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Is the French market ready to switch to new gas technologies?

It’s a tough question to answer, but there is definitely a push toward more efficient gas technology in France, suggesting the country is ready for a switch. In our latest research as part of the Gas Heating Service, we covered this interesting market to find out about the evolving role of gas heating appliances in France.

The French market currently has an important share of gas heating (more than 40% of the dwelling stock) but it has not been a straight path. With the nuclear power programme for example, 70% of new homes built in the ‘70s received electric heating. Nowadays, gas heating represents more than 50% of new build. It’s clear gas has an important role and, from our latest research, we are certain of its future in the French market.

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Promising policies and revised regulation: the European heat pump market is warming up

It’s been a busy month for the Electrification of Heat Service. We have recently published our latest heat pump country reports focusing on France, Italy and Germany and have already had the chance to discuss some of the findings  at our recent European Heat Summit.

The results of our recent research and the forecasts we’ve made suggest a tentatively positive outlook for the European heat pump market. We have seen growth in some segments of the heat pump market in these three countries, as displayed in the graph below. The arrows show the expected direction of growth over the next few years.

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Connected home – for geeks or the mass market?

 There are many angles to explore this question. But it’s hard to beat talking to customers. For our clients – energy suppliers, the heating and controls industry, and others seeking to enter the ‘energy’ part of the connected home – it’s critical to understand the answer this question so they can judge the appropriate level of investment and engagement in this emerging area. While sales volumes are growing quickly today, it’s from a small base so while the growth rates are impressive, the absolute numbers are modest for mass market businesses. So, we decided to explore customer attitudes to a variety of connected home ‘energy’ products and services across a number of European markets.

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Germany beats France in yet another category: Connected Home. Here are the reasons why

In our previous connected home blog, we explained why we think smart thermostats will lead the connected home energy market in the UK and the Netherlands.

Where the UK and Dutch heating markets are almost exclusively boiler markets, Germany and France aren’t, although boilers still make up a large share of the heating market. They have a large penetration of direct electric heating, of communal heating systems and they also have a significant heat pump market.

In France, most connected home providers quite understandably decided to first focus their efforts on one type of heating system. For example Qivivo, Netatmo and Nest focussed on the gas boiler market in France. The two first are now moving towards heat pump and electric heating. Schneider Electric developed an electric heating ready solution only.
In Germany though, some of the most successful companies are focusing their efforts on the heating emitters and not directly on the heating system. For example EQ-3 and Danfoss have a connected radiator TRV system to control the heating room by room. Tado remains the only smart thermostat provider – which controls the boiler – showing early signs of success.

If the potential of these markets is similarly strong, the dynamics surrounding the energy supply industry in each country are very different.
  • In Germany, many utilities are under a lot of pressure from challenges in the wholesale market, and some are trying hard to grow new revenue streams through services (and churn rates are also rising). RWE saw an opportunity to achieve part of this through the smart home and was one of the early movers in this market, pushing its smart home solutions hard - which partly explains the quicker growth of Germany compared to France today. Others like EnBW and Vattenfall decided to join the Qivicon platform – led by Deutsche Telekom – who offers a connectivity gateway where partner devices can connect to – but these utilities haven’t yet spent lots of effort on promoting these connected home products.
  • The French energy suppliers are close to monopoly suppliers (GDF Suez with gas and EDF with electricity) and therefore customer switching rates are very low – removing one strong driver for them to develop connected home services. Consequently the energy suppliers have taken moderate steps and are not yet really driving the market.

So what are the key drivers for growth in these 2 countries?

Both countries:

  • We believe telcos may play a bigger role in France and Germany than in other countries. Orange and mostly Deutsche Telekom have already made their first move into the energy side of connected home and it may not be long before they start to achieve an interesting scale, as they look to grow new revenue streams outside of their core business.
  • Germany’s heating control market has always been considered as one of the most advanced one in Europe – boiler controls are pretty advanced compared to other countries. Attention therefore shifts to connected TRVs which we expect to have a strong penetration over the next few years, led by EQ-3 – who is working with both RWE and Deutsche Telekom – and the more traditional manufacturers such as Danfoss, who has a strong market share of heating controls in Germany.
  • New build regulations (RT 2012) have been the centre of the attention and can be interpreted as forcing each of the 300,000 annual new property to be installed with smart heating controls. This didn’t happen yet though due to the lack of clarity and the fact that most buildings built in 2014 were under the previous regulation. However there will be more and more new builds that will have to follow the RT 2012, therefore installing one of the solutions offered by the likes of Schneider, Delta Dore, Hager, Legrand and others.
As we are diving into Sweden and Denmark, we are seeing very different stories – but not less fascinating – from all the markets looked at so far. These will be the next countries published under the Delta-ee‘s Connected Home Market Outlook Report, so contact me for more information on the reports, or subscribe to our connected home blog to make sure you don’t miss it out.
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Low carbon heating market in Europe to see a four-fold growth in annual sales by 2025

In my previous blogs & webinars, I discussed the outlook for low carbon heating appliances in five of Europe’s largest heating markets – Germany, France, Italy, the Netherlands and the UK – comparing and contrasting the opportunities in these markets.

Summing up the analysis from our Roadmap Service across all five countries, ‘gas boiler only’ sales fall by more than 800,000 units per year in the next decade. That’s equivalent to the entire Italian gas boiler market disappearing, or a 22% fall in market size across these five countries.

In the same time frame, the low carbon heating market across these countries will grow four-fold to just over 1.5 million units per year (almost the same size as the UK heating appliance market!).

Below are two interesting charts I’ve generated from analysis across all five markets:

Low carbon technology sales forecasts per country

France – narrowly – offers the best prospects for low carbon appliance sales by 2025. It has by some way the biggest new build market in Europe (~300,000 new dwellings per year) and strict building regulations (RT 2012) forcing a shift towards low carbon.

Breaking down the growth in low carbon technology sales, by technology

Annual sales of low carbon appliances will grow by ~1.1 million units per year by 2025 – with more than ten technologies fighting for a slice of the pie.

Across the five markets, ‘gas boiler plus’ solutions (this is a boiler in combination with solar thermal, solar PV or a hot water heat pump) captures the biggest share of this opportunity – just less than one quarter of the growth in the low carbon market. But there are three other key technologies hot on its heels, each grabbing a 15 – 20% slice of the growth in sales.

So, lots of change on the horizon and varying levels of engagement with low carbon among the appliance manufacturers. Some are being more cautious than others, but it’s too early to call which approach will win. A few examples of what we are seeing today are:
  1. Viessmann already offers air source and ground source heat pumps & is planning on introducing a fuel cell offering in Germany in 2015. It also announced recently plans to open the ‘largest technical centre of its kind’ in 2017 for developing new technologies.
  2. Vaillant has added air source, ground source and hybrid heat pump offerings to its portfolio in recent years.
  3. Daikin launched a hybrid heat pump offering in Europe in 2014.
What’s next?

In an upcoming webinar in December 2014, we’ll explore in more depth the opportunity for low carbon sales in Germany, France, Italy, the Netherlands and the UK, highlighting which markets are most attractive and which technologies offer the best hopes for growing new sales.

To register an interest in this webinar, please email

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The future of the French and Dutch heating markets: How will they evolve?

In May 2014, more than fifty specialists from Europe’s leading utilities and heating industry companies joined a Delta-ee webinar to discuss the future of the French and Dutch heating markets. To access the webinar recording and slide set follow this link.

During the webinar, we explored two key questions using the Pathways Tool and Roadmap Service (Netherlands & France editions):

1.       How are residential properties heated in the Netherlands and France today?

2.       How will the heating markets in both countries change to 2025?

This was the second in a series of webinars exploring how the residential heating markets across different European countries will evolve to 2025.[1]  

Q1. How are residential properties heated in the Netherlands and France today?

The Netherlands and France are two major European markets for heating appliance sales – but are incredibly different in terms of the mix of annual appliance sales in each market, the mix of fuels used to heat homes and in the scale of their new build housing markets. 


In the Netherlands, more than 95% of residential dwellings are connected to gas with low cost gas boilers dominating annual boiler sales.  Competing with cheap gas boilers is a huge challenge for lower carbon technologies, meaning lower carbon appliances only account for 3% of annual appliance sales today.  Air source heat pumps, ground source heat pumps, biomass boilers and solar thermal are competing closely for these sales today – each achieving sales of a few thousand units per year.

In France, the story is very different – homes are more likely to be heated by electricity or oil than they are by gas.  This higher share of “off-gas” homes (where heating bills are usually high) presents a good opportunity for lower carbon technologies to deliver fuel bills savings and deliver a more attractive proposition for customer.  As a result, 10% of annual appliance sales today are lower carbon, with air source heat pumps dominating these sales.

Another key difference between both markets which influences uptake of lower carbon technologies is the size of their new build markets.  In France, the new build market is near 300,000 dwellings per year.  Coupled with tough building regulations – requiring a share of the hot water demand to be met by renewables – this is encouraging the adoption of lower carbon technologies.  In the Netherlands, where building regulations are weaker and where the new build market is much smaller, new builds present only a small opportunity for lower carbon technologies.

Q2. How will the two heating markets change to 2025?


By 2025, we expect lower carbon technologies to account for one quarter of annual heating appliance sales in the Netherlands, with gas boiler sales falling by around 75,000 units per year. A number of technologies will be competing for a share of these sales, with two key technologies dominating sales.  Lower carbon gas technologies will win out.

In France, we also see significant growth in lower carbon sales.  By 2025, we expect low carbon technologies to account for 30% of annual heating appliance sales – around 240,000 units per year.  A range of technologies will be competing for this – but we expect ASHPs to remain the leading technology, displacing primarily electric heating.  Lower carbon gas technologies such as hybrids, gas heat pumps and micro CHP will also be competing. 

To access the slide set for this webinar please go to our website.

How similar is this story in other European markets?

One thing is for certain – each European country has its own unique story as to why it’s heating market looks the way it does. And each country will have a new story to tell as to why each will develop uniquely out to 2025.

Next in this webinar series, we will be looking at the prospects for one or two key technologies across a number of European markets.  To register an interest in this webinar, please email Places are limited.

[1] In our previous webinar, we compared Germany and the UK – two markets that will develop very differently in the next 10 years.  To access the slides set & recording of this, click here
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