Air Conditioning & Air-to-Air Heat Pumps
Firstly, apologies for my absence on Substack – I haven’t posted for two months as life has been a little busy. The combination of getting married and starting a new job didn’t leave many hours in the day for trawling through Companies House accounts!
The new job and career change has been amazing – I am working on energy policy at the Centre for British Progress, a pro-growth think tank. It’s been great to get back to working as part of a team, especially with such intelligent and thoughtful colleagues.
My first piece of work for CBP looked at air conditioning and air-to-air heat pumps in the UK – which you can read here. This short post will summarise the argument, focussing on the energy specific aspects. I would also recommend Sam Dumitriu’s work on this topic – as it goes into excellent detail on how cooling interacts with new build housing regulations in the UK.
I am trying to analyse energy in the UK to help improve policy. My writing reflects my personal views. None of the content should be construed as investment advice. I have done my best to ensure that the content below is accurate – but I am human and will make mistakes – if you spot any, please let me know and I shall update as appropriate.
I’m going to start with an image of an air conditioning unit that I photographed in a café in London. The setup is relatively simple – this is one of multiple indoor ‘split’ units that are all linked to an air source heat pump outside the building. What is quite clever is that this unit can provide both cooling AND heating functionality.
The term ‘air source heat pump’ captures two different technology groups:
Air-to-water heat pump – when an air source heat pump heats the water in a radiator or hot water system. (Known as a ‘hydronic’ or ‘wet’ heating system) This is the much more common technology for UK residential installations.
Air-to-air heat pump – when an air source heat pump is used to heat or cool air directly (as per my café example above)
Leaving my newfound interest in heating systems to one side, there were two key arguments in my research piece.
The UK shouldn’t block air conditioning adoption due to concerns over energy use or climate impact
Air-to-air heat pumps have lots of interesting advantages over air-to-water and regulatory barriers should be lifted
Air Conditioning and Energy Use (The bullet point version)
Air conditioning makes use of spare grid capacity in summer
Average daily and peak daily electricity demand in GB peaks in winter not summer
This seasonality will only increase as we electrify heating systems. If you have to build more grid for a winter peak, you should have spare capacity for air conditioning in summer
Increased electricity use isn’t a problem if it comes from low carbon sources:
Solar generation peaks in the summer months and there is a strong correlation between max daily temperature and GB solar generation
During the summer, solar emerges around 5:30am, peaks around 1pm and disappears by about 8:30pm. This is perfect for air con use in schools, shops and offices
Domestic air conditioning isn’t quite as well suited in terms of timings – use is likely to peak in the evening when temperatures max out (c. 5pm) and people return from work/school. Demand will probably run into the night on the hottest days of the year
There are plenty of solutions for this – pre-cooling homes, more nuclear on the grid, storage technologies, and aligning solar panels to better capture evening sun
I think there are a couple of legitimate pushbacks to this argument - firstly, some transmission and distribution equipment - e.g. transformers - may suffer from lower rated capacity in higher temperatures. Secondly there is some evidence that very widespread air conditioning adoption can contribute to the urban heat island effect, especially at night time.1
Advantages of air-to-air heat pumps over air-to-water:
Providing cooling as well as heating – technically air-to-water tech can also do this, but there are issues with condensation on radiators
Humidity control and air filtration – a useful feature that could help with mould/damp
Capital costs – the average air-to-water supply and installation seems to cost about £13k according to the MCS.2 A small air-to-air system could cost £3k
Room space recovery – no radiators taking up space. This might explain the adoption in small shops and cafes
Plenty of installers – DESNZ estimate there are only 7,000 qualified installers for air-to-water heat pumps vs c. 50,000 for air-to-air – essentially you have access to the skill set of the entire commercial air conditioning market3
There are some disadvantages too – capital costs are higher than the c. £3000 figure if you also need a hot water unit, they are noisier than radiators based systems and greater volumes of refrigerant are used.
Honestly, I don’t know what UK demand for air-to-air heat pumps might be – my best guess is that they might see decent adoption in smaller flats or as a cheap replacement option for properties with expensive resistive electrical heating systems.
Air-to-air heat pump are quite popular elsewhere – they were the best-selling heat pump category in Europe from 2018-2022 for domestic settings.4 The key point isn’t that the tech is necessarily ‘better’ – just that consumer preferences will vary and government support should be more technologically neutral than it currently is.
A few of the key barriers to air-to-air adoption are listed below:
Boiler Upgrade Scheme - £7,500 grant available but only if the medium used to deliver heat is a liquid (making air-to-air ineligible)5
Energy Company Obligation – air-to-air not eligible6
Clean Heat Market Mechanism – air-to-air not eligible7
In fairness there is a live consultation regarding the boiler upgrade scheme that is looking at this issue. But it seems odd to me that so many regulations exclude the much lower cost option.
Carrots not sticks
I think there is a more general point here. Climate policy is becoming more contentious and intrusive into people’s lives. Risk of political backlash is real – if you want to drive adoption of electrification technologies to cut emissions, why not work WITH the grain of human behaviour - and start allowing people to realise benefits and not just costs. Some examples:
EV’s – home charging and rapid acceleration
Cooking – new stoves with amazing temperature controls (though v. expensive…)
Heat pumps – allowing both cooling and heating functionality
Those in the energy space could learn a lot from the marketing industry – I can think of no-one better than Rory Sutherland to explain!
Thanks for reading!
Salamanca, Francisco, et al. "Anthropogenic heating of the urban environment due to air conditioning." Journal of Geophysical Research: Atmospheres, vol. 119, no. 10, 2014, pp. 5949-5965
Page 6: Energy Innovation Research Office (EIRO): Air-to-Air Heat Pumps Literature Review - Department for Energy Security and Net Zero
Page 36: Energy Innovation Research Office (EIRO): Air-to-Air Heat Pumps Literature Review - Department for Energy Security and Net Zero
Page 10: Boiler Upgrade Scheme Consultation
Page 59: Boiler Upgrade Scheme Consultation
Page 59: Boiler Upgrade Scheme Consultation
Congratulations on the new role and your marriage!