LITTLETON, Colo., Nov 30 (Reuters) - Households across Europe are scrambling to get hold of the latest must-have gadget this holiday season: heat pumps.
While not as eye-catching as giant flat screen TVs or as sleek as the latest smartphone, heat pumps have surged in popularity this year as soaring power bills triggered an urgent search for more affordable heating options across the continent.
The main attraction of heat pumps - which use electric-powered mechanical energy rather than fossil fuels to heat and cool buildings - is their ability to convert one unit of electricity into 2.5 to 5.5 units of heat, according to the International Renewable Energy Agency (IRENA).
That equates to a 250% to 550% efficiency range, compared with 80% to 85% efficiency for older fossil fuel boilers, IRENA noted in a report on heat pumps released this week.
With European power bills set to jump multiple times their normal levels this winter after Russia's invasion of Ukraine sent natural gas prices soaring, homeowners, businesses and governments alike are all urgently looking for ways to cut costs, emissions and reliance on imported energy.
STOMPING GROUND
Europe was already the world's top market for heat pumps before this year's power crisis supercharged demand for them, with annual sales there topping 1 million units since 2015.
In 2021, thanks in part to stimulus packages tied to COVID-19 recovery efforts, heat pump sales jumped by 34% in Europe to a record 2.18 million units, concentrated mainly in France, Italy, Sweden, Germany and Spain, according to data from the European Heat Pump Association (EHPA).
In 2022, sales have surged even further, with installations in Europe's largest economy, Germany, jumping by 25% in the first half from the same period in 2021, according to figures from the Federal Association of German Heating Industry.
In Finland, heat pump sales jumped by 80% in the first half to 75,000 units, Finnish Heat Pump Association data showed, while homeowners in The Netherlands face waiting lists for the devices due surging demand and shortages of parts.
HEATING UP
The relentless demand for heat pumps looks set to grow further in the years ahead thanks for a slew of national and regional policy measures designed to accelerate Europe's energy system transition away from fossil fuels and improve residential heating efficiency levels.
In Germany, Europe's largest natural gas consumer and second most populous country after Russia, authorities aim to install 500,000 new heat pumps a year from 2024 onwards.
In the Netherlands, which relies on gas for roughly 70% of residential heating, hybrid heat pumps will become mandatory in all homes from 2026.
Farther afield and over the longer term, other countries across Europe are also expected to embrace heat pumps aggressively, with this year's European Commission's REPowerEU plan targeting around 20 million heat pumps to be installed in the European Union by 2026 and nearly 60 million by 2030, according to the EHPA.
GAS CUTS
The cumulative impact of such a widespread pivot by millions of households to electric-powered heat pumps will be most evident in Europe's demand for natural gas.
While the transition away from fossil fuels to cleaner energy sources will take years, the simultaneous switch-out already underway of gas-fired boilers for electricity-powered heat pumps may mean that Europe's total gas consumption has already peaked, and trends steadily lower going forward.
Europe is the fourth-largest gas-consuming region, and accounted for 13.6% of global natural gas consumption in 2021, according to Enerdata. Europe is also the most integrated major market, connected by pipelines from Eastern Europe, North Africa and the Middle East.
Over the coming years, steadily diminishing consumption by such a critical and well-connected market will lead to gas supply build ups in other regions, and supply diversions to less well-connected markets.
In the near term, fast-growing consumers in Asia and elsewhere will be able to absorb additional gas volumes and potentially offset the lower use in Europe.
But over the longer turn consumers in those regions will also be drawn to power-saving devices like heat pumps, especially in areas that lack extensive pipeline connections that help lower the cost of gas supplies to end users.
So while Europe may be the hot spot for heat pumps today, it is likely that their appeal to households and businesses may go global in due course, and make an even bigger dent in worldwide fossil fuel use.
(Reporting by Gavin Maguire; Editing by Lisa Shumaker)
