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Cate’s main research & consultancy focus areas at Delta-ee include the Connected Home Research Service and UK / European microgeneration market analysis.Before joining Delta-ee, Cate worked at the Energy Saving Trust, where she spent 6 years working in domestic energy efficiency and microgeneration, and renewable energy more widely, across the UK and in Scotland. 

Cate brings extensive knowledge of domestic energy use and householder behaviour and is experienced in database management, data analysis, report writing and market analysis. She holds a BSc (Hons) in Zoology from the University of St. Andrews.

Is electrically driven heat the way forward for the Republic of Ireland?

The Republic of Ireland is one of many EU countries with increasing focus on the electrification of heat to reduce carbon emissions in downstream energy use. Already, 40% of residential new build developments have a heat pump installed. This is set to increase at the end of 2019 with the introduction of Nearly Zero Energy Buildings, effectively removing condensing gas boilers as an option in new build.

Electrification brings with it challenges for the operation of the electricity grid – pressure from variable loads and high peak loading from electric heating and transport combined with increasing inclusion of peaky renewable generation. So, is the Republic of Ireland firmly on the path to electrification of heat? What can be learned from their approach?

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Do gas boilers still have a role to play in Dutch new build homes?

Many in the heating industry are looking with interest at the developing situation in the Netherlands, where a series of earthquakes in the north of the country caused by over-extraction from the Groningen gas field have led to a groundswell of cross-sector support for the idea of reducing – or even entirely removing – the use of Dutch natural gas.

There are a number of policies and supporting mechanisms in place to encourage the move away from natural gas as a fuel for heating homes. The latest has been a well-publicised change to the Dutch Law regulating the gas network operators (‘The Gas Law’).

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Have you installed your last gas boiler?

The heating market is changing. New, lower carbon systems are emerging, and disruption is occurring in the traditional value chains. The industry is at an exciting – and challenging – point in its evolution, with many different pathways it could take into the future.

Through our Delta-ee Gas Heating Service, we are helping companies understand what this future could look like. On Thursday July 13th, we will be holding our public webinar: “Beyond the boiler: how is the future for gas-based heating emerging today?” click here to register.

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Balancing the electricity grid: what role for micro-CHP?

Many European countries are making good progress towards decarbonising their electricity supply through increasing the proportion of electricity coming from renewable sources. But managing the intermittency of generation from some these sources such as PV and wind presents a challenge to Transmission System Operators (TSOs), who are responsible for ensuring the stable and secure operation of the electricity transmission network.

The costs involved in maintaining a stable supply are significant: the UK’s TSO, National Grid, for example, spends around £1bn per year (around a quarter of its total income) procuring ‘balancing’ or ‘ancillary’ services. These services are needed to balance the electricity grid, ensuring enough electricity is available (and at the right times) to meet demand and to maintain the right frequency of electricity.

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The power of up-close and personal

Low carbon heating techs are demonstrated ‘live’ to home-owners – and micro-CHP proves very popular.

As part of Delta-ee’s Microgen Insight Service, 36 intrepid UK home-owners came to the Baxi UK test lab in Warwick in July this year. They had been prepared for the evening by reading a description of five low carbon or renewable heating technologies, prepared by Delta-ee. During the evening they were shown examples of these products running in a test facility, and had the chance to ask questions.

At the start of the sessions, the participants were asked about their attitudes towards the technologies, and whether they could see themselves installing one (or any of them) in their home. At this initial stage, air source heat pumps (ASHP) were generally the preferred technology.

But following live demonstration of each of the products, during which time people also had the chance to ask questions from the expert demonstrator, this picture had changed dramatically. Micro-CHP’s popularity had soared by the end of the demos, based on the design they were shown.

So what made micro-CHP so appealing?

Among the top reasons given were:

  • It doesn’t take up much space: people could see it fitting into their homes, in the place of the current boiler.
  • It can be fitted without making significant changes to the home. Customers said they were less interested in having a heat pump (ground source or air source) once they were told there was a chance they might have to upgrade their radiators.
  • They liked the idea of being paid to generate electricity via the Feed-in Tariff. The rising popularity of solar PV over in the UK, thanks to the Feed-in Tariff, has probably helped here, in warming people up to the idea that they can be paid for generating electricity. However, since these focus groups, the Government has announced a consultation on the FiT (announced on Friday 28th August) – which might make this less of a selling point in the future.

 So what 3 things can the micro-CHP industry learn from this?

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Mind the Gap: Why are micro-CHP sales lagging in Europe?

Customer willingness-to-pay research shows a distinct gap between potential and actual sales – even at today’s prices. There are many reasons for this – and an equal number of solutions to the problems.

In my last blog I talked about whether micro-CHP is price elastic: i.e. would we expect sales of domestic micro-CHP units to change depending on what price a retailer sets? You can read about that here. (A quick spoiler alert for you: the answer is ‘yes’. But you’ll need to read the post to see by how much…).

However, besides showing how much potential there is for micro-CHP sales to rise if end-user costs are made more competitive (which is significant), perhaps the most interesting finding from our research was that current installation rates– based on the numbers of units we know are sold at today’s prices – is far lower than would be expected.

Delta-ee publishes annual global sales data on micro-CHP units as part of our Micro-CHP Research Service. Comparing the latest numbers of sales in Germany, the Netherlands and the UK with the response to our new willingness to pay research clearly shows that – even at today’s high prices – there is potential in all markets for sales to be higher.

For example: German customers indicated that at current prices of Stirling engine systems, take-up could be up above 20%. In terms of the suitable homes, this should translate into a market of around 30,000 units a year. But we know that the real-life market has only reached around 10% of this potential. Why?

So why is take-up of micro-CHP dragging?

This is definitely an interesting question, and one we’ve explored further in other research from the Micro-CHP Service. Customer over-statement of the likelihood to purchase is not sufficient on its own to explain the large gulf between potential and actual uptake that we can see. To start closing this gap we advise suppliers to look at addressing the following 3 key issues:

1. A lack of product availability (and a lack of knowledge among customers). Is there just not enough choice (yet) for customers who are thinking about buying a microCHP unit? Without a good product range, customers may not be finding the right product for them and/or their home.  If more products were launched into the market, would sales naturally start to climb?  Potentially - Germany offers the most choice to homeowners with 4 Stirling engine, 1 fuel cell and many internal combustion engine products currently available, while UK and the Netherlands have only 1 or 2 to choose from. Sales figures for Germany outrank these other two countries by a factor of 10:1.

2. Industry requires more market creation efforts by suppliers. Are manufacturers pushing their microCHP units hard enough compared to their other low carbon products? Are utilities engaged and committed enough to micro-CHP? Is enough being done to engage and educate the installers, who play a key part in promoting microgeneration technologies to customers? ‘No’ is the simple answer to all the above (for more of our thoughts about this, see here).

3. Ineffective market channels.  Micro-CHP has not fared well so far by being sold through existing gas boiler routes to market. As a much more expensive product than a conventional boiler – while also being a less mature and a more sensitive technology – it has struggled to make an impact at the point of sale. More is now being done by the industry to find innovative and effective channel strategies. Which is just as well, as these interventions will help micro-CHP to meet its (sizeable) market potential.

So, what can the industry do to drive micro-CHP sales upwards? The points above are clearly within retailers’ own powers to influence. However point 2 will rely on the industry working together as a whole and this may prove the biggest challenge if micro-CHP is to “mind the gap” and truly fulfil the potential that our analysis has revealed. 

All comments welcome, or please get in touch directly:

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