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NIBE has reached an agreement to acquire 60% of the outstanding shares in Gaumer Company Inc. NIBE has also agreed to acquire the remaining 40% of Gaumer´s outstanding shares at a later time. Gaumer of Houston, Texas will become part of NIBE Element North Americ
Gaumer is one of North America´s leading designers and manufacturers of electric heaters, controls and turn-key engineered systems for the Power Generation, Oil & Gas and Petrochemical markets. Gaumer´s product range for these markets is comprised, among other products, of Immersion and Circulation Heaters, Heater Control Panels, Liquid Fuel Gas Conditioning Systems as well as Integrated Heater Systems and Control Systems.
On 1 January 2018, Klas Dahlberg will take up the position as Head of NIBE Climate Solutions, succeeding Kjell Ekermo who will leave NIBE after 19 successful years.
Klas Dahlberg (53) is since 2016 Director of International Business Development within NIBE Climate Solutions. He is also Chairman and a member of the boards of several of the business area’s foreign subsidiaries, and a member of the business area’s Supervisory Board.
Klas, who has an MSc in Engineering, joined NIBE following a successful international career spanning 30 years with Scania, most recently as Senior Vice President Buses & Coaches, focusing on sales and marketing. Klas has lived and worked in Germany for many years and has now returned the Kullen Peninsula in southern Sweden where he grew up.
Heating a home using Liquid Petroleum Gas (LPG), oil or direct electric is generally more expensive than mains gas. There are four million households not connected to the gas grid. More and more homes are being built in rural areas to meet demand. Whilst most of these homes will be able to connect to a mains gas supply, the high cost of grid connection can be prohibitive in some cases. The Government has pledged, as part of the housing white paper and the Budget announcements to increase house building substantially to keep up with population growth and to tackle undersupply. This is likely to mean increased development in rural areas and thus a greater dependency on non-mains gas heating options.
The Government has committed to phasing out the installation of high carbon fossil fuel heating in new homes in the early 2020s. You would assume that very few new homes have oil heating systems, however new homes are being built today with oil heating and PV on the roof to meet building regulation. The phase out of heating oil is greatly welcomed, but as house builders look for alternatives to oil, it is paramount that the sustainability and affordability of the alternative is considered. However, in new build policy could go further.
Housing developers are increasingly specifying LPG for new build homes instead of oil due to the lower carbon intensity of LPG. But given the availability of renewable, green technologies, should we be building homes reliant on expensive fossil fuels today?
There are 2.5 million fuel poor homes, representing 11% of English households. Those without a gas grid connection are 1.5 times more likely to be at risk of fuel poverty than those with a gas connection. This is linked to the high costs of some off-grid heating options. Fuel poor households struggle to keep their homes warm, suffer from cold-related illnesses and are often forced to make decisions between heating and eating. The choice between heating and eating is real with infants born into these families suffering from low weight gain. Reducing household spending on energy allows these families to spend money on other essentials and reduces the risk of rent and mortgage arrears.
Based on a heating and hot water demand for a new detached home of 7,550kWh, using LPG could be costing a household almost 30% more a year to heat (assuming a p/kWh price of 5.61) compared to the same home heated by an Air Source Heat Pump with an efficiency of 367% on a typical electricity tariff of 15.9p/kWh. This substantial saving is equivalent to 5% of household spending on food and drink.The Government has promised to invest an additional £2bn in new affordable housing. However, affordable homes are defined as such based on the cost to buy or rent the property, and not the running costs. We need to build more low-cost homes and support people onto the housing ladder but to do so and lock families into high cost, carbon emitting heating systems which will need to be replaced in the future is wrong. Opting for a heat pump during the design stage could make a significant difference to the affordability of homes the Government has promised to deliver. These homes will last decades, and we should be doing what we can to limit their impact on our planet today and in years to come.
Read Phil Hurley's blog
NIBE Industrier AB has acquired 45% of the shares in Rhoss S.p.A., which operates in Codroipo, Italy. NIBE also has an option to acquire the remaining 55% of the shares in Rhoss.
Rhoss is one of Italy’s leading manufacturers of ventilation and air conditioning equipment intended for commercial, institutional and industrial applications.
Founded in 1968, it has just over 300 employees and sales of approximately EUR 68 million, with an operating margin before depreciation of just over 5%. About 45% of sales are in the Italian domestic market, while the remainder is largely sold in other markets in Europe.
“Rhoss will help us further expand our range of climate control products for larger properties as well as our presence in this interesting market,” said Gerteric Lindquist, CEO of NIBE.
“It is reassuring that Rhoss’ management, headed by MD Andrea Corradi, will continue to run the company, and that those of us on Rhoss’ board of directors will work together with the management of Irsap S.p.A., the current sole owner.”
The purchase price is not specified because the acquired share of the business will constitute a small part of the NIBE Group.
NIBE shows continued good sales and earnings performance in today’s nine-month report.
“During the first nine months of the year, overall demand has been positive, leading to continued good growth of both volume and earnings. A more sustainable social order in energy supply, transport and climate control of buildings now seems to be here to stay, which is positive for our business,” said Gerteric Lindquist, CEO of NIBE.
“The European market for NIBE Climate Solutions' products, with heat pumps at the forefront, continues its positive progress, while the North American heat pump market for single family homes has been weaker, mainly due to the discontinuation of tax subsidies in the United States. In an increasing number of countries, like Norway, the Netherlands and the UK, government decisions on the long-term phase-out of fossil fuels creates great potential for Climate Solutions’ products.”
“Volume continues to grow in the NIBE Element business area and its operating margin now steadily exceeds 10%. Behind this success lies things such as the ability to offer a comprehensive, high-quality range of intelligent system solutions with sustainability profiles.”
"After the acquisition of Canadian company FPI almost a year ago, the NIBE Stoves business area has gained a good international reputation and a geographical balance, bringing completely different opportunities for selling European products in North America and vice versa.”
“We have a strong product programme and a timely business philosophy that focuses on sustainability and energy efficiency. As in previous years, external factors are difficult to assess, but with our stable profitability and good financial preparedness for further acquisitions, we are cautiously positive about 2017,” said Lindquist.
Read the full report
The Department for Business Energy and Industrial Strategy (BEIS) has published the eagerly anticipated Clean Growth Strategy. The Strategy promises to lead the way to a low carbon future, providing a clear direction of travel away from polluting, dirty fossil fuels to clean, green energy and buildings. The Prime Minister stated that “clean growth is not an option but a duty”, this is something that NIBE supports wholeheartedly. We must build a more sustainable future for our children and grandchildren, and the Clean Growth Strategy provides the framework for action to achieve this. But how will we get to this more sustainable future?
In my view, the Strategy signifies a shift in Government thinking and demonstrates a clear commitment to addressing climate change across the whole economy. What the Strategy lacks is detailed policy proposals and timescales. Alongside the Strategy, the Government has published a raft of consultations and promises to release more over the coming months, providing the opportunity for industry to influence the delivery of the Strategy.
BEIS has committed to phasing out the installation of high carbon fossil fuels in homes off the gas grid during the 2020s. The Renewable Heat Incentive (RHI) is the Government’s flagship scheme to switch to renewable heating systems, with at least 40% of applications to the domestic scheme displacing fossil fuels (see graph right). The RHI will play a significant role in this transition in the short term but with funding only secured until 2021, new policies are needed to tackle decarbonisation in off grid homes.
Whilst the RHI is incentivising the switch from fossil fuels, the Sustainable Energy Association has recently published analysis which suggests that the Government’s Energy Company Obligation Scheme (ECO) is actively driving the uptake of oil boilers. This is a clear conflict, on the one hand, households are encouraged to switch away from oil to lower their emissions and on the other, homes are receiving new oil boilers through ECO. If left unchanged, the oil boiler installation rate could increase further (see graph below) putting our climate change targets and environment at risk.
The Government will be consulting on the next phase of ECO in the new year and it is obvious that the Government needs to address this issue. We should be encouraging households to move away from high carbon systems rather than install them. The two schemes can and should complement one another.
NIBE’s policy paper puts forwards five further recommendations to support the Strategy and the ambition to phase out heating oil.
The Clean Growth Strategy acknowledges this need, understanding that the homes we build today are not fit for the future. The Government will consult on improving the requirements for new homes to ensure that they are future-proofed for the installation of lower carbon systems such as heat pumps.
The Government has set an aspiration for homes to be EPC band C by 2035 which is great, however this needs to be accompanied by a strong policy framework to drive homeowners to undertake improvements. I am therefore pleased to see that the Government will consult on EPCs and energy performance standards shortly.
The Government is committed to the continuation of the RHI and are reforming the scheme to encourage the greater uptake of technologies such as heat pumps. Post RHI, the Government will need to consider other policy options such as boiler scrappage schemes. NIBE will continue to work with the Government to improve the RHI, ensuring that it complements ECO, and to pave the way from fossil fuels to renewables.
It is disappointing that the key role of installers in the transition to a low carbon future has not been emphasised as part of the Clean Growth Strategy. However, the boiler plus policy document, which was published alongside the Strategy, does highlight the role of installers in providing information and the opportunity to boost productivity through installer training and higher standards.
5. Enable smart heat pumps to provide flexibility and storage options for the National Grid
The Government is committed to implementing the Smart Systems Plan which involves the roll out of smart meters, enabling suppliers to offer smart tariffs. NIBE’s heat pumps in Sweden automatically respond to variable time of use tariffs, the introduction of time of use tariffs here could enable consumers to lower their bills by shifting their demand.
Heatpoint will become a part of the NIBE Element business area and belong to the SAN Group as a new important member of the NIBE Element Railway Solutions.
Heatpoint has its headquarters in Bodegraven, Netherlands and was founded 1998 by the existing owners and management - Mr Kees Jan Bruijnen and Mr Wolter van Houten whom also will remain as part owners.
The main activities are switch point heating systems and cable ducts for railway and the company is market leader in the Netherlands. The revenue in 2016 amounted to approx. 3 EUR million with an operating margin of 20%. The company has 10 employees.
Energy in the UK, and how we generate and conserve it, is high on the agenda with Government and business leaders debating as to where our energy will come from in the future and how we can use it in smarter ways.
Today, this has been recognised in the launch of the Government’s Clean Growth Strategy which outlines the objectives for the UK to meet its carbon targets. NIBE Energy Systems welcomes the publication and today shares its own policy paper which highlights what it believes is required to drive forward the installation of renewable energy systems and ensure that all homes can accommodate low carbon heating in the future.
The paper focuses on opportunities to deploy heat pumps, initially in the off gas grid market, which is dominated by carbon intensive fuels such as heating oil and coal that the Government aims to transition away from. NIBE welcomes the Government’s committement to phase out these high carbon heating fuels during the 2020s.
“There has never been a better time for the UK to champion heat pumps in domestic applications and to encourage greater market penetration of such heating systems, learning from what our European counterparts have achieved,” said Phil Hurley Managing Director NIBE Energy Systems. “It is our aim to work with the Government to encourage homeowners to replace fossil fuels with renewable heating systems, thereby unlocking the potential for homeowners to make significant contributions in reducing UK carbon emissions.”
NIBE’s paper provides five policy recommendations which support the Clean Growth Strategy:
1. Ensure homes built today are constructed to modern standards which should enable low carbon heating systems to be easily and cost-effectively installed. This is particularly important in off-grid areas.
2. Target off-grid properties with either regulation (mandating a carbon intensity value for the heating system) or by pricing the emission externality to facilitate a shift away from the most carbon intensive fossil fuels.
3. Help tackle the upfront cost barrier by providing some of the domestic RHI subsidy as an upfront payment, or by supporting an oil/coal boiler scrappage scheme.
4. Engage the installer base. Reduce the barriers they face and provide incentives to offer heat pumps as an alternative technology in off-grid areas.
5. Build policy which takes advantage of the flexibility and load shifting services that heat pumps can provide to the National Grid. Enable time of use tariffs so the smart heat pumps can adjust usage based on grid and market signals.
The implementation of a co-ordinated long-term strategy to decarbonise our buildings is needed and the release of the Clean Growth Strategy sets a clear direction of travel towards low carbon heating technologies.
“It is evident that the UK heat pump market is not achieving its full potential and this needs to be addressed as a matter of urgency,” said Phil. “It is imperative that the discrepancies on specific targets are challenged and that policy is written to support this. By targeting off grid areas to remove expensive, inefficient and unsustainable oil systems, the Government can make homes warmer and more comfortable whilst reducing our carbon footprint and reliance on polluting fuels.”
Phil concluded; “We remain committed to raising awareness for positive change and the implementation of policies to support the UK’s carbon targets and see no reason why this can’t be attained with cohesive thinking and strategy between manufacturers, installers and Government.”
Read NIBE's Policy Paper
A change in Government legislation has given homeowners a helping hand to combat the cost of rising conventional energy prices by increasing payments to those homeowners who choose to heat their properties with a renewable energy solution.
Renewable Heat Incentive (RHI) payments are paid to homeowners after installation of a renewable energy system and with this in mind there is little wonder that the market is burgeoning.
“Sustainable heating solutions for domestic situations remain fairly uncommon in the UK but our Scandinavian counterparts have been pioneering this for decades now,” said Robin Adderley sales and marketing director NIBE Energy Systems. “We want to make such solutions even more accessible for homeowners in the coming years both in retro fit and new build projects and this added incentive from the UK Government will permit them to investigate the possibilities more fully knowing that financial support is available.”
The RHI payments were introduced in 2014 to incentivise consumers into choosing a renewable energy heating system such a Ground Source or Air Source Heat Pumps with the homeowner receiving a fixed sum payment from the Government for a fixed period of time – 7 years. In order to drive this forward further, and to meet sustainable energy targets outlined by the Government, Ground Source Heat Pumps have seen payments rise from 19.64p/kWh to 19.86p/kWh whilst Biomass Plant systems have increased to 2.26p/kWh. Air Source Heat Pumps enjoy the most significant financial benefit with changes from 7.63p/kWh to 10.18p/kWh an uplift of 2.55p/kWh.
Plentiful information is available to homeowners offering advice and whether this technology could provide them with a tangible solution. Heat pumps can be linked to existing radiator systems making them ideal for retrofit as well as solutions for new build homes. Handy calculators, such as the one NIBE provides, allow you to share your current usage and determine the financial benefits changing to renewable energy could deliver.
The RHI scheme was the first of its kind in the world with the aim of making a significant contribution to the 2020 ambition of 12% of UK heating being generated from renewable sources as opposed to more typically conventional sources.
“Primarily homeowners want reliability from their heating and hot water systems but cost effectiveness also plays a huge part in their decision making process,” said Robin. “As more people, particulary those that are not connected to main supplies, discover the ease, simplicity and reliability of heating systems such as heat pumps the increase in RHI payments will only serve to fuel further installations.”
Mark Goldman who installed a NIBE Ground Source Heat Pump system into his new property in Devon has enjoyed RHI payments to within a pound of the estimate provided by his Installer. “Our old home was a draughty Georgian property that required three oil fired boilers to keep us warm. When we designed our new home we were determined not to be held to ransom by oil prices and this sparked the idea of building an energy efficient house. We have actually enjoy the experience of installing renewable and energy efficient elements to our home and are pleased the Renewable Heat Incentive (RHI) payments are exactly as predicted coming in within £1 of the original estimate!”
Never before have climate issues been more discussed with the recent extreme weather events and international leaders coming together to drive action on climate change. These extreme weather events are getting worse and there will be more of them. Urgent action is needed to address climate change and this means that renewable technologies need to take on a bigger and more important role in the UK which should lead by example. The Renewable Heat Incentive (RHI) is an area where the UK has led; the RHI was the world’s first financial incentive of its kind and it continues to play a significant part reducing our dependency on fossil fuels for heating, lowering our carbon emissions and tackling climate change.
In November 2015, the Government renewed its commitment to the RHI and in March 2016 it set out its proposals to reform the scheme. The industry has waited with bated breath for the regulations to come into force, unsure of what advice to give to clients and hesitant to speculate over timescales. The changes were anticipated in Spring 2017, however the election, followed in quick succession by summer recess, pushed back the implementation date further. Again, we waited for the uncertain conditions to pass.
The long wait for clarity was finally brought to an end on the 29th August when the regulations were laid before Parliament. Whilst this end to uncertainty is most certainly welcomed, the short time scales have caused some concern. The time between the regulations being laid and implementation was only three weeks, giving installers very little time to prepare for any changes. The short time-frame also means that some customers may have accelerated their projects so Ofgem are likely to have seen a last-minute flood of applications before the new regulations come into play.
A key change to the domestic RHI is the introduction of heat demand limits which will prevent larger properties from taking a significant share of the RHI budget. We support the introduction of these limits as they will help to ensure that the scheme continues to be cost-effective. However, whilst this change will allow the scheme to support more installations, without assistance for those without access to finance to cover upfront costs, uptake may be limited to those with cash in the bank. The forecast could therefore be a decline in RHI applications leading to an underspend RHI budget.
Fuel poverty is most prevalent in areas off the gas grid, where most RHI installations take place. These households are often faced with few options but to use dirty, polluting, fossil fuel heating systems such as oil, putting them at risk of price fluctuations. Switching these homes to clean, renewable heating systems is a quick win in terms of reducing carbon emissions, lowering fuel bills and improving comfort. Renewables are the only real energy-secure, future-proof solution to the UK’s energy crisis but without assistance, many of those most in need simply cannot afford to switch and therefore are unable to benefit from cleaner and greener energy solutions.
Tweaking the scheme to allow consumers to access a proportion of the subsidy upfront could create a better incentive. Allowing those on lower incomes to install renewables whilst not involving a significant change in the scheme’s budgeting or operation. This could provide the step change needed to drive the uptake of renewable heating systems in homes across the UK.
We are finally seeing the clarity after of months of uncertainty, but there are still some improvements that could be made to make it easier for all homes to access renewable, clean heat.
Read Phil Hurley's Blog
NIBE Industrier AB has acquired 100% of the Grand Heater. The company will become part of the NIBE Element Business Area.
Grand Heater is the market leader for Electrical Tubular Elements in Thailand. The company was founded in 1990 in Bangkok. The main product groups are tubular element for the white goods sector, comfort sector and small appliances. Main customer groups are Japanese companies with established production in Thailand, for example Panasonic, Hitachi and Sharp.
This acquisition strengthens the position of NIBE Element in Asia and also establish creates another facility production for the Asian market outside of China.
The turnover of Grand Heater is approx. THB 130 millions (Euro 3,5 million). The number of employees is 120. The company will operate under the name Backer Grand Heater and the existing management will continue to manage the company in close cooperation with Backer HTS in China.
Backer Grand Heater will be consolidated in NIBE as of August 1, 2017
The Government’s announcement to end the sale of new petrol and diesel cars by 2040 has been hailed a significant milestone by many in the transport and energy sectors. But critics of the transition have warned that the switch to electric vehicles will ‘put unprecedented strain on the National Grid’.
Following the announcement, there has been a lot of speculation in the media regarding the effects of EVs on the energy system. There have been reports that this proposal could increase peak demand by 30GW (the same as 10 new nuclear power stations). But feedback from National Grid suggests their Future Energy Scenarios report, which I commented on in my previous blog, has been cited incorrectly and out of context by the media leading to exaggerated effects being reported. The Two Degrees scenario, which the National Grid see as the most probable outcome if this ambition is to be fulfilled, estimates an increase in peak demand by just 5GW. This scenario assumes that drivers will be using smart chargers which means that the chargers are able to optimise when the car is charged based on demand and time of use tariffs.
By 2040, it will not only be the transport system that is smart, our homes will also have to embrace smart technologies and could participate in demand side response. Heat pumps are already able to provide grid services by responding to real time prices and reducing peak demand. In Sweden, NIBE heat pumps automatically optimise to minimise bills in response to variable time of use tariffs. The Committee on Climate Change has highlighted the role of heat pumps as a low regret option, noting that they could provide demand side response when installed alongside storage. At the same time, the National Grid has found that together, electric vehicles and heat pumps could provide an annual average of 80% of projected frequency response requirement and could deliver £100 million of annual revenue to be shared between suppliers, aggregators and consumers.
Further support for the combined role of these two technologies can be found in other recent studies. For example, one study found that heat pump peaks occur in the morning around 7:00 - 8:00 compared to the national grid peak which occurs around 17:00 – 18:00; whilst electric vehicle charging is likely to occur during national grid peak times when drivers return home from work. Green Alliance says that the concern around demand is therefore not one of overall capacity, but a possibility of unexpected surges and additional demand during peak times. Heat pumps, controls and thermal storage could be used to decrease demand when EV charging is high and balance intermittent renewables. Other studies, in the Netherlands, have shown that if heat pumps and electric vehicles become popular, residential load shifting can almost completely flatten electricity loads, removing peaks and troughs.
The shift to electric vehicles is inevitable and we must embrace it; we must move away from polluting fossil fuels across power, transport and heat. Industry incumbents may resist this move initially but electric vehicles may in fact be in the final flip of the switch, which is needed to power up the role for heat pumps and other smart, low carbon heating solutions in our energy system.
Phil Hurley's Blog
“We’ve had a positive first half of 2017 with good growth in both sales and earnings. Despite the relatively large amount of political uncertainty in the world, NIBE has achieved good growth, both organically and through acquisitions. In addition to low interest rates, increased consumption and steadily increasing construction activity, the transition to a more sustainable social order is having positive effects for us”, says Gerteric Lindquist, CEO of NIBE.
“NIBE Climate Solutions is at the forefront with its broad, sustainable climate control product range for all types of properties, and is continually strengthening its market position. Major focus is being placed on integration of the most recently acquired companies, which still have lower operating margins than the business area in general, as well as adjustment of costs in the companies affected by the fact that subsidies for heat pumps have been discontinued in the US”.
“Operating margin and volume continue to develop well in the NIBE Element business area. With strategic acquisitions and good organic growth, NIBE Element continuously enhances its role as an international market leader.”
“The NIBE Stoves business area also continues to grow internationally and now has a good geographical balance with a unique opportunity to grow in Europe, North America and Australia.”
We have a strong product programme and a timely business philosophy that focuses on sustainability and energy efficiency. Even though it’s difficult to make predictions in the current business climate, we remain cautiously optimistic about 2017 thanks to stable profitability and good financial preparedness for acquisitions, says Gerteric Lindquist, CEO of NIBE.
Read Full Report
Countries across the world are signalling an end to the use of carbon intensive fossil fuels for heating and transport, with Norway being the latest country to increase the pressure on the oil industry by introducing a ban on the use of oil and paraffin for heating in all buildings from 2020. This combined with Norway’s pledge to ban the sale of fossil fuel cars by 2020, sets a high benchmark for other countries to follow.
The electric vehicle (EV) market is booming in Norway, EV sales have seen more than a 90% annual growth rate on average! This staggering shift in buying behaviours and consumer preferences shows that a clear Government vision and targeted policy can generate widespread and rapid change. Could this recent announcement initiate a similar step change in the heating industry?
The Environment Minister Vidar Helgesen thinks so, he has quite clearly stated that “those using fossil oil for heating must find other options by 2020,” and indicated that the legislation could be widened to include restrictions on the use of natural gas to heat buildings. This is a strong signal to industry and the public that Norway is committed to a cleaner and greener future and the markets have responded positively.
It is not just Norway making clear statements on the use of fossil fuels, on 6th July France announced that as part of its five-year plan to fulfil commitments under the Paris Agreement, it would ban all petrol and diesel vehicles by 2040 with the aim for the country to be carbon neutral by 2050. Germany and Belgium have also signalled a ban on all petrol and diesel cars, whilst Sweden has announced plans to become carbon neutral by 2045. The Netherlands has focused its efforts on moving away from natural gas as part of its pledge to reduce emissions by 80% by 2050. With these announcements and surely more to come across Europe, the future of fossil fuels is looking bleak.
In the UK, we are waiting for the Government to publish a Clean Growth Plan which will outline how the government plans to deliver carbon emissions reductions to meet the fourth and fifth carbon budgets. After a year of uncertainty and political instability, the plan is now expected in Autumn 2017. Claire Perry, the new Minister of State at BEIS, has stated that the plan must be ‘ambitious, robust and clear,’ and declared it a high priority. NIBE welcomes this commitment and hopes that the plan will provide a long-term, ambitious pathway to lower carbon emissions from our buildings.
As highlighted in the National Grid’s Future Energy Scenarios report, there is no one solution for the heating dilemma, we need a range of technologies to ensure a secure, low carbon energy mix. But the report states that to meet the two-degree scenario, heat pump deployment will need to increase substantially. The Clean Growth Plan must pave the way for the inevitable transition away from oil towards efficient, low carbon heating technologies or the UK could be left behind as other countries around the world embrace renewables. The solutions exist and industry is equipped to make the switch, but the right policy frameworks and government targets are needed to drive the transition.
The UK is committed to developing domestic green energy industries and tackling climate change. Heat pumps are one of a range of technologies that can substantially lower carbon and NOx emissions from UK buildings. Indeed with buildings becoming more energy efficient, the grid becoming increasingly powered by renewables, and the UK looking to support domestic energy industries and supply – the case for heat pump deployment is becoming stronger, especially in off-grid areas and new-build properties.
This report provides policy lessons from European markets that have successfully created the conditions for the deployment of heat pumps, and builds policy recommendations.
The UK Government in its Heat in Buildings consultation published in 2016 expressed its desire to ‘reduce the use of coal and oil in buildings, and how best to promote a transition away from high fossil fuel heating over the coming decades’. The consultation also highlighted the need to ‘consider which kind of policy interventions could support this change’.
NIBE firmly supports the Government’s efforts to develop policy to phase out coal and oil in buildings. The place to start is off gas grid buildings, a market dominated by carbon intensive fuels such as heating oil and subjected to higher and often volatile energy prices. There are some barriers for consumers looking to make the switch and Government has a role to play in enabling the transition to sustainable low carbon heating technologies like heat pumps.
All European markets that have successfully unlocked the potential of heat pumps, like Sweden and Austria, have taxed heating oil in line with its high carbon content and promoted the use of heat pumps where it makes most sense like new build and off gas grid properties. More recently, Norway announced that it will prohibit the use of heating oil by 2020.
The UK should also push forward in its efforts for decarbonisation in the off-gas grid markets and resist calls to maintain the status quo such as the recent report by OFTEC (the trade association for the oil heating industry). The report sets out OFTEC’s vision for the future of off grid heating, recommending the delivery of policy incentives to encourage the replacement of existing oil boilers with more efficient oil fuelled models while suggesting that at some point in the future biofuels will replace heating oil. But boilers installed today will continue to emit carbon over their lifetime and the development of mass market biofuel is uncertain.
The report also argues that technologies such as heat pumps are not cost effective or market ready for widespread deployment. NIBE stress that the Government should not be encouraging homeowners and businesses to install oil boilers, it goes against the Government’s emissions reduction targets and efforts to phase out oil and coal use, and promotes the use of an unsustainable and polluting limited resource.
The UK must be more ambitious than this. The Committee on Climate Change, in its 2017 Report to Parliament, released on 29th June, emphasised the need to significantly increase the delivery of heat pumps in cost effective locations. They remain the leading low carbon option for homes off the gas grid and are also one of the main options for reducing emissions from heating in buildings on the gas grid. The Committee estimates that at least 2.5 million heat pumps should be installed by 2030 in our homes if we are to meet the fifth carbon budget. If we are to move to a cleaner and greener future, coal and oil must be replaced by energy sources that do not cause irreversible damage to our planet. Renewables are the only energy secure, future proof solution. The UK needs to look at the policy levers used by successful Scandinavian countries to phase out oil in off gas grid buildings by 2025. Heat pumps are a proven low carbon solution and they are only bound to become more cost efficient for decarbonisation purposes as installation costs reduce with scale and the electricity grid carbon intensity steeply declines. On the other hand, as the future availability of biofuel in the UK market for domestic heating remains speculative.
NIBE UK Managing Director Phil Hurley commented:
‘Replacing oil with oil will not address the higher carbon and air pollution emissions from these heating systems in the off-grid market, instead these systems will continue to spout out pollution for the next 20 years. In off-grid areas there are sustainable alternatives such as heat pumps which provide clean, green energy. NIBE will continue working in close collaboration with policy stakeholders to realise the potential of heat pumps in the UK and develop policy that reflects their benefits. As part of this effort, NIBE will develop more detailed analysis on appreciating the risks of promoting an approach that maintains the status quo to heating off gas grid buildings.’
NIBE are one of the UK’s leading manufacturers of heat pumps and the market leading heat pump manufacturer in Europe. NIBE also develops a wide range of other renewable heating technologies. NIBE focuses solely on the renewable heating market in accordance with its principles of offering low carbon, efficient products that deliver energy for life. With a growth model that focuses on marketing directly to the consumer and collaborating with specialist installers, NIBE brings unique insight into the UK renewable heat market as well as unrivalled understanding on what has worked in other European renewable heat markets.
The votes have been counted, and the results are coming in. Whilst there remains some uncertainty about the characteristics of the new government, what we do know is that all the major parties agreed to tackle climate change and high energy costs. We, at NIBE, will welcome the opportunity to work with the political parties to develop solutions that drive innovation, grow the market and ensure that homes are warm, comfortable and affordable to heat.
Both the Conservatives and Labour in their election manifestos spoke about their wish to deliver energy that is reliable and affordable, and that the UK should continue to meet its global commitments on climate change. Renewables are the only real energy-secure, future-proof solution to the meeting the climate change targets.
A week before the General Election, Donald Trump announced that the USA would be pulling out of the Paris Agreement on Climate Change. The announcement was not unexpected but still came as a shock to those of us committed to tackling climate change and the transition to a low carbon economy. Addressing climate change is the greatest challenge the world faces, we have a social duty to work together to reduce our impact on the environment and a moral obligation to ensure that the well-being of future generations is not harmed by what we do today.
Whilst the USA moved away from the international agreement, Theresa May, Jeremy Corbyn and other leading politicians stressed their commitment to the Paris Accord and criticised the decision. We must not let Trump’s choice change our stance on climate change, if anything we should increase our efforts to tackle it and shout louder to bring international stakeholders together.
The UK has been and must continue to be a world leader in global action against climate change, but at home, we have much more to do to reduce our impact on our environment. Emissions from homes and non-domestic buildings account for 17% of the UK’s direct greenhouse gas emissions. Efforts by successive governments have failed to encourage significant penetration of low carbon heating technologies in buildings, as opposed to greater success in the fields of electricity and belatedly transport.
As the Government will focus on delivering Brexit, a British Industrial Strategy and plan to reduce emissions, the time has never been better to put a stop to the combustion of fossil fuels in off-grid homes and encourage a greater penetration of heat pumps in the UK. By using local natural power, we can build a more sustainable future for our children and grandchildren.
The UK has managed to significantly reduce its emissions from the power sector as more renewables come onto the grid. This means that electrically powered heat pumps have even greater carbon reduction potential. Using the Committee on Climate Change’s projections for 2027, heat pumps will produce emissions which are 90% lower than oil boilers. This is why oil boilers should not be being installed in our homes; they are unsustainable, polluting and carbon intensive.
NIBE are keen to work with any new government to develop policies that support the deployment of affordable, low carbon heating solutions for homes located off the gas grid. These homes are subjected to higher and often volatile energy prices which is a particular concern for those living in fuel poverty. Many parties have put forward an ambition for the UK to have lower energy costs - we welcome this, however energy bill tariff caps are not the way to achieve lower energy costs. Reducing energy demand, changing consumer behaviours and fuel switching is the only way to deliver lower energy costs today and provide a cleaner, greener future!
Phil Hurley's Blog
Air quality is a hot topic and featured in the main party manifestos published last week. But dangerous emissions from heating have not been given the attention it deserves. Last year ClientEarth successfully took the UK Government to the High Court over what the court ruled to be illegally poor plans to tackle the country’s current air quality crisis. Levels of NOx in the air have regularly exceeded safe and legal levels in the UK, and the court ruled that the Government should develop a new plan to tackle these issues “as quickly as possible.”  After some delay, this plan was published on 5th May 2017. With 40,000 UK deaths linked to air pollution, and related health problems costing the UK economy more than £20 billion every year, the Government must take radical steps to tackle this issue.
The Government’s plan focused solely on transport and whilst road transport accounts for 34% of UK NOx emissions, the remaining two-thirds come from other sources including domestic heating. It is essential that these sources are also tackled. An obvious solution is the replacement of oil boilers with low emission, future-proofed heating systems.
There are 1.1 million oil boilers in the UK, together they emit 4,540 tonnes of NOx per year. This is equivalent to the emissions from over 2.3 million Euro 5 (2009 standard) diesel cars, driving a typical annual mileage. This suggests that running an oil boiler is equivalent to running two additional diesel cars per household!
One of the key proposals from the Air Quality Plan is a diesel car scrappage scheme. Whilst the Government focuses on taking diesel vehicles off the road, they could additionally be helping off-grid households to switch away from oil, providing similar benefits. There is much crossover between the need to support users of old diesel cars to buy new low-emission cars, and off-grid homes saddled with old, inefficient and dirty oil boilers. The Government can help these households make the necessary switch from a polluting fossil fuel technology, to a modern low pollution heating system. Heat pumps offer consumers renewable and reliable heat without the high carbon and NOx emissions associated with the use of oil. Rolling out an oil boiler scrappage scheme across the UK would provide that support.
Boilers installed today will continue to spout pollution for the next 20 years until they are replaced. Using the Government’s numbers on the costs of NOx emissions to society (health costs etc.), the emissions from oil boilers have a social cost of more than £66 million a year (if we monetise the CO2 impact of heating oil this figure would be even higher, but that will be covered in one of my next blogs). More needs to be done to encourage homeowners to replace their systems before they reach the end of their life and install efficient, low emission heating systems like heat pumps. Not only will this reduce air pollution, improve well-being and health, it will also reduce carbon emissions thus contributing to tackling climate change. The truth is, renewables are the only real energy-secure, future-proof solution to the UK’s energy crisis.
If the Government is committed to addressing air pollution, it must also consider the full impact of fossil-fuel based heating. Introducing a boiler scrappage scheme to install ultra-efficient renewable technology like heat pumps alongside the diesel car scrappage scheme, will encourage homeowners to change their inefficient, polluting boilers now rather than allowing them to continue to pollute the environment, damage health and contribute towards climate change over the coming years.
 Courts and Tribunal Judiciary (2016) https://www.judiciary.gov.uk/judgments/clientearth-v-secretary-of-state-for-the-environment-food-and-rural-affairs/
 Royal College of Physicians (2016) https://www.rcplondon.ac.uk/projects/outputs/every-breath-we-take-lifelong-impact-air-pollution
 DEFRA (2017) https://www.gov.uk/government/news/new-air-quality-plan-published-for-consultation
 DEFRA (2015) https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/460398/air-quality-econanalysis-damagecost.pdf
NIBE Industrier AB has acquired 80% of the shares in HT S.p.A., Susegana, Italy (“HT”). The company will become part of the NIBE Element business area.
HT has its headquarters in Susegana, Italy, and has produced highly engineered heating solutions for heating, ventilation and air conditioning, commercial food products, packaging and other industrial applications since 1978. HT’s heating product range consists of cartridge heaters, PTC heaters, strip heaters and heating systems.
HT has one production facility in Italy and two in Romania. Revenue in 2016 amounted to approx. EUR 23 million with an operating margin of 14%. The company has approx. 330 employees.
“The acquisition of HT adds another well-known brand to our European element business providing cost synergies and commercial advantages to the NIBE Group. Their market and technical position and customer base will provide yet another platform for profitable growth,” says Gerteric Lindquist, CEO of NIBE Industrier AB.
The company will continue to run its operations under the present management of Mr. Costante Dall´Anese and Mr. Veniero Peroni. Both Mr. Dall´Anese and Mr. Peroni will remain part owners of HT. NIBE has the option to eventually acquire the remaining 20% of HT S.p.A.
HT will be consolidated into the NIBE Group as from 1 May 2017.
Hello “It´s in our nature”! NIBE Energy Systems to launch new products and a new brand promise at ISH 2017.
The ISH exhibition held in Frankfurt am Main is the world’s largest showcase for energy efficient heating, air-conditioning technology and renewable energies. For the 9th time in a row, NIBE Energy Systems will be there –this year loaded with new products, the largest booth ever and a new brand statement, “It´s in our nature”. A message that salutes the power of nature.
At ISH in Frankfurt am Main, 14-18 March, NIBE Energy Systems will be presenting a broad product portfolio that encompasses heating/cooling, hot water and ventilation. NIBE Energy Systems will be showcasing a strong, wide and smart range of products that meet the expectations of today and tomorrow. Alongside the product range, NIBE Energy Systems will also be presenting the latest in inverter-controlled heat pumps, ground source heat pumps, exhaust air heat pumps and air/water heat pumps and championing the NIBE F2120 with its groundbreaking efficiency and SCOP of over 5.0. Visit our stand and find out about all our new products, such as the NIBE F1355-28, NIBE AMS 10-6,NIBE F2040-6 and NIBE F2120.
“As a premium brand in the market, quality and efficiency are guiding principles for NIBE Energy Systems. At ISH we are excited to be presenting innovative progress in heating solutions as well as a clear and important message. Energy-efficient, innovative and user-friendly products is in our nature, and we are proud to be meeting visitors with great solutions for a greener world and perfect indoor climate. In other words, maximum comfort and minimum carbon footprint,” says Kjell Ekermo, Director, NIBE Climate Solutions.
By using a climate system built on self-learning smart technology, users can easily minimise energy consumption, without having to sacrifice comfort.
At the same time, the importance of reducing carbon dioxide emissions is widely recognised. NIBE Energy Systems has incorporated this into its development and new brand message to emphasise nature’s role in human lives.
“It´s in our nature” means that we recognise the power of nature. When we develop our products, we ensure that they are equipped as much as possible to run on natural power, no matter what the outdoor climate conditions. NIBE Energy Systems converts this power into a perfect indoor climate. Naturally, with the least possible environmental impact,”says Magnus Axelsson, Market Communication Manager, NIBE Energy Systems.
At ISH 2017, 14-18 March, 2,500 exhibitors and 200,000 visitors will be teaming up to learn about the innovative future of heating and cooling products and renewable energy solutions. NIBE Energy Systems has attended ISH since 2001 and, in 2017, the stand area will have grown to 650 square metres. You can find NIBE in Hall 8.0, stand D65.
“2016 was a strong year for NIBE with a considerable increase in both sales and profit. The year was distinguished by an intense period of acquisitions, primarily in North America, stable organic growth and a successful preferential rights issue, together ensuring good future growth,” said Gerteric Lindquist, MD and Group CEO of NIBE
NIBE reports a significant increase in both sales and profit in the company’s 2016 year-end report.
“2016 was a strong year for NIBE with a considerable increase in both sales and profit. The year was distinguished by an intense period of acquisitions, primarily in North America, stable organic growth and a successful preferential rights issue, together ensuring good future growth,” said Gerteric Lindquist, MD and Group CEO of NIBE.
“The sales target of SEK 20 billion by 2020 now seems within reach – when the acquired companies are included calculated on a rolling 12-month basis, the Group’s sales amount to more than SEK 17 billion. The acquisition of Enertech Group was approved by the Swedish Competition Authority and it will be consolidated as of 1 March 2017.”
“The recent acquisitions strengthen NIBE Climate Solutions’ position and it is now one of the leading suppliers of sustainable end-to-end solutions in climate control in both Europe and North America.”
“Thanks to long-term, passionate, methodical efforts, the NIBE Element business area has now definitely exceeded a 10% operating margin, and by a good margin.”
“The NIBE Stoves business area has also passed a milestone. With the partial acquisition of Canadian company Fireplace International Ltd, it now has a solid platform in North America and Australia.”
“We have a timely product programme and business philosophy. Profitability is stable and we’re well prepared for additional acquisitions. In a world where it is difficult to make predictions, we remain cautiously optimistic about 2017.”
NIBE Industrier AB has acquired 50% of the shares in heat pump company CGC Group of Companies Inc. in Ontario, Canada, with an option to acquire the remaining 50% of the shares no later than spring 2022.
CGC was founded in 1995 and is headquartered in Mississauga, just outside Toronto, with its manufacturing facility in the nearby town of Fergus.
The company has about 80 employees, sales of approximately SEK 120 million (CAD 18 million) and an operating margin of 19%. CGC mainly targets commercial properties under the well known brands Bulldog Heat Pump, Compax and Varipak.“We now have an additional platform for heat pumps for commercial properties in North America and see good growth opportunities both in Canada and the US,” says Gerteric Lindquist, CEO of NIBE Industrier.
It’s really inspiring to continue the work of developing CGC together with the current owners and founders, Bill Browne and Bob Rutherford. Together they have more than 70 years of experience in the heat pump industry and they will continue to lead the company in strict accordance with our usual acquisition model.”CGC will be included in the NIBE Climate Solutions business area and will be consolidated from 1 February 2017.
The purchase price is not specified because the acquired business will only constitute a small part of the NIBE Group.
For more information: Benny Torstensson, NIBE Industrier AB: +46 433-73 070NIBE Industrier AB is required to disclose the information in this press release under the Market Abuse Regulation and NASDAQ Stockholm’s rules and regulations for issuers. The information was submitted by Benny Torstensson for publication on February 13, 2017 at 08.00.