Interview: Thomas Nowak, Secretary General of the EHPA

Interview: Thomas Nowak, Secretary General of the EHPA

EHPA Thomas Nowak

Interview: Thomas Nowak, Secretary General of the EHPA

Thomas Nowak - EHPAWe recently interviewed Kilian Pender, the CEO of the Green Deal Finance Company, about his vision for renewables and hopes for the future of UK green energy. For this next interview we wanted to get a European perspective on renewables, and who better to speak to than Thomas Nowak, Secretary General of the European Heat Pump Association.

Thomas is a huge advocate of renewables, and personally owns a heat pump and PV power plant within his own building. He is a big-hitter in the world of renewables, and from the EHPA’s base in Brussels, Thomas represents the industry at European institutions and networks with stakeholders and influencers in the renewable sphere on behalf of the association.

Thomas is an active proponent of renewable technology, and in addition to his daily management of the EHPA and its future development, he has published various articles and contributed to a number of scientific publications.

I asked Thomas questions about political turmoil, technological advancements, EHPA initiatives, and which snippets of advice he would give to those who wish to make a mark on the green industry.

 

What are your thoughts about whether recent political turmoil has affected the drive for shifting to renewable energy?

I am an optimist. For renewable energy deployment in general, the momentum is high and market penetration is quickly increasing. Cost reduction in particular in the area of renewable electricity from wind and solar will influence the heating sector, too.

On an EU policy level, the ambition level is good, even though it could be higher, in particular across Member States. For the use of renewable energy in heating and cooling, the connection of the electric and thermal sectors will certainly help. Once it becomes clear, that the combination of decentral electricity production and its immediate use via efficient technologies like heat pumps creates and economic advantage, a market driven development will accelerate the speed of growth. With regards to the currently discussed “clean energy for all”-package the revision of the renewable energy directive focuses specifically on heating and cooling and proposes a dedicated growth factor to be achieved by Member States. This will be beneficial towards the energy transition.

In the international context the fast reduction of cost, the increasing availability of storage in combination with more sensors and computing power will have a similar effect: using renewable energy and investing in renewable energy systems creates and economic advantage. Investors are already realising this and will continue to do so. In conclusion I see market forces taking over and making the personal opinion of certain policy makers far less important and thus less dangerous to the development.

 

In your opinion, what have been the most notable advancements in heat pump technology over the past 5 years?

We observe three strong market trends: air has become the dominant energy source for heat pumps – either as air/air, air/water and increasingly often as exhaust air heat pumps. A second trend is a strong growth of dedicated hot water heat pumps that can be operated side by side with existing boilers and thus open the market for heat pump technology and allow both installers and end-users to gain experience and trust with the reliability of this technology.

The last major trend is the development and installation of heat pumps for industrial and commercial applications. Wherever heating and cooling is required at the same time, efficiencies of 7-10 are possible (meaning 1 unit of electricity results in 7-10 units of heating and cooling provided).

 

From a technology perspective, we see several development that have helped increase the applicability of heat pump technology.

In residential applications, inverter driven compressors are by now the standard. From an environmental perspective, the F-Gas phase down is working with increased offerings for components and solutions using low GWP refrigerants. More generally, we observe the fast digitalisation of the sector. Most if not all heat pump solutions can by now be connected to the “smart-grid” and are enabled for remote monitoring and control. Integration of heat pumps into home energy management systems and connecting them to PV inverters and batteries enables a higher share of grid independence.

This development opens up the market for new business models including demand-response flexibility and remote monitoring services. Pending the current update of the electricity market design, this may eventually lead to new offerings like performance guarantees and/or “heat as a service”.

 

Which European governments fully recognise (and act on) the true potential for heat pumps as an impactful renewable energy solution?

All European governments have agreed to the first renewable energy directive. In 2009 they acknowledged heat pumps as a technology using renewable energy. While some governments may not have taken this to be more than lip service, this has changed tremendously. We see recognition for the benefits of heat pumps as integrator technology nearly everywhere. Demand response flexibility is required to balance the electric grid and heat pumps can help. The same goes for the recognition of cooling and an increased focus on the use of excess (waste) heat that will improve the efficiency of energy use.

Last, clean air is moving into the focus of attention and avoiding local combustion by replacing boilers with heat pumps can improve the quality of the environment in cities.

When it comes to more pronounced recognition, the German and French governments give strong support schemes in place. The UK has been a strong supporter, but has recently scaled down official support. The Dutch government has recently become very supportive: It has announced the complete phase out fossil boilers from the residential building stock and has introduced a shift in taxation away from electricity towards fossil energy. Heat pumps will benefit from both measures. One should stress, that announcing future measures often has a much bigger impact that their actual execution.

Without starting a detailed list with all national action we recognise a general positive perception of the benefits of heat pumps by most governments in Europe and beyond.

This is reflected in the market place. Heat pump sales have grown in all 21 countries covered in our statistics which surmounts to an EU-wide growth of 12,2% in 2016 after a 13% growth in 2015. This growth is expected to continue and even to accelerate in 2017.

 

Do you agree that financial incentives are essential in helping homeowners and businesses to switch to heat pump technology?

It maybe surprising to hear, but in fact we disagree. Heat pumps are cost competitive in new builds, where ambitious requirements to building efficiency and sometimes even a share of renewable energy exist. Introducing such requirements also for renovation and augmenting it with standardised financing (NOT subsidy)-solutions would help the deployment of this technology significantly. Introducing financial incentives can be quite quite disturbing. Mainly as often long term availability of the subsidy is not guaranteed and the fact that it can be removed affects the trust of end-consumers in the market.

Instead, we suggest a more market driven approach that is also in line with the CO2 reduction targets that we jointly follow: governments should remove all energy related subsidies including in particular those for the use of fossil energy and introduced a price signal on the use of fossil energy. While this could in principle be achieved by enlarging the ETS to the heating and cooling sector, a more promising and easier to establish measure is the introduction of a carbon (base) price. Doing so would honour the triple benefit of heat pumps to climate and energy targets (==> the use of renewable energy, reduction of energy demand and of CO2 emission (with 100% renewable heating possible already today))

 

In your opinion, what are the biggest challenges preventing the widespread use of heat pumps in Europe and USA?

There is no universally applicable answer for all EU countries since local conditions vary. But if I could sent a wish list, my top three to accelerate heat pump deployment would be these:

1. The price mechanism needs fixing. Both thermal and electricity markets are highly regulated. If we want a technology neutral approach in which the markets should guide the decisions of end-users, than the prices must tell the truth not only in terms of production cost, but also in terms of environmental damage and in particular CO2 emissions. Currently, many governments finance the energy transition via distribution its cost to electricity, leaving fossil energy untouched. The cost of the transition must distributed via all energy carriers instead. As well, electricity is subject to a much higher burden from taxes and levies, that makes its use unnecessarily unattractive.

2. Ambitious requirements on the energy performance of buildings: From 2021 onwards, near zero energy standards will make all new builds feasible for heat pumps applications. The same level of ambition needs to be applied to the building stock. With approx. 80% of todays buildings expected to still be standing in 2050 and a reluctance of owners to allow renovation, we have to address that issue. Possible solutions here are: simple financing solutions for building owners that want to renovate and that must include a “zero CO2 emission” criterion for 2050. A simple like-for-like replacement should not be encouraged anymore. Ecodesign can serve as a tool – new heating systems should exceed a 100% primary energy efficiency requirement (min A+ energy label in the current scale), thus providing significant and immediate energy savings.

3. Give demand side flexibility a value via the introduction of variable pricing for electricity. Heat pump system can serve as thermal batteries that help balance and stabilise the electric grid and encourage decentral production and use of energy. Providing this service to the grid can not only be taken for granted, but must be remunerated. The current proposal for the electric market framework will address this issue.

More general: we are operating in a European single market and consequently member states should apply the same requirements for the performance of heat pumps, based on EU standards, ideally simply referring to Ecodesign. In particular when it comes to subsidies, additional requirements are created, often in a quite artificial manner. Their existing variety serves as real market barriers. While manufacturers can bring their products to market, actually selling them is difficult, if they can not benefit from subsidies. Having to meet different national requirements also limits the benefits of economies of scale that could otherwise help reduce cost of heat pump installations.

 

Could you outline the clear goals for EHPA over the coming decade?

The European Heat Pump Association will continue to push for the wide acceptance of heat pumps as a key technology for a zero CO2 emission society. This will have to include a focus on the integrative potential of the technology across industries. Heat pumps can overcome spatial, temporal and temperature level differences between energy supply and demand. They can also greatly reduce the waste of energy in buildings and industrial processes.

Highlighting the technologies’ potential in connecting heating and cooling as well as supply and demand is an target that we must achieve. Showing that heat pumps and other solutions like district heating, solar thermal and biomass integrate well and can be scaled is of similar importance.

 

Are there any upcoming EHPA initiatives / projects that you’d like to draw particular attention to?

You may have heard about our decarbheat initiative. At the COP21, 193 nations have agreed to limit global warming to far below 2°C. This requires zero, if not negative carbon emissions from all sectors of society. Heating and cooling is responsible for 51% of Europe’s final energy demand! A decarbonised Europe without a decarbonised heating sector is impossible.”. In the the DecarbHeat initiative we have grouped (by now) 25 manufacturers that support an ambitious DecarbHeat Industry Pledge. They are supported by nearly 50 companies, associations and individuals that support the goal of a 100% C=2 emission free heating and cooling sector by 2050.

Apart from that, EHPA has also pushed for establishing the CEN HP KEYMARK to support the current introduction of Ecodsign and the Energylable for boilers into the market. It is based on Ecodesign requirements and augments them by an independent certification of type performance. All details can be found at heatpumpkeymark.com.

 

Could recommend some leading thinkers and speakers on renewable energy that readers will benefit from following?

Personally I found the work by Prof. David MacKay very enlightening. In particular his book “Sustainable energy – without the hot air” is well worth your time reading it. There are many more inspiring people in the field and that makes me confident that the momentum in moving towards an energy efficient, largely carbon free society based on renewable energy is strong enough to achieve the necessary change. I would rather not mention any further names in order not to forget important individuals.

 

Finally, as someone with great experience in the industry, what advice would you give to a young person taking their first steps in the clean energy sphere?

1. Train yourself in systems thinking. We have to decarbonised heating/cooling, electricity and transport and they will become increasingly interdependent.

2. Try to understand the fundamentals. In the whole discussion, never forget: you can not cheat physics.

3. Make up your own mind and be assured you made the right choice. Heat pumps are a great technology. Adding digital to them and connecting to the electric sector will put them in overdrive. Combining energy and data is a really powerful combination with great disruptive potential

A huge thanks to Thomas for speaking to us. You can follow him on Twitter, and check out the EHPA website for more information.