© IEA ETSAP - Technology Brief R02 – June 2012 - www.etsap.

org

Space Heating and Cooling

HIGHLIGHTS
 PROCESS AND TECHNOLOGY STATUS – Heating and cooling technologies have a major influence on global
energy consumption, and will continue to do so in the future. In temperate regions, space heating is the single largest
energy demand for households. In the commercial sector cooling demand has grown significantly, and with increasing
office space being rapidly constructed in developing countries it is projected to rise dramatically over the coming decade.
Residential cooling technologies are more important in the US and in warmer world regions. China is already the largest
market for residential air conditioners. The market for residential heating technologies is complicated, as different
cultural, climatic and physical requirements mean no single style of technology is used globally. In North America, forced
air furnaces are common whilst in parts of Europe combination boilers and district heating systems are particularly
popular. In terms of fuel input a general theme of heating technologies globally is a shift away from oil and coal towards
gas and electricity. This shift is driven by rising fossil fuel prices and legislation driving consumers towards less carbon-
intensive technologies. Low-carbon technologies such as heat pumps are becoming increasingly common in domestic
and commercial applications and this trend is expected to continue over the coming decade.

 PERFORMANCE AND COSTS – Fossil fuel fired heating systems remain the lowest initial capital cost, however,
low carbon alternatives are becoming increasingly competitive when viewed over a five to ten year time frame. Future
cost reductions and efficiency improvements in gas boilers and furnaces are not expected as the technology can be
regarded as mature. However, the efficiency of technologies currently installed has scope for improvement, particularly
utilising technologies such as condensing boilers, which are now mandatory in some countries. Heat pumps and air
conditioning systems could see efficiency and cost reduction improvements of at least 20% by 2030 according to the
IEA. This guide also highlights a range of developing technologies such as CO2 refrigerant heat pumps and micro-CHP
where there is scope for efficiency and cost reductions that may influence the market in the future.

 POTENTIAL AND BARRIERS – Fossil fuel fired heating systems are expected to remain dominant in the years to
come with an increasing proportion of low carbon heating systems which have great potential. CHP, biomass and heat
pumps are projected to be some of the key technologies of the future. Legislation is a key factor driving improvements in
technology and driving a market shift towards more efficient appliances. The Energy Star label is widely used and the
Eco-design requirements being introduced in the EU will become increasingly important in placing minimum performance
requirements upon heating and cooling products. A key barrier to the uptake of more efficient technologies is the
additional cost, which is being partially overcome through various financial incentives. Additional barriers include
consumer awareness, principal-agent barriers, information, transaction cost and regulatory barriers.
________________________________________________________________________________________________

PROCESS AND TECHNOLOGY STATUS by accepting an indoor temperature that is closer to the
outdoor temperature (as far as possible); second, to
In most countries, the building sector accounts for at
improve the building envelope (see ETSAP R01); and
least 40% of primary energy use in residential and
finally to increase the efficiency of heating and cooling
services sectors, and the absolute figure is increasing
products. It is this final approach that is the main focus
due to higher construction rates, particularly in China,
of this brief. The technologies covered are concerned
India and South Mediterranean countries [1]. The
with primary (main) space heating and cooling
residential buildings uses significantly more energy than
technologies. Secondary (localised) heating and cooling
commercial buildings (around 70% of total building
systems are not considered in detail as by definition
sector energy consumption) Currently, around 39% of
they account for a smaller proportion of demand.
CO2 emissions from the global residential sector are
due to space heating and cooling needs. In the service Over the full life cycle (from equipment manufacture to
sector’s this share is around 35% [2]. In order to keep disposal), the main environmental impact from heating
the average global temperature rise below the 2°C limit and cooling systems occurs during the operation phase,
agreed at the United Nations climate negotiations, which is directly related to energy consumption [12]. A
average building energy consumption per person will variety of energy sources are employed, including gas,
need to be cut by 60% by 2050 compared to levels in oil, electricity, biomass and other renewable sources.
2005 [3].
 Residential Sector - Residential energy
Building heating and cooling systems are used to consumption for space heating and cooling varies
maintain comfortable indoor temperatures through the depending on local climate conditions, season and user
generation and/or transfer of heat. There are three behaviour. Domestic energy use is dominated by space
main technical approaches to reducing the heating or heating in colder climates such as in (Northern and
cooling load of a building: first, to reduce the Central) Europe, where it accounts for 60-70% of
temperature difference between indoors and outdoors residential primary energy consumption (Figure 1).

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Cooling is important in warmer countries such as India

and the Middle East, as well as high-income countries Domestic Heating Cooling
such as the US where standards of living are higher [3].
The market for heating and/or cooling in developing 80%
countries is immature and demand is expected to grow 60%
significantly [9]. In rural China, energy consumption for
domestic space heating is much lower per unit area of 40%
floorspace compared to Europe or the US because
20%
many homes do not have heating equipment installed,
even if heating is required [20]. 0%
 Commercial Sector - Energy use for space heating US Europe Japan China India
and cooling in the commercial sector also depends on
regional factors (Figure 2). The scale of office space Figure 1 - Heating and cooling demand as a percentage
means it is by far the greatest overall energy user in of household energy use [3]
most countries [3]. In large commercial buildings,
significant savings are often hard to find using upgrades
to core heating equipment because a lot of heat is Commercial Heating Cooling
internally emitted through electrical appliances and
80%
occupation [5]. In smaller commercial buildings,
opportunities for improving the core heating equipment 60%
are similar to those in the residential sector [5].
40%
Various technologies are available and most overlap
the domestic and commercial sectors. Centralized 20%
systems generate heating/cooling at one point and 0%
transfer it to other areas via a distribution system, for
US Europe Japan China
example, using a central boiler and distributing heat
through radiators. Decentralized systems deliver
heat/cooling to the same area in which it is generated, Figure 2 - Heating and cooling demand as a percentage
without the need for a distribution system. Examples of of commercial energy use [3], [7]
decentralized systems include single split heat pumps,
and small solid fuel combustion installations such as be the dominant technology but now environmental
biomass room heaters. The focus of this brief is on the regulations no longer permit their use and new boilers
end-use technologies; however, in the case of run on gas or oil [20]. Another example of legislation
centralized systems they form only part of the influencing technology choice is in Denmark where oil
heating/cooling process and distribution systems are and gas fired boilers are being phased out for new build
also needed. As highlighted above in Figures 1 and 2, in 2013 and refurbishments of oil boilers in existing
heating and cooling requirements vary significantly with buildings from 2015 [22]. Alternatives to fossil fuel
climate, building architecture and cultural influences. All technologies are discussed below.
these factors result in a wide range of heating and  Forced-air furnaces heat the air directly and
cooling technologies that are often represented by distribute it through a system of air ducts. They are the
different dominant technologies depending upon the most commonly used residential heating system in the
region or country. The following sections highlight key US, accounting for two-thirds of households and
end use technologies and distribution systems. running most often on gas [5]. This type of air
 Central heating boilers (heaters) heat water that is distribution system lends itself to the incorporation of air
circulated through a system of radiators. This is the conditioning.
most common heating system used in Europe both for  Air conditioning systems using a halocarbon
domestic and commercial buildings [8] and in the US for refrigerant in a vapour-compression cycle and electricity
commercial buildings [5]. Boilers often provide both as the main energy input are often used for space
space heating and hot water for sanitary purposes. Cost cooling in both domestic and commercial properties. At
analysis should take into account this combined the global level, air conditioners were until recently used
production, which does not require a separate hot water only in large office buildings, hotels and high-income
systems (ETSAP R03). The vast majority of boilers in homes [7], mostly in developed countries. Air
Europe are gas-fired, but some use oil [16]. In addition conditioning systems are now becoming more common
to conventional gas- and oil-fired boilers, biomass also in developing countries. Most residential central
boilers and heat pumps can also provide combined air conditioners use a split system with an outdoor
space heating and hot water production. Higher condenser and compressor and an indoor evaporator
efficiencies for both furnaces and boilers can be coil [14]. China is by far the largest market for
achieved using condensing operation, where some of residential air conditioners with sales of over 25 million
the water vapour in the exhaust is condensed using a units in 2008-2009, while the next largest market is
separate heat exchanger. Condensing systems are Japan at around 7 million units [25]. Chillers are
more popular in cold climates where they offer very typically used in larger commercial properties; in the
significant fuel savings. In China, coal boilers used to US, they represent about 20% of cooling equipment in

Please send comments to Oliver.Edberg@aeat.co.uk, Andrew.Waddelove@aeat.co.uk, Gena.Gibson@aeat.co.uk, (Authors), and to

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 © IEA ETSAP - Technology Brief R02 – June 2012 - www.etsap.org

terms of floorspace [5]. They remove heat from a liquid mature and versatile technology. Their use has been
through a vapour-compression or absorption increasing over the past years since the improvement of
refrigeration cycle. This cooled liquid flows through thermal efficiency of buildings (see ESTAP R01) has
pipes in a building. reduced heating demand and facilitated the use of low-
temperature heating technologies such as heat pumps.
 Renewable energy-based heating and cooling
In some cases gas may also be used either for
technologies offer low-carbon solutions for buildings
supplying heat to drive absorption heat pumps, or
and in many cases can also provide financial savings in
powering a gas engine to drive heat pumps (similar to
the long term. Most of the technologies that can deliver
electric heat pumps). The market for heat pumps in
savings are commercially available today. Current
Europe was approximately 200 000 units in 2010 [12].
uptake of renewable energy heating/cooling is relatively
Air Source Heat Pumps (ASHPs) are by far the most
low, but is increasing rapidly and projected to make a
common type of heat pump worldwide. They use the
significant contribution by 2020. For example, many
temperature difference between indoor and outdoor air.
European Member States (particularly Belgium,
They are typically used in moderate climates [14].
Denmark, Hungary, Ireland, Italy, the Netherlands and
There are two main forms of ASHP, air-to-air and air-
the United Kingdom) have very high ambitions for
to–water, both of which can be reversible. Air-to-air
renewable heating/cooling. The EU’s Renewable
systems tend to be installed more often in warmer
Energy Directive sets a 20% renewable energy
climates and commercial offices where the primary
consumption target for the EU in 2020. Many EU
energy demand is cooling. Air-to-water systems can
countries are setting renewable heat targets as part of
provide sanitary hot water and to date have
the overall strategy for energy consumption. For
predominantly been used in domestic applications. Air-
example the UK has set itself a 12% renewable heat
to-water systems have good potential in the retrofit
target by 2020, from a baseline of 1.5% in 2011 [21].
market as they can be integrated to existing central
The key renewable technologies that can be used for
heating systems. Geothermal heat pumps (Ground
heating and cooling are biomass boilers, solar
Source Heat Pumps) use the relatively constant
thermal systems and heat pumps. In the UK non-
temperature of the earth instead of outside air as the
domestic sector biomass heating is likely to be the
heat source, and transfer the heat from the earth into
dominant renewable technology of choice.
buildings, typically through a ground loop system.
Biomass boilers are well established in both the Trench (horizontal) systems are cheaper to install and
domestic and non-domestic markets and popular in generally used in rural houses due to the space
countries such as Germany, Sweden, Austria and requirement, whereas borehole (vertical) systems are
Poland [13]. There are many types of fuel with the main more common in urban and sub-urban environments as
sources being wood chips and pellets from forest well as for industrial and commercial applications. The
residues. The European Biomass Association report in loop may be sealed, in which case the heat transfer
their 2011 statistical review, that there are over 70,000 fluid is contained in a closed piping system. In summer,
wood chip and pellet boilers in the EU [23]. An many non-domestic systems run in reverse, using the
important advantage of biomass boilers over other earth as a heat sink. An open system uses heat transfer
renewables is that they can provide constant high fluid that is part of a larger environment, e.g. ground
temperatures similar to fossil fuel boilers. This is water. Water-to-air heat pumps provide space heating
particularly useful in commercial/industrial situations using a heat exchange coil. Water-to-water systems
where process heat is a requirement. In rural areas of use refrigerant-to-water heat exchangers. Direct
developing countries heating from direct burning of geoexchange (DGX) models are less common. They
biomass is common, mainly for cooking and hot water use refrigerant circulated in pipes buried in the ground
production. or submerged in water that exchange heat directly with
the ground rather than a secondary heat transfer fluid.
Active solar thermal systems collect radiation from
the sun to provide space heating, as well as cooling  Electric heating is a mature technology that is
with thermally driven chillers. However, solar thermal is popular where low electricity prices prevail, for example
not typically used for space heating in temperate in Canada or locations that have no connection to gas
climates as maximum solar insolation coincides with the networks or district heating. Electric heating is likely to
minimum in space heating requirement. The see its market share eroded by heat pumps over the
predominant application for solar thermal is hot water coming years as the latter offers a more efficient use of
heating - this is discussed in detail in the ETSAP R03 energy. Both technologies are being considered in
brief. Solar thermal driven cooling is an application that conjunction with smart grids particularly by countries
has great future potential as solar insolation coincides increasing their intermittent renewable electricity
with peak cooling demand. The IEA Solar Heating and generation. The use of electric heating via resistant
Cooling Programme has recently commenced the Task heaters or heat pumps offers a solution to utilise excess
48 ‘Quality assurance and support measures for Solar renewable generation from technologies such as wind
Cooling’ (October 2011-March 2015) with the aim of power - particularly at night.
commercialising solar cooling [24].
 District heating systems (ETSAP E16) are
Heat pumps (see ETSAP E19) are used in both increasingly favoured by local government in high
domestic and commercial situations to transfer heat density areas where buildings have similar loads but
from a cold medium to a warmer medium, or reversed limited scope for the application of building integrated
to provide cooling. Electric heat pumps are a relatively renewables. The technology is very common in

Please send comments to Oliver.Edberg@aeat.co.uk, Andrew.Waddelove@aeat.co.uk, Gena.Gibson@aeat.co.uk, (Authors), and to

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 © IEA ETSAP - Technology Brief R02 – June 2012 - www.etsap.org

Sweden, Denmark, Finland, the Baltic States and PERFORMANCE AND COSTS
several Eastern European states, where it accounts for
As mentioned, a range of issues influence the energy
around 50% of the heat demand of buildings [13]. A
demand for space heating and cooling, including local
variety of energy sources are used including fossil fuels
climate, the building fabric and cultural perceptions of
(e.g. in Poland) as well as renewable energy sources
acceptable indoor comfort conditions. For instance,
(biomass is important in Nordic countries) [13]. In
space heating consumption in Japan is relatively low
contrast, the penetration rate is very low in other
because people tend to heat one room instead of the
countries such as the UK and the Netherlands [13]. In
whole house [3]. Urban living, high incomes and
China, district heating (often powered by coal) is the
greater access to technologies are associated with
dominant source of space heating in cold regions, as
higher energy use for space heating [3].
the provision of district heat is mandatory in these areas
[20]. Cogeneration, i.e. combined heat and power Different systems employ different media to receive the
(CHP) production (see ETSAP E04) is often used to heating or cooling. Water-heating systems are capable
reduce primary energy consumption and CO2 emissions of achieving higher energy efficiencies than air-heating
in district heating networks. Commercial CHP systems systems because of the lower energy required to
using reciprocating engines, micro-turbines or on-site distribute a given amount of heat, lower distribution
fuel cells have long term potential but savings are highly losses and lack of infiltration of outside air [7]. The
dependent on the ability to use waste heat from the efficiency of a boiler or furnace system can be
power source for other building needs [5]. While large expressed as the Annual Fuel Utilization Efficiency
CHP systems are a well-developed technology, the (AFUE) rating in North America which is the same
market for micro-CHP is immature. Japan is currently metric as Seasonal Efficiency, used in Europe. These
the leading marketplace, although global sales in 2009 metrics may be more relevant to actual installed
represented just 38 MWe of capacity [9]. performance than rated efficiency as they considers
aspects such as standby losses and represent the
 Distribution systems - End-use technologies used
efficiency of heat generation that ultimately goes to
for central heating/cooling differ both in terms of the
heating the house. However, these metrics vary
media used for heat transfer (water, air etc) and the
significantly by region and season, therefore the figures
distribution system (ducts, pipes etc). Boilers, micro-
provided in this brief refer to indicative seasonal
CHP and district heating can usually operate at
efficiencies. Typical conventional North American air-
relatively high temperatures and are well-suited to high
forced furnaces achieve AFUE ratings of around 78%
temperature (55 to 80ºC) delivery systems such as
with a cost around €120/kW for gas-fired models and
radiators [17]. Domestic properties generally use water
€145/kW for oil-fired models [17]. Condensing models
circulation in radiators, whereas commercial properties 1
can earn an Energy Star rating if they achieve AFUE of
may use steam. Forced-air systems heat air in a
over 90% for gas furnaces and over 85% for oil
central source and distribute it through the building via
furnaces [15]. These more efficient models are slightly
air ducts. Low temperature (35 to 55ºC) radiant
more expensive, costing around €130/kW for gas
delivery systems, such as radiant underfloor heating
versions and €165/kW for oil versions [17]. Market
and low temperature radiators, tend to have large
penetration of these high-efficiency furnaces is growing;
surface areas, operate over long hours and result in
in 2009, 50% of residential gas furnaces and 24% of oil
more gradual temperature changes in the heated space
furnaces in North America were Energy Star certified,
[17]. Heat pumps achieve much higher seasonal
[15]. In Europe, where many residences use central
performance factors if they are installed with low
heating boilers, AFUE values are around 75% for a
temperature heat delivery systems especially 35-45 ºC.
typical standard model [17]. Gas boilers cost around
Heated water can also be circulated through radiant
€115/kW and oil versions cost around €125/kW [17].
underfloor heating to take full advantage of the high
Energy Star-rated boilers have AFUE of 85% for non-
efficiency of condensing boilers. This provides high
condensing models and 95% for condensing types
levels of thermal comfort due to the constant vertical
[15]. Efficient domestic gas boilers with AFUE of 90%
room temperature profile. Low temperature systems will
cost around €125/kW and efficient domestic oil boilers
only be effective in thermally efficient properties (see
with AFUE of 86% cost around €135/kW [17]. For
ETSAP R01); therefore thermally efficient buildings are
larger buildings (typical size of 40 dwellings or more),
particularly suitable for heat pumps.
the cost per kW reduces significantly [17]. Modern
Heating, Ventilation and Air Conditioning (HVAC) biomass boilers have efficiencies of 75% or higher
systems provide temperature control by circulating a [17] with new models of comparable efficiencies to oil
certain amount of air at a sufficient temperature. They and gas condensing boilers. The main barrier facing
are often used in larger commercial buildings, biomass boilers is the higher upfront cost at €596/kW
particularly where high-rise buildings are not provided versus €125/kW for a new gas boiler. Cost reductions in
with operable windows for ventilation. These are domestic biomass boilers in particular are expected due
common in the US [5]. More recently, these systems to economies of scale and installer familiarity. The
have also been used in energy-efficient housing, which lifetimes of different types of heating and cooling
often have airtight construction designs and thus need equipment are relatively comparable between 15-20
additional ventilation. Modern systems include heat
exchangers to recover energy and improve efficiency. 1
The Energy Star rating is an international standard for
energy efficient products used in the US, Australia, Canada,
Japan, New Zealand, Taiwan and Europe.

Please send comments to Oliver.Edberg@aeat.co.uk, Andrew.Waddelove@aeat.co.uk, Gena.Gibson@aeat.co.uk, (Authors), and to

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 © IEA ETSAP - Technology Brief R02 – June 2012 - www.etsap.org

years. At the commercial scale the typical lifetime is improve. Gas engine heat pump technology is already
typically 5 years longer at 20-25 years, this is based used for heating and cooling worldwide, and currently
upon maintenance procedures which are usually more has an efficiency (PER) of around 1.5 (under this
thorough at larger scales. example 1kWh of gas would provide 1.5 kWh of heat)
[17]. The technology is predominantly geared towards
It is important to note that the terminology used to
commercial applications; their use in the residential
describe the efficiency of heat pumps is different to that
sector is usually limited to multi-unit dwellings. Liquid-
used for boilers and furnaces. Heat pumps are
based absorption heat units have also recently
examined in terms of their coefficient of performance
entered the market [17]. Solid-based adsorption
(COP), which is the ratio of heat output to electricity or
systems, which use the exhaust from a gas condensing
gas input for a specified source and output temperature.
boiler to drive the pump, are currently under
So a heat pump using 1kWh of electricity to provide
development, and expected to be introduced within 2
3kWth would have a COP of 3.0.
years. Efficiencies of at least 1.2 (PER) could be
The Energy Efficiency Ratio (EER) is the ratio of cold achieved in these units [17].
output to electricity or gas input for a specified source
Air-source heat pumps (ASHPs) are widespread in
and output temperature. The EER for air conditioners
warm climates as they can be operated in reverse to
is measured in terms of cooling power divided by fan
provide cooling, whereas ground-source heat pumps
and compressor power. The range is typically 3.2 – 3.5,
(GSHPs) are more suitable for colder countries and
depending on operating conditions [7]. Typical costs for
typically offer greater efficiency. Air-source heat pumps
domestic air conditioners are around €440/kW [17].
have lower installed cost at €1,275/kW compared to
Energy Star-rated commercial HVAC systems
€1,625/kW for ground source heat pumps because
represent 37% of the US market for central air
there is no need to install a ground loop [17]. The costs
conditioners and heat pumps in 2009 [15].
of ground loops themselves vary significantly with
For both COP and EER it is becoming common practice geology; typically horizontal trench based systems cost
to refer to the efficiency over a heating season so almost half of an equivalent size borehole. There also is
Seasonal COP (SCOP) or Seasonal EER (SEER). a wide range in product performance; Energy Star-rated
Energy Star-rated models are about 14% more efficient geothermal heat pumps are at least 45% more efficient
than standard models [14]. Chillers have an EER of up than standard models. The wide range in product
to 7.9 under full load operation and even higher under performance and site specific factors means that
part loading [7]. variation in installed heat pump costs for domestic
properties can be large demonstrated by the range in
The heat pump market is continuing to show innovative installed costs published by the IEA [25]. Indeed this
technology developments that will influence not only the report illustrates the much higher installed costs in
types of products but also continued improvements to Europe are compared to other regions such as North
the costs and performance. The projected America where the installed costs for ASHPs range
improvements are expected to result in cost reductions from €385-530/kW and GSHPs from €405-690/kW.
of 20-30% and efficiency improvements of 30-50% by Energy-star rated geothermal heat pumps reached 59%
2030 [25]. Variants of existing products are being of the US heat pump market in 2009 [15]. Heat pumps
introduced to the market. The use of natural can also be categorised depending on how the
refrigerants, particularly CO2 refrigerant, is such an extracted heat is used. In the United States and Japan
example; this technology - whilst more expensive - both of which have mature heat pump markets air is the
offers the ability to heat to higher temperatures, thus most common heat distribution medium [28]. Air-to-air
enabling efficient sanitary hot water production and heat pumps pass air directly into the room or distributed
offering a new market in domestic retrofit or commercial through a forced-air duct system. Air-to-water (hydronic)
sector in particular. The efficiency of gas fired heat systems are used to heat water to around 40°C to 45°C
pumps is referred to as the Primary Energy Ratio [18]. Air-to-air heat pumps usually have a higher
(PER), the energy supplied is then the higher heating performance because the temperature of the heat sink
value (HHV) of the fuel supplied. The aforementioned is lower (30-50°C) than hydronic systems (45-55°C)
COP for electrically driven heat pumps can also be [28], but typical efficiencies are expected to be in the
reported in PER by multiplying the COP with the power range of 3.2-3.5 (heating) and 2.6-2.6 (cooling) for both
station efficiency. Unless power generation has a low types [17].
carbon intensity, comparing the PER of electric and gas
driven heat pumps can result in a similar overall Hybrid heat pumps combine a heat pump with a
2
efficiency . As electricity grids decarbonise in the future, second heating system to match specific heat loads
the PER of electric driven heat pumps will continue to which can lead to an overall improvement in
performance. Since the efficiency of air source heat
2 pumps drops when the outside air temperature is low, it
Applying the PER approach to electrically driven heat pumps.
As an example, with gas fired electricity generation of 40% and can be more efficient to use a boiler during these
a heat pump performing at a COP of 3.0 then to consider this periods. Combining ground source heat pumps with
on a primary energy basis it would be: primary energy input secondary heating source can reduce the size of the
(natural gas)*electricity generation efficiency*heat pump ground loop required, reducing installation costs, and
efficiency=PER allowing the heat pump to run more efficiently as it is
For example: 1*0.4 (power station efficiency)*3 (heap pump
COP) = PER of 1.2 not overworked in peak season [17]. However, there is
currently some debate amongst installers in some

Please send comments to Oliver.Edberg@aeat.co.uk, Andrew.Waddelove@aeat.co.uk, Gena.Gibson@aeat.co.uk, (Authors), and to

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 © IEA ETSAP - Technology Brief R02 – June 2012 - www.etsap.org

countries such as the UK over the approach to sizing Commercial scale heat pump systems are on the other
heat pumps. New guidance recently released by a UK hand more cost effective typically in the region of €500-
Government scheme recommends sizing heat pumps €700/kW depending upon whether the heating medium
for domestic dwellings to be the only heat source, as is air or water. Uptake of more sustainable heating and
opposed to designing systems to be used with a cooling systems is being driven by legislation, financial
secondary source [27]. incentives and increased consumer awareness. Despite
these barriers significant effort is being made to
The amount of thermal energy provided by active solar
address these issues which are discussed below.
thermal systems is typically between 300 and 900
2-
kWh/m year [9]. Installed cost ranges from 1,100 to The energy saving potential that is realised in practice
2,140 US$/kW for new build and 1,300 to 2,200 may be significantly lower in part due to the slow stock
US$/kW for retrofit [9]. As mentioned previously these turnover. In developed countries, many properties built
devices typically provide sanitary hot water, and the use before energy efficiency regulations were introduced
of a backup system is typically needed in temperate will still be in use in 2050; for example, 50% of
countries. There is potential for increased use of solar European housing stock was built before 1975 [3]. This
thermal to feed into part of the heat load of a district slow building stock turnover therefore requires an
heat network. Recent examples of such an approach integrated approach to improving building thermal
are available in Denmark and Germany where large efficiency to enable a market shift in heating appliances.
commercial scale solar thermal plants have been
Cooling demands in modern buildings (particularly
installed.
commercial building) have grown due to the need to
CHP is a mature technology and developments in gas offset higher internal heat gains from computers,
engines, gas turbines and steam turbines are still servers and other appliances. There has also been a
expected to deliver small, incremental improvements in rapid rise in the demand for air conditioning in
efficiency [17]. Micro-CHP for domestic properties can developing countries as their economic growth requires
range in size from 0.8kWe for a small dwelling to 5kWe new offices and their higher incomes can meet demand
for large multi-family dwellings [17]. Some units are for greater thermal comfort. For example, offices are
noisy or require mounting on a concrete pad, which can expected to increase energy consumption for cooling in
limit suitable installation sites in dwellings. A major China by 12% per annum [3]. Efficiency improvements
barrier preventing the uptake of Micro CHP is the high are expected to help reduce the overall demand
installed costs which range from €5,300/kW upwards, increase with the IEA projecting a 20-40% cooling
with fuel cell-based units currently significantly more efficiency improvement by 2030 [25]. One aspect that
expensive [17]. CHP district heating systems can is likely to facilitate improvements is that the majority of
range from small gas engines (from 200kW upward) air conditioning/heat pump expertise is located in
supplying multi-dwelling buildings to large steam South-East Asia, predominantly Japan and South
turbines or combined cycle gas turbine (CCGT) plant Korea.
supplying a district heating network [17]. Integrating a
Uptake of more efficient heating and cooling plants and
carbon capture and storage (CCS) unit into district CHP
devices is increasingly required by legislation and
plants could contribute to decarbonisation goals while
building codes. For example, solar thermal obligations
reducing energy penalty and operating cost of CCS
form part of the building codes in Italy, Portugal and
[17]. For a large (500 MWe) gas-based CHP district
Spain [13]. In Europe the Renewable Directive
heating scheme, the installation of a CCS system would
(2009/28/EC) includes renewable heating/cooling in the
lead to an energy penalty of about 10% and increase
overall target and in the National Renewable Energy
capital cost by around €570/kWe, which add an extra
Action Plans. The Directive also requires building
€6/MWh to non-fuel operating costs [17].
regulations to specify a minimum level of energy from
renewable sources in new and refurbished buildings
POTENTIAL AND BARRIERS [13]. Legislation will also be important in influencing
technology choices, for example Denmark is prohibiting
 Potential - Conventional boilers and furnaces are the installation of oil boilers in new buildings from 2013
likely to remain an important technology for several and retrofitting new oil boilers from 2017.
years to come [17]. Many countries have recently
progressed from standard models to more efficient The new Eco-design requirements being introduced in
condensing versions [4]. the EU will introduce minimum performance criteria that
are progressively increased through to 2020. The
Low-carbon, zero-carbon and energy-efficient heating associated new eco-labelling requirements also offer
and cooling technologies for buildings could reduce CO2 consumers better information on the energy
emissions by up to 2Gt and save 710 million tonnes oil performance of products that has previously not been
equivalent (Mtoe) of energy by 2050 if deployed globally transparent due to different reporting methodologies. As
[9]. According to the International Energy Agency, the an illustration of the Eco-design requirements forcing
key technologies to achieve this aim are active solar the market, it is proposed to set the minimum fuel boiler
thermal, CHP and heat pumps [9]. efficiency (<70kW) at 86% [26]. Eco-design
Heat pumps have a relatively high capital cost and this, requirements are currently in draft for space heating
together with requirements for space to install them boilers and heat pumps.
may limit their uptake [17]. This also applies to varying
degrees to solar thermal and biomass technologies.

Please send comments to Oliver.Edberg@aeat.co.uk, Andrew.Waddelove@aeat.co.uk, Gena.Gibson@aeat.co.uk, (Authors), and to

Giorgio.Simbolotti@enea.it and Giancarlo Tosato (gct@etsap.org), Project Coordinators
 © IEA ETSAP - Technology Brief R02 – June 2012 - www.etsap.org

 Financial incentives – Financial incentives such as Principal-agent barriers occur when the benefits of
investment subsidies, low interest loans and tax energy efficiency do not accrue to the person who
reductions have been widely applied to stimulate the incurs the cost. This is common in commercial and
market uptake of renewable installations, which often domestic lease properties, where the landlord chooses
have relatively high capital costs and long pay back the equipment but the tenant typically pays the utility
periods. In the UK, a novel financial instrument has bill. A split incentive also exists if owners do not expect
been adopted – the Renewable Heat Incentive pays a to hold a property over the full payback period of a
fixed sum for each unit (kWh) of heat generated by technology, as this is usually realised through energy
various installations on a technology-specific basis. In savings over several years. No single policy instrument
the German Market Incentive Program, soft loans and is capable of overcoming principal-agent barriers in all
investment subsidies are available for biomass contexts. Mitigation can be achieved through use of
plants[13]. The financial incentives aim to help achieve policy instruments such as providing transparent
renewable energy targets but also more importantly information about energy performance (e.g. through
drive down costs and increase technology familiarity green building certification programmes), addressing
through economies of scale. An example of economies contract design and setting minimum standards for the
of scale can be taken from the solar photovoltaic sector energy efficiency of equipment.
where dramatic cost reductions over the last five years
Information barriers arise when the consumer lacks
have seen governments reduce fiscal incentives
sufficient information to optimize their energy
accordingly.
consumption. This is a major problem in developing
 Consumer Awareness - A number of consumer countries, but consumers in developed countries tend to
information programmes have been set up to increase be well-informed [3]. In addition, there is relatively little
consumer awareness. The Energy Star label is used understanding of “as-constructed” performance of
both in the US and in Europe In addition there has newer technologies [4].
been a rapid growth in green building certification, and
Transaction cost barriers include the costs of
forecasts predict that a cumulative 53 billion net square
gathering information, time and costs for installation of
feet of floorspace will be certified by 2020 [10]. The
new equipment. The fragmented nature of the building
aforementioned eco-design directive will introduce
industry means it can be difficult to identify appropriate
energy labelling in a consistent format applied to other
contractors [3].
products such as white goods throughout the EU. The
use of labelling will improve customer understanding of Finally, regulatory barriers exist in developing
performance. countries such as China and Brazil, because of the lack
of regulation or enforcement [3].
 Barriers – The energy efficiency improvement
potential is not fully realised because of principal-agent
market barriers, information and transaction costs [1].
________________________________________________________________________________________________

Please send comments to Oliver.Edberg@aeat.co.uk, Andrew.Waddelove@aeat.co.uk, Gena.Gibson@aeat.co.uk, (Authors), and to

Giorgio.Simbolotti@enea.it and Giancarlo Tosato (gct@etsap.org), Project Coordinators
 © IEA ETSAP - Technology Brief R02 – June 2012 - www.etsap.org

CO2 Emissions Reductions from Heating and Cooling Technologies- IEA BLUE Map and Alternative Scenario

Global Installed Capacity of Efficient and Low/zero Carbon Heating Technologies (GWth) - IEA BLUE Map Scenario

Notes: The IEA BLUE Map scenario assumes that heating and cooling technologies reduce building related emissions by
2 Gt by 2050. This is based on an acceleration in the rate of low carbon and energy efficient technology uptake worldwide.
The Blue map scenarios assume significant improvements in efficiency and cost reductions including low-cost thermal
storage and deployment of solar thermal. Further details of the scenarios is provided in the IEA report [25].

Figure 3 - Projections for Global low-carbon Heating and Cooling [25] (incl. a proportion of hot water heating).

Please send comments to Oliver.Edberg@aeat.co.uk, Andrew.Waddelove@aeat.co.uk, Gena.Gibson@aeat.co.uk, (Authors), and to

Giorgio.Simbolotti@enea.it and Giancarlo Tosato (gct@etsap.org), Project Coordinators
 © IEA ETSAP - Technology Brief R02 – June 2012 - www.etsap.org

Table 1 – Summary Table: Key Figures for Heating and Cooling Technologies [14], [17]

Technology Class Technology Name Capacity Capital FixO&M Lifetime Heating Cold Electric
Cost Cost Efficiency Effic. Effic.
kW €/kW €/kW-y yrs HHV, HHV HHV

Existing Gas Boilers 20 115 5 15 0.75 - -

New Gas Boilers 20 125 5 15 0.90 - -
Existing Oil Boilers 20 125 5 15 0.75 - -
Dwelling scale Boilers New Oil Boilers 20 135 5 15 0.86 - -
Current Biom.Boilers 20 596 13 15 0.70 - -
New Biomass Boilers 20 596 13 15 0.85 - -
Existing Coal Boilers 20 115 5 15 0.75 - -
Existing gas furnaces 20 120 5 18 0.78 - -
Furnaces (dwelling New gas condensing 20 130 5 18 >0.90 - -
scale) Existing oil furnaces 20 145 5 17 0.78 - -
New oil condensing 20 165 5 17 >0.85 - -
Existing Gas Boilers 120 70 2 25 0.75 - -
New Condensing Gas Boilers 120 80 2 25 0.90 - -
Building-scale Boilers Existing Oil Boilers 120 75 2 25 0.75 - -
(typical 40 dwellings /
New Oil Boilers 120 90 2 25 0.86 - -
building for moderate
climate) Existing Biom Boilers 120 375 10 25 0.70 - -
New Biomass Boilers 120 375 10 25 0.85 - -
Existing Coal Boilers 120 100 2 25 0.75 - -
Existing Heat Pumps 12 1,500 15 15 2.50 2.50 -
3
New Ground-to-Water H. Pumps 12 1,625 15 15 3.3-3.6 2,3-2,6 -
Heat Pumps
domestic scale New Air-to-Water Heat Pumps 12 1,275 15 15 3.2-3.5 2,3-2,5 -
New Air-to-Air Heat Pumps 12 600 15 15 3.2-3.5 2,3-2,5 -
Gas Absorption Heat Pumps 12 700 15 15 1.25-1.35 0.63 -
Heat Pumps New Air to air 300 535 2-3 20 3.2-3.5 2.3-2.5 -
comm./industrial scale New Air to Water 300 670 4 20 3.2 2.3-2.5 -
500kWe Gas engines 500 1,000 32 15 1.3* - 0.38
5MWe Gas engines 5,000 900 30 20 1.3* - 0.44
5MWe Steam Turbine (biom.) 5,000 4,500 100 25 3.5* - 0.16
Large Scale CHP
60 MWe CCGT 60,000 800 20 20 1.0* - 0.45
60MWe Steam Turbine (biom.) 60,000 4,200 100 25 3.5* - 0.21
500MWe CCGT 500,000 700 18 20 0.5* - 0.52
Stirling Eng..Micro-CHP 1 6,300 10 15 0.77 - 0.13
Micro-CHP
ICE-based Micro-CHP 1 5,300 10 15 0.63 - 0.23
Mini-CHP ICE-based Mini-CHP 5 2,382 5 15 0.60 - 0.25
Gas 50MW CHP CCS 50,000 1,237 33 25 0.5* - 0.39
CCS-enabled CHP
Gas 500MW CHP CCS 500,000 1,270 33 25 0.5* - 0.47
Boiler-Solar Hybrid 20 275 10 15 1.00 - -
Hybrid Technologies
Heat Pump - Boiler Hybrid 12 or 20 1,402 15 20 - - -
Existing air conditioner 12 440 15 14 - 3.2-3.5 -
Air conditioners
New air conditioner 12 440 15 14 - 3.2-3.5 -
High temperature radiators 20 120 20 - - -
Radiators
Low temperature radiators 12 250 20 - - -
* heat to power ratio
Notes: costs given in 2010 Euros. Prices in US$ have been converted to Euros using an exchange rate of 0.755. HHV = higher heating
value. Heat pumps: district heating network costs not included; Stirling engine-based Micro CHP based on Whispergen Mark 4; Ice-
based Micro CHP based on Honda ECOWILL; PEMFC-based Micro CHP based on Japanese PEMs; SOFC-based Micro-CHP based
on Japanese SOFCs; Mini-CHP based on Baxi-Dachs system (80% overall efficiency). Additional cost due to CCS is EUR570/kW.
High temperature radiators based on assumption of EUR2,400 to fit a 100m2 house. Low temperature radiators based on EUR3,000 to
fit a 100m2 house. Capital costs include installation costs. Figures are based on European climate – performance in other climates may
vary. Fixed O&M costs cover maintenance such as a boiler check or F-gas check for heat pumps.

3
Ground and air source heat pumps to a wet heating system include the cost of low temperature radiators as part of the installation.

Please send comments to Oliver.Edberg@aeat.co.uk, Andrew.Waddelove@aeat.co.uk, Gena.Gibson@aeat.co.uk, (Authors), and to

Giorgio.Simbolotti@enea.it and Giancarlo Tosato (gct@etsap.org), Project Coordinators
 © IEA ETSAP - Technology Brief R02 – June 2012 - www.etsap.org

References and Further Information

1. WEC. 2010. Instruments and Financial Mechanisms of Energy Efficiency Measures in Building Sector. World Energy Council.
http://www.worldenergy.org/documents/ee_case_study__financing.pdf
2. IEA, 2010. Energy Technology Perspectives. International Energy Agency.
3. WBCSD, 2011. Energy Efficiency in Buildings: Transforming the Market. World Buisiness Council for Sustainable Development.
4. Prindle, Bill. 2007. Quantifying the Effects of Market Failures in the End-Use of Energy. Paris, France: International Energy
Agency. http://www.iea.org/textbase/nppdf/free/2007/mind_the_gap.pdf
5. IEA. 2007. Energy Efficiency in the North American Existing Building Stock. International Energy Agency.
http://www.iea.org/Papers/2007/NAM_Building_Stock.pdf
6. Zero Carbon Hub. 2010. Carbon Compliance for Tomorrow’s New Homes.
http://www.zerocarbonhub.org/resourcefiles/TOPIC4_PINK_5August.pdf
7. IPCC. 2007. Residential and commercial buildings. In Climate Change 2007: Mitigation. Contribution of Working Group III to the
Fourth Assessment Report of the Intergovernmental Panel on Climate Change http://www.ipcc.ch/pdf/assessment-
report/ar4/wg3/ar4-wg3-chapter6.pdf
8. Greenbiz, 2011. Spending on building energy efficiency to boom in next five years. Published November 29, 2011.
http://www.greenbiz.com/blog/2011/11/29/spending-building-energy-efficiency-boom-next-5-years
9. IEA, 2011. Buildings roadmap. International Energy Agency. http://www.iea.org/papers/2011/buildings_foldout.pdf
10. Pike Research, 2010. Green Building Certification Programmes. http://www.pikeresearch.com/research/green-building-
certification-programs
11. JRC, 2005. Heat pumps: Technology and environmental impact. Joint Research Commission.
12. JRC, 2010. Development of EU Ecolablel and GPP Criteria for Heating and Cooling Systems. Joint Research Council.
http://susproc.jrc.ec.europa.eu/heating/docs/1%20IPTS%20Scope%20Draft%201%20-%20Heating&Cooling%20Systems.pdf
13. Fraunhofer ISI, 2011. Report on European harmonised policy to promote RES-H/C. Intelligent Energy Europe. http://www.res-h-
policy.eu/downloads/RES-H%20Policy%20D17%20report-final.pdf
14. Energy Star. Guide to Energy-Efficient Heating and Cooling.
http://www.energystar.gov/ia/partners/publications/pubdocs/HeatingCoolingGuide%20FINAL_9-4-09.pdf?c1c8-4d4b
15. Energy Star, 2009. Market penetration data. http://www.energystar.gov/ia/partners/downloads/2009_USD_Summary.pdf
16. VHK, 2007. Eco-design of boilers. European Commission http://www.ecoboiler.org/public/ecoboiler_task2_final.pdf
17. AEA, 2012. Decarbonising Europe’s residential sector. The European Gas Advocacy Forum.
18. BRISA. Air-source heat pumps. https://www.bsria.co.uk/bookshop/books/heat-pumps-a-guidance-document-for-designers/
19. EHPA, 2005. Heat pumps: Technology and environmental impact. European Heat Pump Association.
20. Holm et al. 2008. Space heating needs in Asia. United Nations University. http://www.os.is/gogn/unu-gtp-sc/UNU-GTP-SC-06-
45.pdf
21. DECC, 2011. The Renewable Heat Incentive.
http://www.decc.gov.uk/assets/decc/What%20we%20do/UK%20energy%20supply/Energy%20mix/Renewable%20energy/policy/re
newableheat/1387-renewable-heat-incentive.pdf
22. The Danish Government, 2011. ‘Our Future Energy’.
http://www.ens.dk/Documents/Netboghandel%20-%20publikationer/2011/our_future_energy_%20web.pdf
23. AEBIOM (2011) 2011 Annual Statistical Report on the contribution of Biomass to the Energy System in the EU27.
24. IEA Task 48 Quality Assurance and Support Measures for Solar Cooling http://www.iea-shc.org/task48/
25. IEA (2011) Technology Roadmap, Energy-efficienct Buildings: Heating and Cooling Equipment
http://www.iea.org/papers/2011/buildings_roadmap.pdf
26. Eco design directive (2012): http://www.eceee.org/Eco_design/products/boilers/WD_Ecodesign_Space_and_Combi_Heater-2-2-
12.pdf
27. Microgeneration Installation Standard: MIS 3005
http://www.microgenerationcertification.org/admin/documents/MIS%203005%20Issue%203.1a%20Heat%20Pump%20Systems%2
02012%2002%2020.pdf
28. IEA Heat Pump Centre http://www.heatpumpcentre.org/en/aboutheatpumps/heatpumpsinresidential/Sidor/default.aspx

10

Please send comments to Oliver.Edberg@aeat.co.uk, Andrew.Waddelove@aeat.co.uk, Gena.Gibson@aeat.co.uk, (Authors), and to

Giorgio.Simbolotti@enea.it and Giancarlo Tosato (gct@etsap.org), Project Coordinators