Increasing importance of heat pumps
In recent years, the use of heat pumps to heat buildings has increased significantly. Heat pumps are an efficient and environmentally friendly alternative to conventional heating systems because they use renewable energy sources such as air, water or geothermal energy to heat buildings. In December 2020, the German government decided in the coalition agreement that no oil or gas heating systems may be installed in new buildings from 2026. Instead, renewable energy sources such as heat pumps should be used. This decision is an important step toward climate protection and will help reduce CO2 emissions in the building sector.
Using heat pumps to heat buildings has many advantages. For one thing, heat pumps are very efficient. They can get up to 75% of the energy they need from renewable sources such as ambient air or the earth. By comparison, gas and oil heating systems are about 90% efficient, but use fossil fuels and produce CO2 emissions. Heat pumps are therefore not only more environmentally friendly, but also more economical. Thus, at a time of climate change, heat pumps can be seen as the future of heating. However, the demand for advice on heat pumps has also increased significantly with Russia's war against Ukraine and the subsequent energy crisis in order not to be dependent on Russian gas.
New building energy law draft since the end of February guarantees opportunities for heat pumps manufacturers?
Since the end of February there is a new draft of the building energy law. In the draft amendment to the law, the coalition has called for every new heating system to be powered by at least 65% renewable energy from 2024. This would mean that many property owners would have to switch to alternative types of heating such as heat pumps, district heating or biomass boilers in the next few years instead of installing oil and gas heating systems. Demand for heat pumps is already high, with a goal of installing six million heat pumps by 2030, up from the current 1.4 million. This year, 230,000 new heat pumps are expected to be installed, up from only about 150,000 last year. To meet climate targets, Germany needs to install 500,000 new alternative heating systems each year- so the calculation of experts. Currently, the waiting time for heat pumps is up to 18 months. To overcome the bottleneck, there are plans to expand production capacity in Germany and Europe to meet the growing demand for renewable heating systems.
Challenges and opportunities for heat pump manufacturers
Legal regulations in the renewable energy sector can have an impact on heat pump manufacturers. These could include, for example, new requirements for energy efficiency, carbon footprint, or the use of refrigerants. In any case, heat pump manufacturers should closely monitor developments in the legislation and, if necessary, adapt their products and business practices to comply with the legal requirements.
Stock and import requirements for heat pumps
Increased demand for heat pumps in recent years due to the growing importance of renewable energy and increasing energy efficiency requirements in building systems has led to higher inventory and import requirements of heat pumps to meet the demand in the market.
Most heat pumps are produced in Asia, especially in China. However, the imports of heat pumps to Europe, especially to Germany, are also from other countries such as Japan, South Korea and the USA. Therefore it is a fact that the import demand of heat pumps in Europe will remain high in the future.
However, it is also possible that supply chains could change due to trade restrictions, political developments or other factors, and that this could affect the stock and import requirements for heat pumps.
Therefore, it is possible that there is a high inventory of heat pumps in warehouses even though there is a need for further imports. One reason for this could be that there is insufficient stock to meet current customer demand or that certain heat pump models are not available due to production bottlenecks or delivery delays. In this case, import requirements would be necessary to fill the gap and meet customer needs.
What can logistics do to help heat pump manufacturers meet the challenges and opportunities?
Efficient logistics processes are particularly important when inventory levels are high: efficient warehousing and logistics can help reduce heat pump inventory. Through better planning and control of the supply chain, orders can be processed more quickly, resulting in faster sales and thus creating available storage space. In particular, this is where the benefits of decentralized intermediate and reserve warehouses come into play. Some possible benefits are:
- Improving delivery times: By using decentralized intermediate and reserve storage facilities, heat pumps can be stored closer to customers. This can help ensure that deliveries are faster and more reliable.
- Reducing storage costs: using decentralized intermediate and reserve storage facilities can reduce the need for central warehouses, which can lead to savings in storage costs.
- Reduction of transportation costs: If intermediate and reserve warehouses are located closer to the customer, transportation costs can be reduced. This is especially beneficial when customers live in remote areas or in areas with high traffic.
- Flexibility: Decentralized intermediate and reserve storage facilities can allow companies to respond more flexibly to changes in customer demand. If a particular region needs more heat pumps, they can be quickly provided from one of the decentralized warehouses.
- Supply chain optimization: Warehouses positioned closer to production or customers also increase the flexibility of your operations by making the supply chain more resilient, for example in the event of unexpected supply chain bottlenecks.
Warespace as a logistics network for Europe
- With Warespace, having only one contact for handling all logistics processes. This massively simplifies the management of the supply chain and logistics service providers.
- Warespace has an inventory management system- the aWARE system, with which your inventory can be optimized.
- Warespace handles route planning together with CargoCast and Cargonative, reducing transportation costs and shortening delivery times.
- Warespace ensures collaboration with rules, standards and quality commitments.
At Warespace, we have a decentralized warehouse network through our logistics network - consisting of excellent logistics service providers from all over Germany - which can be easily controlled with just one dashboard - the aWARE system.