A long term reduction in gas and oil prices has minimal impact on our forecasts for the European heating market to 2025, with a range of emerging technologies continuing to threaten the dominance of the traditional boiler across Europe as the share of oil and gas boilers declines.
This highlights that key players and energy suppliers need to continue to embrace higher efficient and lower carbon heating products, even in the light of the lower fuel prices we are currently experiencing.
This is because, policy will continue to force the uptake of lower carbon heating products, particularly in new build. Additionally, where we see reductions in ASHP uptake on gas, this is largely replaced by higher efficiency gas technologies such as micro-CHP and gas heat pumps so the lower carbon market share remains relatively stable.
- Gas and oil boiler only sales are still in decline - With a long term reduction in gas prices of 5% and oil prices of 20% (compared to 2015) – we still see gas and oil boiler sales decline (by 20% and 31% respectively).
- The overall lower carbon heating ‘share’ of the market is only 4% lower than our baseline fuel price scenario.
- ASHP remain a fast growing market – with annual sales increasing to over ~250,000 by 2025, although this is 17% lower than with our central fuel price scenario.
- “High efficiency gas” appliances are big winners – we see lower carbon gas technologies such as micro-CHP and gas heat pumps pick up a majority of the lost heat pump sales.
- So what does this mean for key players in the market?
Energy providers & network operators – gas demand will decrease but there is potential for increased electricity sales and business diversification.
Even with a long term reduction in gas prices of 5% (compared to 2015) we still see the gas boiler market shrink by 20% to 2025 across 5 key European markets. The implication for gas suppliers and network operators is clear - promoting high efficiency gas technologies like mCHP or ‘transitional’ technologies like hybrid ASHP will help protect their market share and maintain gas demand.
For electricity suppliers and network operators, it is important to plan for a potential boost in electricity demand from residential heating as more heat pumps come online. The rise of heat pumps also presents a new opportunity – electricity suppliers might choose to offer heat pump tariffs, or even play directly in the heat pump market to create ‘stickier’ customers and grow services revenue.
Heating manufacturers – there are opportunities for new low carbon entrants
The traditional boiler will be ‘under attack’ with sales of oil boilers and gas boilers in decline.
However there is a new ‘high efficiency gas’ opportunity up for grabs by both existing and new players. If the former can diversify its offering by adding the right products, at the right time, to their portfolio (including boiler ‘plus’ technologies or hybrids), savvy players can protect and even grow their share of the boiler market.
Want to find out more?
Delta-ee’s Roadmap Service forecasts how the residential heating market will develop out to 2025 across five of Europe’s major boiler markets – France, Germany, Italy, the Netherlands and the UK. For each market, we forecast the annual sales of a range of low carbon heating appliances, taking into account customer soft factors.
If you would like information on how to subscribe and prices for our Roadmap Service please contact Philippa Hardy.
*Delta-ee defines ‘low carbon’ as including the following technologies: Air source heat pump, ground source heat pump, hybrid heat pump (gas), gas heat pump, air to air heat pump, micro-CHP (fuel cell and stirling engine), biomass boiler, gas boiler plus (combined with solar thermal, solar PV or hot water heat pump), oil boiler plus and electric heating plus.