A primer on heat pumps

Open up any newspaper in the UK and Germany, and you’re guaranteed to find a topic on heat pumps. These devices have gripped both sides of the political and media debate. For some, they’re the future of heating and a game changer. For others, they’re a leftie liberal plot against good old fashioned gas. 2024 marks the 200 year anniversary since the first published work on thermodynamics and so starting the year with a report on heat pumps seemed apt. Love them or loathe them, they’re here to stay.

Origins

Heat pumps owe their origins to the musings of a French physicist, Sadi Carnot. Carnot was thinking about how to make heat engines more efficient. Carnot was working at the start of the Industrial Revolution, when engines were only operating at c3% efficiency and a lot of the physics which we take for granted wasn’t yet discovered.

In 1824 (ie 200 years ago!), he published one paper, “Réflexions sur la puissance motrice du feu” (Reflections on the Motive Power of Fire). This gained little attention while he was alive, and Carnot died of cholera 9 years later only at the age of 36. After his death, scientists like Clausius, Clapeyron, and Kelvin built upon Carnot’s paper to create the field of thermodynamics.

Thermodynamics, the science of heat and energy, revolutionised our understanding of the world. Carnot was a genius, whose ideas led to the creation of car and jet engines. His work involved the design of a now eponymous idealised heat engine cycle. A heat engine is a device harnessing the flow of heat (from hot to cold) to do work. Imagine a waterwheel, turning due to the flow of water. A heat engine works the same way. The Carnot engine is the “perfect” heat engine, and Carnot realised the efficiency of a heat engine depends on the source and sink temperatures.

Going back to our waterwheel analogy: I have two rivers, both meeting at the sea. River one flows from 90m above sea level. River two flows from 200m above sea level. We can intuitively see that a waterwheel placed on the second river will move a lot faster. Carnot formalised this into a theorem and formula, showing the max efficiency of a heat pump. Carnot also was the first to formalise what seems obvious to us today: heat flows downhill, from hot to cold.

Now some readers may be commenting that a heat engine is nothing like a heat pump. And you’d be right. Building on the Carnot cycle, British physicist (Lord) Kelvin realised that the Carnot engine was reversible. You could have a Carnot engine extracting energy from heat flow. Or, you could “put it in reverse”, and give the engine energy to move heat from cold to hot.

The concept of a reversed Carnot engine has since grown and developed, and taken a life of its own. 75% of homes worldwide have a reversed Carnot engine inside their homes: the fridge. Refrigeration is a perfect example of this: fridges use electricity to move heat from inside the fridge (cold) to outside (warm). This is completely against the natural order of heat flow. Heat pumps work the same way - think of them as fridges for your home. They use electricity, and move heat from the cold exterior into the warm interior.

So heat pumps are just big fridges: why are they being heralded as the future of heating?

But what makes them special?

The answer is efficiency. Let’s think about the simplest form of heating: fire. We burn wood, and this generates heat. Most homes do something similar with gas boilers. We burn gas, use that to heat water and pump that hot water around our homes. If we wanted to electrify heating, we could switch to electric heaters. Instead of burning something, these convert electrical energy into heat. These work the same way as the infrared heaters we’ve all seen at the outdoor areas of restaurants and bars.

For all these cases, we’re converting energy from one form to the other. But energy conversion is never efficient. We may put one unit of energy in (typically chemical or electrical) but we get less than unit of heat energy out.

We can see that gas boilers are 92% efficient, meaning they take in one unit of gas, and return 0.92 units of heat. Heat pumps are the real outlier, at a 350% “efficiency”.

What makes heat pumps special is that they do not convert energy into heat. Instead, they use energy to move the existing heat around. This makes them far more efficient than traditional heating methods.

Physicists and engineers use a number called the coefficient of performance (COP) to describe how good heat pumps are. The COP shows you how many units of heat you can move for each unit of electricity that goes in. It is technically different to efficiency, but for this article we can conflate the two terms. As the graph showed, we’re seeing standard COPs near 3.5.

Knowing this, we can look into why heat pumps are required for the electrification of domestic heat. I’ll take the UK as my example as the government publishes a lot of useful data.

Electrifying the UK’s heat

According to DESNZ, the UK used c1970 TWh (teraWatt-hours) of energy in 2022. This includes electricity, gas, petroleum, bioenergy and solid fuel. We can see that 28% of this was on domestic usage.

Drilling down into the domestic usage, we can see that just over half of this energy was used for heating homes (“space”). This is significant: in 2022 about 15% of all energy the UK used was just to heat homes.

We’ll do one more drill down, and this time look at where the energy usage for space heating came from. Doing so, we find that 78% of the UK’s domestic energy usage for space heating came from gas. This energy is equivalent to 19.4 million tonnes of oil, or 225 TWh.

If we switched to electric heaters, the UK National Grid would have to output another 225 TWh of energy. The National Grid’s entire energy demand in 2022 was 320.7 TWh. Switching to electric heaters would almost double the UK’s electricity demand. And the UK’s energy consumption wouldn’t change, but would become less carbon intensive. If we switched to heat pumps, their COP of 3.5 means electricity demand increases by 64 TWh. This increase is in line with the National Grid’s own projections for the future. The jump to heat pumps would also reduce the overall energy consumption of the UK by over 160 TWh.

So its clear that heat pumps are the solution for electrifying domestic heating. They’re more efficient, they can reduce energy usage, and they can lead to decarbonisation. Despite all their positives, there are still some misgivings and concerns around heat pumps. Some are justified, others are overblown. In the next section, I go through the most common.

Mistakes, misgivings, and misconceptions

There are a few recurring counter arguments and concerns against heat pumps:

1. Hydrogen is a better alternative to natural gas heating systems
2. It’s too cold for heat pumps to work here
3. Heat pumps won’t work in our buildings
4. They’re too expensive to run

Hydrogen is a better alternative to natural gas heating systems

This easy enough to dispel. Politicians around Europe are flirting with hydrogen for domestic heating. Germany has drafted a law stating that gas boilers switch to hydrogen by 2035. The UK government was recently forced to cancel a controversial hydrogen heating pilot project. Hydrogen is the most abundant element in the universe. Hydrogen fuel (H2) is incredibly energy dense fuel: 3x denser per kg than diesel or petrol. Burning hydrogen is clean, and the byproduct is water. So why is it so controversial?

The main issue is getting the hydrogen. Creating the hydrogen fuel takes energy. If we want to be carbon neutral, we need clean energy to create the fuel. We then pipe the fuel in the existing network, and then new boilers can burn the H2 in homes. This all seems straightforward enough, and it is. The problem lies with the energy requirements - not the technology. We know the domestic space heating energy requirement is 225 TWh. So we need to create enough hydrogen fuel to generate 225 TWh when burnt. We also should use clean energy sources for this - no point making clean hydrogen by burning dirty coal. The cleanest process to make H2 is electrolysis. But, electrolysis plus hydrogen burning has a combined efficiency of around 30%. This means we would need 750 TWh of electricity to produce enough H2 to transport to homes for burning. Remember the National Grid’s 2022 electricity demand was 320 TWh - for hydrogen to replace gas we would need to build two more grids. Thanks to physics we can see that green hydrogen cannot replace gas. If we want to electrify residential heating, we need heat pumps.

It’s too cold for heat pumps to work here

False. Heat pumps work well in the Nordics, which are far colder than Germany or the UK. However it is worth noting a few things. Firstly, heat pumps do get less efficient as temperature decreases. This makes sense. Heat pumps work to pump heat against a heat gradient. The colder the outside, the steeper the gradient, the harder it is to pump.

If we want to heat a home to 35°C, and the outside is -20°, an average air-source heat pump has an efficiency of 1.5. They still work, and this scenario is something most people would never face. Germany and the UK rarely get to -20°C. Furthermore, ground-source heat pumps are an alternative. Ground-source heat pumps pull their heat from the soil, not the air. The soil tends to be 10°C warmer than the air in winter, as the deep ground retains heat really well. This resolves all of temperature concerns (at least for the typical European climate).

Heat pumps won’t work in my building

This concern is more UK centric, where we have some of the oldest housing stock in Europe. This concern is partially correct. Heat pumps can work in any building, but it’s a challenge if the building is poorly insulated. Poorly insulated buildings leak heat. The heat pump has to pump heat into the building faster than it is leaking out. This can lead to the heat pump being on for longer, resulting in higher running costs or more wear and tear. This might also result in the need to install larger radiators, to spread the heat through the house. For the immediate future, buildings should be insulated first. However, this isn’t the final answer. Heat pump COPs currently range from 3-4. In theory, the max COP is 8.8, assuming typical European weather conditions (thanks Carnot). This shows that heat pumps have room to improve and get even better. We could feasibly see heat pumps with a COP of 6-7, which could work in any building no matter how leaky.

Heat pumps are too expensive to run

Again, this problem depends on where you are in Europe. The electricity-to-gas price ratio of countries governs how expensive running heat pumps is. If the electricity-to-gas price ratio is less than 3, heat pumps are cheaper to run than gas boilers. As the ratio falls, running heat pumps becomes cheaper and cheaper. According to Nesta, the UK and Germany have some of the highest electricity-to-gas ratios in Europe. Fixing this requires political effort. This would complement existing policies, but target running costs rather than purchases.

The PT1 perspective

We believe heat pumps are the future of residential heat. We’ve put our money where our mouth is, with three investments in this space. These companies are working on fundamental problems, but there are still untouched areas:

• Enough homes aren’t insulated fast enough to support heat pumps
• There is a funding and incentive disconnect in rented homes around retrofitting
• There’s room to invent better, quieter, more efficient heat pumps
• Edge case homes may need an electrified heating solution which isn’t a heat pump

The first two of the listed problems are prime VC territory, and we’re happy to speak to anyone building or working in this space.