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10 | THE PERFECT FIT REGULATORY ASSISTANCE PROJECT PART1 Introduction Nearly all major national, EU and global decarbonisation assessments see heat pumps as the key heating technology for transitioning heating to climate-neutrality by 2050, in particular in the residential and services sectors. To reach climate neutrality, the EU’s long- term strategy projects that the share of electricity in heating demand in the residential sector should grow from around 25% to 40% by 2030 and to 50-70% by 2050, while in the services sector from the current 50% share, it should reach around 65% and 80% respectively.1 McKinsey estimates that heat pumps will need to achieve a 40% penetration in the space and water heating technology mix in their Net-Zero Europe scenario2 (see Figure 1), and the European Commission’s own analysis foresees a need for rapid growth in the use of heat pumps across multiple scenarios (Figure 2). With a global focus, the IEA’s recent ‘net zero report’ projects that heat pumps will be the primary source of global heat production by 2050.3 As well as decarbonising heating, heat pumps can also offer significant energy security benefits, reducing demand for gas, much of which is imported and which currently dominates the energy mix used for heating in the EU. Figure 1. The rapidly expanding role of individual heat pumps in a decarbonising European heat mix (%) Penetration level in % Other Solar thermal Heat pump District heating Biomass boiler Coal boiler Oil boiler Hydrogen boiler Biogas boiler Gas boiler Source: McKinsey. (2020). Net-Zero Europe – Decarbonisation pathways and socioeconomic implications. 1 European Commission. (2020a). Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the regions — Powering a climate-neutral economy: An EU Strategy for Energy System Integration. https://eur-lex.europa. eu/legal-content/EN/ALL/?uri=COM:2020:299:FIN 2 D’Aprile, P., Engel, H., van Gendt, G., Helmcke, S., Hieronimus, S., Naucler, T., et al. (2020). Net-zero Europe: Decarbonisation pathways and socioeconomic implications. McKinsey. https://www.mckinsey.com/~/media/mckinsey/business%20functions/sustainability/our%20insights/how%20the%20 european%20union%20could%20achieve%20net%20zero%20emissions%20at%20net%20zero%20cost/net-zero-europe-vf.pdf 3 IEA. (2021). Net Zero by 2050 – A Roadmap for the Global Energy Sector. https://www.iea.org/reports/net-zero-by-2050PDF Image | RAP Perfect Fit Heat Pump
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