Affected by extreme weather, this winter is particularly cold. Various energy conservation laws and regulations of European countries have also been issued with the impact of the Russia-Ukraine conflict. At the same time, the vigorous implementation of China’s dual carbon policy has led to the hot sales of heating equipment represented by air source heat pumps not only in the European market, but also continuously achieving good results in China this year, starting to gain popularity.
European Countries Implement Energy-Saving Measures, Italy Shortens Heating Time
Affected by the Russia-Ukraine conflict, Europe is facing an energy crisis. As winter approaches, many European countries are implementing energy-saving measures. Following Spain, Germany, and France, the Italian government signed a law on winter energy conservation on October 7th.
According to the British Broadcasting Corporation (BBC), before February this year, Italy was the second largest importer of Russian natural gas in Europe, with Russian gas imports accounting for 40% of its total supply. However, this proportion has now decreased to 10%. In response to the energy crisis, Italian Minister of Ecological Transition Roberto Singrani signed a decree on the 7th, which includes a 15 day reduction in central heating days from 2022 to 2023, and a 1 degree Celsius reduction in residential heating temperatures in some areas.
Many European countries, apart from Italy, have announced similar energy-saving measures. On October 6th, the French Ministry of Energy Transition announced the 2022 winter energy-saving plan, which stipulates that the winter heating temperature for residential buildings, educational institutions, offices, and public open spaces must not exceed 19 degrees Celsius, and some public facilities will not provide hot water. The energy-saving plan also calls on the French to reduce hot water shower time and completely shut down electronic equipment in standby state at night.
The Spanish government passed a series of energy-saving policies in August this year. During winter, the heating or air conditioning temperature of enterprises, restaurants, museums and other places must not exceed 19 degrees Celsius. When turning on air conditioning or heating, doors and windows should be closed, and the lighting of shop windows must be turned off after 10 pm. Germany has stopped (landscape) lighting for public monuments and buildings, and may turn off heating at entrances, corridors, and lobbies of public buildings.
However, the UK government has not yet released energy-saving measures. On October 7th, UK Climate Minister Graham Stewart stated that despite warnings from National Grid that households and businesses may face a 3-hour power outage plan every day this winter, the UK government will not mandate people to use less energy.
According to Reuters, there are still differences in the response measures of EU countries to the energy crisis, with most countries demanding that the EU set a natural gas price ceiling, but it is difficult to reach consensus on details. Germany, Denmark, and the Netherlands oppose setting price caps, fearing that it may make it difficult for them to purchase enough natural gas and dampen the drive to reduce energy consumption.
Strong Growth In Exports Of Air Source Heat Pumps In China
In heating equipment, especially air source heat pumps, they are favored by the general public in Europe. It is understood that as a renewable energy utilization device, heat pumps are the most effective way of electric heating, and their significant energy-saving and carbon reducing characteristics have become the optimal technical solution for replacing low-temperature thermal energy production in fossil fuels. In addition to cooling and heating, air source heat pumps also have functions such as hot water and drying.
According to relevant industry statistics, for the construction industry, compared to coal-fired boilers, heat pumps can reduce carbon emissions by 60% -80%. Simply put, when heating a house, using a heat pump only requires 20% of the energy consumption of natural gas. It can be said that compared with traditional heating methods such as loose coal and gas, heat pumps have obvious advantages in terms of energy efficiency and environmental protection. With policy subsidies and the soaring prices of traditional energy, the economy of heat pumps has been greatly improved.
At present, China is the world’s largest exporter of heat pumps, accounting for about 60% of the global production capacity. Chinese air source heat pumps, which are affordable and high-quality, are popular in the European market. Statistics show that in the first half of this year, China’s exports of air source heat pumps to Bulgaria, Poland, Italy, and Spain increased by 614%, 373%, 198%, and 71% year-on-year, respectively. From January to August, the cumulative export value of air source heat pumps increased by 63.1%, with sales increasing by 27.3% and average prices increasing by 28.1% year-on-year.
The Domestic Market Has A Vast Blue Ocean
In addition, the heat pump market has benefited not only from the booming overseas demand for exports, but also from the “dual carbon” target, becoming a vast “blue ocean” in the domestic market. According to estimates, the domestic heat pump market is expected to reach 39.6 billion yuan by 2025, with a CAGR (compound annual growth rate) of 18.1% from 2021 to 2025; It is expected that the size of the European heat pump market will reach 35 billion euros by 2025, with a CAGR of 23.1% from 2021 to 2025.
Haier Smart Home holds 9 spots in the TOP10 best-selling models of air source heat pump water heaters, leading the industry comprehensively. The company recently revealed in response to media interviews that in China, Haier’s air source heat pump sales accounted for 14.4% of the total sales and 22.2% of the total sales, firmly holding the “double first” position in the industry and winning the first market share of the heat pump series for two consecutive years. Overseas, Haier air source heat pumps experienced high growth in exports to Europe in the first half of the year, with an increase of over 200% and a tenfold increase in order volume. Recently, Haier air source heat pumps have settled in Guye, Tangshan, and won a heating renovation project worth over 60 million yuan.
At present, the “coal to electricity” policy is the main force driving the sales growth of air source heat pumps. From the bidding projects of “coal to electricity”, in 2022, projects in Northeast China, Inner Mongolia, and Northwest China showed explosive growth. At the same time, the markets of Shandong and Shanxi continued to make efforts, while the market of Henan experienced a downturn in 2021 and re tendered.
Although the “coal to electricity” project will exist for a long time, it will gradually decrease in the long run. The responsible person of Wanhe said frankly: “At present, the retail business of Wanhe air source heat pump heating equipment accounts for 40%, and the business of ‘coal to electricity’ accounts for 60%. In fact, compared with the previous, our sales proportion of ‘coal to electricity’ has declined, which is related to the reduction of the whole ‘coal to electricity’ bidding project. Among commercial heating products, the proportion of ‘coal to electricity’ projects is also gradually declining, but still accounts for more than half of the proportion. This change will change with the decrease of the northern ‘coal to electricity’ bidding projects.”
In addition, in response to low-carbon policies and the Kigali Amendment, some companies such as Midea have also launched more environmentally friendly R290 air source heat pump heating products. Under the influence of recent cold waves, Northeast China, Hebei and other regions have successively released some favorable policies related to air source heat pumps as heating has been put on the agenda. The future market is promising.
Air source heat pump products are not only used for heating, water heaters and other fields, but also have significant growth. In the future, continuous innovation and iteration of enterprises and markets are needed for development, and B2B business and retail markets should be developed simultaneously.
