Yicai Global: Chinese home appliance firms scramble to meet heat pump demand

(JW Insights) May 15 -- Chinese home appliance makers, including Gree, Midea, and Hisense, are stepping up their heat pump businesses to meet surging demand against the backdrop of widespread efforts to save energy and cut carbon dioxide emissions, as well as the European energy crisis, Yicai Global reported on May 12.

Midea Building Technologies, a unit of Foshan-based Midea Group, launched a green heating solution that uses heat pump technology on May 11. It will cover household, residential, and village heating and that of industrial parks and commercial complexes.

Heat pumps are energy-saving devices that warm indoor spaces by taking heat from the air outside. Their carbon emissions can be 60 percent to 80 percent lower than coal-fired boilers.

As a core technology of clean energy transition, heat pumps can even be ranked alongside wind power, photovoltaic, automotive, and energy storage batteries, industry insiders told Yicai Global. Speeding up electrification and clean heating technologies have become the global standard way to decarbonize buildings.

Zhuhai-based Gree improved the annual energy efficiency of its air source heat pumps last year and expanded their application to extremely cold areas. Hisense said the acceleration of Europe's shift toward energy independence will likely further benefit China's heat pump exports, according to the Qingdao-based firm's 2022 earnings report.

Because of the high technical and experience barriers in the industry, the production capacity of the heat pump sector is focused in leading firms.

China accounted for nearly 60 percent of global heat pump production in 2020, data from the China Energy Conservation Association showed. There were more than 500 Chinese heat pump firms that year, it added.

Heat pumps can achieve some 15 percent of China's carbon emissions goal, according to CECA Chairman Jiang Yi, who added that this is the key to realizing a zero-carbon energy transition.

The global market for heat pumps could top more than RMB2 trillion ($287.8 billion) in 2030, with 26 percent compound annual growth in the European market from 2021 to 2030, Soochow Securities said.

To achieve the REPowerEU, the European Commission's plan to save energy, produce clean energy, and diversify the European Union's energy supplies in the wake of the Russia-Ukraine conflict, the number of heat pumps in the European market needs to jump to 60 million units from 17 million by 2030, the European Heat Pump Association predicted, said the Yicai Global report.

(Yuan XY)