It was an inspiring two days at the Delta-EE European Heat Summit in London last week when close to 100 delegates from across the heating sector were brought together in an exciting programme spanning start-ups to energy giants and topics as diverse as hydrogen networks, smart electric heating controls and heat-as-a-service.
With this year’s Summit, it seems to us at Delta-EE that we have reached a tipping point in the decarbonisation debate. Decarbonising new build across Europe is looking increasingly positive, and though retrofit remains the largest challenge, the Summit demonstrated that there is a wealth of technologies, business models and proposition ideas that – targeted at the right sectors – promise to overcome some of this challenge.
Five market developments where we see a step change since last year:
- Digitalisation has firmly embedded itself across the heating value chain – all the way from lead generation and installer support, to enhancing product functionality and customer experience. It is enabling new business models and creating opportunities for the heating sector to synergise with and offer flexibility to the wider energy system.
- The opportunity is growing for heating and renovation solutions reaching beyond the stand-alone heating device. The market for end-to-end solutions that can decarbonise existing homes at scale is currently led by a small number of new entrants. While these pioneers have begun to build momentum, the engagement of incumbent energy suppliers and other larger organisations could lend impetus to these solutions and help tackle the challenges of decarbonising retrofit.
- Hybrids are still hot – is now the time for market growth? The market is still in its infancy in terms of number of installs, but both heating industry players and policy-makers are still interested for two key reasons – because (1) hybrids enable a balanced transition to a lower carbon heating sector, keeping an open door for both hydrogen and electrification, and (2) the potential for hybrids to provide energy system flexibility promises long-term value.
- Installers will be critical in the transition to new heat – but views are split on how fast installers might embrace a lower carbon, digital heating market, and who they will work with in the future. Some felt it was inevitable that installers will soon become part of larger organisations providing end-to-end services, while others believed manufacturer-affiliated installers will continue to have ownership of the customer relationship.
- Selling heat-as-a-service is the end-goal for many. A flexible approach to contract types shows greatest success to date in capturing different customer segments, though uncertainties remain around ideal contract length, who takes which risk, and who will be best placed to deliver these services in the long-term.
The audience opinion of where most innovation is needed to advance the decarbonisation of heat
Our subscription based Heat Services will be tracking the market developments in all of these areas, as the heating industry navigates the transition to ‘new heat’ – analysing the technologies, business models and propositions which will create opportunities and accelerate the decarbonisation of heat. For more information, contact [email protected].