What does the comparison with gas and oil show?
The recent decision of the European Union to announce the gradual end from 2025 for oil and natural gas burners, is already triggering developments.
Heat pump costs are falling, competition between manufacturers is intensifying, their sales are increasing and the new "Save" 2024 to be announced soon will include increased subsidies for this emerging technology.
The figures invested in heat pumps across Europe are staggering. In Germany, sales rose last year by 48%, in the UK by 20%, and estimates say that with the right incentives, the mere 20 million pumps installed in the EU today will reach 60 million by 2030.
In Greece alone, for the purchase of new less energy-intensive devices, such as heat pumps, it is estimated that close to 42 billion euros will be mobilized by 2030. A number that explains a lot about the acquisition of Kotsovolos by PPC, as well as the fact that until the end of decade, 17% of residential buildings in Greece are estimated to cover their thermal needs with heat pumps, a percentage that in 2050 is expected to have increased to 91%.
The energy environment brings changes in consumer habits and business priorities. Heat pumps are one of the big bets of the green transition.
And the European Union systematically pushes consumers there, since it leaves no room for the continuation of the life of oil and natural gas burners. The milestones of 2025, when government subsidies for burners end, and 2040, after which their sale and installation will be completely banned, have officially opened the door to heat pumps, a huge new market.
If the EU's goals are verified, we are talking about a sector that will attract investments of 400-500 billion euros in the coming years. Three million residential buildings in Greece and approximately over 100 million pan-European, are called upon in the coming decades to adapt to this great transition, which will give more and more jobs to the construction professions, to banks for financing, to specialized companies, generating growth and profits for a huge cycle of the economy.
Of course, the question that concerns Europeans is a common one. How much will it cost to electrify the residential sector in the buildings? What incentives will governments announce? Will they only affect the vulnerable or everyone? What burdens does the transition of buildings to the new era bring?
The disadvantage of heat pumps even today is their cost, which, as a new technology, far exceeds that of a natural gas or oil burner. Although there are also some cheaper solutions, nevertheless for a 100 square meter apartment, the cost usually cannot be lower than 6,000 euros and with the installation it easily reaches 7,000. It is an average price, as depending on the pump one chooses (brand, country of manufacture, etc.) the cost can easily reach 9,000 euros.
Let's look at a comparative example prepared by PPC, for a 100 sq.m. apartment. in Athens, with year of construction in the period 2000-2010 and where 3-4 people live. The cost of installing a pump. e.g. worth close to 8,000 euros is, with today's prices, approximately 77% higher than a natural gas or oil burner that costs 4,500 euros.
However, comparing the annual heating costs between the three most common solutions (pump, natural gas, oil), it follows that the one who chose a pump will pay around 1,000 euros per year. The one with a gas boiler will cost 1,330 euros and the one with an oil burner, just over 2,150 euros. The calculations have been made with weighted average fuel prices for 2023.
That is, the purchase cost of the pump may be more expensive, but its use is 54% cheaper than oil and 25% cheaper than natural gas. Because it is much more efficient it has a much lower annual energy consumption in kilowatt hours compared to the other two technologies. In this example, the annual consumption with the pump is 4,762 KWh compared to 13,432 KWh with natural gas and 15,950 KWh with oil.
The truth is that switching from burners to heat pumps will cost money. And the cost will be proportional to the number of Greek buildings that will change their boiler every year because it has completed its life cycle.
A burner has a life cycle of around 10-15 years, regardless of whether in Greece they operate even for 20-25. From now on, also due to the developments at the European level, when the life cycle of the boiler ends, the dilemma that the owner will face will be to buy a new one, which after a few years he will necessarily have to abolish or go through now to a heat pump. Since in any case there will be an expense, why shouldn't it concern a cleaning technology, the cost of which is expected to continue to fall significantly?
In essence, this is what the European Directive presented in December does. It gives consumers a clear road map, without sticking a knife to their throats, to choose the technology of the future, betting in the meantime on leaps and bounds in technology that will keep prices down.
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