed solar thermal heat capacity expanded by 250% in the last decade to exceed 470 gigawatts of thermal capacity (GWth), nearly as much as installed solar PV capacity (AEE INTEC, 2018).

Twenty-two countries, mostly in the Caribbean, the Middle East and Sub-Saharan Africa, included solar energy as part of their sustainable energy actions for heating and cooling buildings. Areas of application are also broadening to transform industry and district energy infrastructure.

Globally, however, solar thermal technology met only 2.1% of space and water heat demand in 2018. This falls short of the 10%-per-year increase needed by 2030 under the SDS to meet 8% of buildings sector heat demand (106 Mtoe).

Modern and efficient bioenergy for heat in buildings also remains off track, with little uptake of high-efficiency biomass boilers and stoves outside of Europe and North America, where policy support is available.

Read more about renewable heat

District energy

District heating systems continue to meet a large portion of heat demand, especially for space heating, in many parts of China, Europe and Russia. The number of new connections has increased by 3.5% per year since 2010, owing particularly to China’s extensive district heating network. Synergies with solar-power systems are also being explored.

Significant effort is still needed to reduce the carbon intensity of district heating, which has remained relatively constant globally in recent years. China’s reliance on coal for district heating is a key reason for this tendency, as it raises global emissions.

Greater policy attention to air pollution in China (e.g. through deployment of industrial excess heat recovery) promises improvements in the energy and carbon intensity of district heating.

Hydrogen

Hydrogen is virtually inexistent today as an energy vector in the global buildings sector, although there are many examples of its use (or eventual use).

In Japan, the number of ENE-FARM hydrogen fuel cell units deployed annually remains steady, with a cumulative 236 000 units installed at the end of March 2018.

In Europe, the ene.field demonstration, launched in 2012, has installed more than 1 000 small, stationary fuel cell systems for residential and commercial buildings in ten countries.

In France, the government is supporting a hydrogen-blending demonstration project at a local gas network in Dunkirk. The first injections, using a 6% hydrogen blend (by volume), were realised in June 2018, and further blends of up to 20% will be tested, depending on the price of renewable electricity.

Another project is the H21 demonstration in the United Kingdom, which will demonstrate the potential for direct hydrogen use to reduce the carbon intensity of heat demand using steam methane reformers with CCS.

In addition, the UK Hy4Heat project, which is also evaluating hydrogen potential for heating and covers all stages from appliance certification and quality standards to demonstration, is expected to launch in the second quarter of 2020.


Governments have a key role in setting long-term market signals to direct industry and investor decisions towards sustainable equipment for buildings.

Ambitious commitments related to end-use equipment efficiency (e.g. minimum energy performance standards [MEPS]), emissions (e.g. share of renewable energy in primary energy use for heat production for buildings) and flexibility (e.g. smart readiness labels, incentives for heat storage in water tanks and district energy networks) can take advantage of the synergies gained by using sustainable heating products to achieve multiple climate goals.

Traditional yet effective policy tools

At the very least, governments everywhere need to implement and update MEPS for heating equipment to steer markets towards clean energy technologies. These can be technology-neutral to encourage innovative products and competitive industry.

For instance, Canada aims for all space heating technologies to have an energy performance greater than 100% but has not specified which technology or fuel should be used to meet this goal.

Countries can also expand and improve labelling schemes for heating equipment (e.g. energy labels) to increase consumer awareness of energy technology choices.

Governments could also work together to improve monitoring, verification and enforcement of heating technologies, and collaborate with industry and trade associations to ensure proper equipment installation and maintenance.

Ambitious and innovative policy tools

Standards and labelling work best when they are part of a wider market transformation strategy.

For example, rebates and procurement policies can be employed at different points of the value chain to support energy efficiency deployment.

Regulators can also set performance standards or targets that are more stringent than the minimum lifecycle cost (which is common practice) and apply more ambitious requirements, including technology-forcing standards that could stimulate further innovation of clean energy solutions for heating.

To put heating in line with the Sustainable Development Scenario (SDS), policies should set ambitious targets, followed by rigorous performance standards to introduce a larger proportion of high-efficiency and low-carbon equipment into the market. This is especially imporant given the long lifespans of many heating technologies, with, for example, some gas boiler installations guaranteed for 25 years.

Policies, including innovative business models proposed by energy service companies, need to address the upfront costs of clean energy products.

National and regional accounting rules strongly influence the attractiveness of energy service delivery models, and allowing companies to record buildings sector assets off their balance sheets could significantly reduce their net debt.

Heating technologies


Renewable heating equipment and heat pumps need to represent 25% of new sales by 2030, but are off track to meet such a target.


Heat pumps

Nearly 18 million households purchased heat pumps in 2018, up from 14 million in 2010. However, most of this growth is due to higher sales of reversible units that may not be used for heating. Globally, heat pumps provide only 3% of heating in buildings. To be in line with the SDS, this share needs to triple by 2030, the upfront purchase price needs to come down, and average heat pump energy performance needs to increase by 50% towards current best available technologies.

Households purchasing heat pumps for heating and hot water production

Heat pump sales have increased unevenly since 2010 and need to triple by 2030.

	SDS	Other 	Eurasia	North America	OECD Pacific	China
2010		1.58	1.37	2.14	3.13	5.77
2011		1.65	1.67	2.24	3.19	7.18
2012		1.74	1.49	2.41	3.23	7.03
2013		1.95	1.45	2.51	3.42	7.64
2014		2.09	1.21	2.59	3.29	7.49
2015		2.09	1.16	2.57	3.18	6.92
2016		2.15	1.30	2.61	3.26	7.16
2017		2.20	1.41	2.73	3.47	8.10
2025	38.67					
2030	58.88					
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Read more about this technology

Innovation gaps


Shifting buildings towards high-efficiency and renewable heat technologies, a key priority to achieve the SDS and decarbonise the buildings sector, requires better system integration and flexibility.

Building integrated thermal storage can optimise the use of renewable heat, enhancing synergies among sectors and networks. Yet, thermal storage technology is far from reaching its full potential in terms of cost, sizing and other physical and operational constraints.

Additional resources


References


  1. AEE INTEC (AEE Institute for Sustainable Technologies) (2018), Solar Heat Worldwide, Global Market Development and Trends in 2017, , https://www.iea-shc.org/Data/Sites/1/publications/Solar-Heat-Worldwide-2018.pdf.
  2. Engie (2018), "Les partenaires du projet GRHYD inaugurent le premier démonstrateur Power-to-Gas en France", , https://www.engie.com/journalistes/communiques-de-presse/grhyd-premier-demonstrateur-power-to-gas-france/.
  3. Ge, T.S. et al. (2018), "Solar heating and cooling: Present and future development", Renewable Energy, Vol. 126(C), Elsevierpp. 1126-1140.
  4. Neyer, D. et al. (2018), "Technical and economic assessment of solar heating and cooling", Solar Energy, Vol. 172, .
  5. NGN (Northern Gas Networks) (2016), H21 Leeds City Gate Full Report, NGN, https://www.northerngasnetworks.co.uk/wp-content/uploads/2017/04/H21-Report-Interactive-PDF-July-2016.compressed.pdf.
  6. US EPA (US Environmental Protection Agency) (n.d.), "Renewable heating and cooling: Solar heating and cooling technologies", , https://www.epa.gov/rhc/solar-heating-and-cooling-technologies.

Acknowledgements


Ian Hamilton (UCL)