Heat pumps vs. AC: Report notes progress, challenges in reaching climate goals

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While the world’s governments have taken measures to promote energy efficiency this year, a new report by the International Energy Agency (IEA) says the pace at which improvements to energy efficiency are made this decade needs to double if global climate targets are to be met.

The report found in 2023, the momentum behind energy efficiency continued to increase in part due to the global energy crisis that was seen as a result of Russia’s invasion of Ukraine.

That crisis effectively turned some people away from residential and commercial gas methods of heating their home, with the demand dropping more than 15 per cent in 2022 compared to the year before. About 40 per cent of that decline can be attributed to the relatively mild winter last year, but more than half was due to gas-saving measures.

One such method that people turned to was with heat pumps, with the report noting a sharp increase for their sales last year and suggesting the energy crisis likely “marked a turning point” for residential gas demand in Europe. In the first half of this year, heat pump sales were up 75 per cent in Germany, the Netherlands and Sweden combined.

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It wasn’t just Europe that’s been seeing a rise in heat pump use, with multiple countries introducing minimum energy performance standards requiring heat pumps be installed, and some implementing or announcing plans to phase out fossil fuel boilers as well.

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In Canada, for example, heat pumps began making headlines as Prime Minister Justin Trudeau’s government continued facing pressure over its recent carbon price carve-out in which it paused its carbon price for home heating oil. The government also said Ottawa would work with provincial governments on plans to subsidize the products for low-income residents.

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Also, a recent study from the Canadian Climate Institute dubbed heat pumps as the “lowest-cost” option for heating and cooling homes in Canada.

But while the report applauded what it considered strong policy progress on efficiency this year, it noted the improvements on energy intensity — a primary measure of efficiency — had slowed in 2023. This was due to various factors, including an economic rebound in energy-intensive sectors such as petrochemicals and a booming demand for air conditioning because of 2023 being on track to be the hottest year on record.

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The IEA says following the hottest summer on record, with temperatures exceeding 50 C in the U.S., Middle East and China, there are higher demands for cooling and it could prompt a “vicious cycle” of high electricity use and carbon emissions.

Weekly sales of air conditioners jumped by about 16 per cent in China, for example, and those higher temperatures are in turn causing record levels of peak electricity demand in more than 10 countries around the world. The U.S., China, Canada, India, Brazil, Thailand, Malaysia and Colombia together accounted for more than 60 per cent of the total electricity demand in the world.

With more demand from inefficient cooling devices, residents are then burdened with high cooling costs.

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According to the IEA analysis, in order to achieve net-zero emissions by 2050, which it says is essential to limit global warming to below the 1.5 C target, improvements to energy efficiency need to rise to more than four per cent per year on average by 2030. As of 2023, global energy intensity had only improved by 1.3 per cent.

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“The world’s climate ambitions hinge on our ability to make the global energy system more efficient,” IEA executive director Fatih Birol said.

It was not all negative, however, as the report did note “strong gains” from certain countries and regions, with the European Union set to post a five per cent improvement this year, and the U.S. on track for a four per cent improvement in 2023. In fact, more than 40 countries in total have improved energy efficiency at a rate of four per cent or more for at least one year since the energy crisis began.

World leaders are set to meet this week at COP28 and the IEA urges energy efficiency be prioritized, adding tripling global renewable energy capacity and having oil and gas companies commit to clean energy transitions should be worked on.

The report suggests achieving the efficiency-doubling target would come with benefits including cutting home energy bills, the creation of 4.5 million additional jobs, and lower carbon dioxide emissions by more than seven billion tonnes.

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