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Delivering green heat: The growth of Scotland’s heat pump industry

24 Oct 2023 • 7 minute read

Scotland is emerging as a heat pump manufacturing hub to meet a surge in demand.

Heat pumps are emerging as a key solution to the decarbonise energy use while reducing bills for households and businesses. 

As governments around the world seek to reach net zero emissions amid a global energy crisis, heat pumps are a proven technology that can help. To keep up with rising demand, heat pump manufacturers in Scotland are contributing to UK production targets.  

When it comes to energy efficiency, heat pumps have an edge over gas-fired boilers. Heat pumps available today can produce three to four times as much heat as they use in electricity. This puts their efficiency scores at 300% to 400%, compared with the 90% or higher of even the most efficient gas-fired boilers available.

The energy transition simplified

There is a misconception that the energy transition requires a radical overhaul of technologies and processes, but not all the changes are as large-scale as perhaps believed. Heat pumps operate on the same principle as air-conditioning units. For example, the chassis on Mitsubishi Electric’s original heat pump was taken from one of its air-conditioning units, with many shared components between the technologies.

This year marked three decades since the Mitsubishi Electric Air Conditioning Systems Europe Ltd (M-ACE) facility opened in Livingston, West Lothian. The site has a workforce of almost 1900. The company’s manufacturing used to be split 80% for air conditioners and 20% for heat pumps, but this ratio has recently switched. Mitsubishi Electric now devotes the majority of its production capacity to heat pumps.

Meeting demand for heat pumps in Scotland

With demand for heat pumps surging in Scotland, the company is in a strong position to serve the growing market. Sales in Scotland have surged by 95% in two years, according to the MSC Database, with the air-source heat pump market anticipated to be worth £70 million in 2022. To date, the nation has accounted for 16.5% of all UK air-source heat pump installations, and the market is likely to grow further in 2023.

Eliminating the need to ship products to the other side of the world significantly reduces the company's carbon footprint from transportation. 

“Having that supply chain closer to where you are reduces that embodied carbon,” added Dean.

With its latest offering, Mitsubishi Electric is pushing the boundaries of sustainable innovation. The company's R290 air-source heat pump uses propane as a refrigerant – a natural substance. 

“The propane that we use in heat pumps again has an incredible impact on reducing embodied carbon. But it also has improved performance,” says Dean. “You’re now into the realms of a high-temperature heat pump that can very much compete with a gas boiler in the amount of heat it provides.

“That doesn’t mean that we will use it as a direct replacement for a gas boiler because we still want to use as little energy as possible. Our systems will be fighting to lower that flow temperature as much as possible to keep the efficiency. But when we need hot water and we need it quick, then we can certainly provide it at 75°C into the tank.”

Government support for energy efficiency

The UK Government has announced a target of 600,000 heat pump installations per year by 2028. With an estimated 72,000 installed in the UK in 2022, there is some way to go before reaching this target within the next five years.

However, there are plans in Scotland to make a significant contribution to this target setting an ambition of installing 200,000 heat pumps a year by the end of this decade. 

At present, more than 365 businesses are engaged in Scotland's green heat value chain. The Scottish Government has committed £1.8 billion of public funding to decarbonise heat and improve energy efficiency in buildings across the country, with plans of raising this sum through private investment. This synergy is critical to the success of Scotland's growing heat pump market.

“There’s a long heritage and commitment here and there’s a great deal of support,” said Ayre. “It’s not just Scotland, it’s also the whole of the UK. There’s a significant relationship with the governments in trying to make sure that we form part of the solution in the Future Homes Standard and targets towards net zero.”

With Scotland set to ban the sale of new gas-fired boilers in new build properties as early as 2024, a year ahead of England, there is a greater incentive to adopt low-carbon heating solutions. 

“We’re starting to see the momentum picking up as the regulations start to kick in. The markets are responding to the signals. There are lots of innovations happening. New products are being developed, and new companies coming into the market as well,” said Doreen Reid, a specialist in low-carbon energy at Scottish Enterprise.

The green heat supply chain

Scottish Enterprise is focused on developing a robust and sustainable supply chain for green heat within the country, with domestic firms working alongside international operators. Scotland is also developing local thermal energy efficiency programmes, identifying regions where properties are in most need of energy efficiency retrofitting.

“If we hit the targets, then it will make us one of the leading countries in terms of heat pump manufacturing and installation across Europe,” added Reid.

One such scheme is Home Energy Scotland, which offers a combination of grants and loans to support heat pump purchases and energy efficiency improvements. This is especially important for buildings without proper insulation, where heat pumps will not operate anywhere near as effectively.

Skills and training for green heat

One of the most pressing issues is the skills required to accommodate the vast roll-out of heat pumps. But there are plans to address this with talent in Scotland. Mitsubishi Electric is busy training the next generation of heat pump engineers and installers for servicing, alongside reskilling experienced personnel – with the scalable capacity to increase this through flexible training models.

Scotland also benefits from 18 colleges running specialist training courses dedicated to equipping the future workforce with the skills that they need for energy efficiency and low-carbon heat projects. To boost workforce skills further, a fully equipped and certified Mobile Heat Pump Training Centre is routinely driven to 24 locations around Scotland to benefit installers living nearby.

Another challenge is ensuring that every part of the heat pump supply chain keeps growing at the same pace. “We have the technologies now to achieve net zero. What we require is collaboration,” added Dean.

While there is no single solution to achieve net zero and directly replace fossil fuels, a variety of green and low-carbon technologies are needed.

Heat pumps should used as part of a broad energy mix alongside other technologies such as solar panels, wind power, greater insulation, low-carbon hydrogen, heat networks, and battery storage. This combination is what will ultimately deliver the decarbonisation of heat. 

By nurturing vital partnerships, Scotland is building its heat pump industry and contributing significantly to its goal of achieving net zero emissions by 2045 – five years ahead of most other countries. 

Watch the webinar

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