General > General Technical Chat
What is the real story around heat pumps?
zilp:
--- Quote from: Miyuki on February 22, 2024, 06:26:25 am ---Current builds will be profitable in 30-40 year horizont (if there won't be any problems). So no investor will go into this because it is beyond their lifetime
--- End quote ---
That is not how investment works.
For one, there are plenty of investors where 30-40 years is not in any way beyond their lifetime. Think insurance companies, pension funds, endowments, that sort of thing. Plenty of investors who wouldn't care if they couldn't liquidate some position for half a century, as long as the returns are worth it.
But also, that is what the secondary securities markets are for. If the profits are as certain as has been suggested, then you can just hold the shares or bonds and then sell them after 30 years or whatever for the time value of the future profits, thus getting your part of the profits before they have been realized.
--- Quote from: Miyuki on February 22, 2024, 06:26:25 am ---and when you have investment opportunities with orders of magnitude higher returns. And even after that 30-40 years, those profits are not that great.
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And that is the point. It's actually risky. There is absolutely no guarantee that the electricity would be competitive with other sources, and quite a few reasons to think that it wouldn't. And if it isn't, then throwing a pile of tax money at it is just a waste of money. And that especially so given that even if we decided to build a ton of nuclear power plants, they wouldn't be online for at least another 10 years. A lot of solar and wind capacity can be built in ten years, and any generator that is completed pretty much immediately starts saving CO2, rather than in ten years. And also, wind and solar are proven technologies with economies of scale, where the time to compltion is very reliably predictable, as far as the technical side is concerned.
Zero999:
--- Quote from: tom66 on February 21, 2024, 11:12:51 pm ---
--- Quote from: Zero999 on February 21, 2024, 06:27:05 pm ---
--- Quote from: tom66 on February 21, 2024, 04:54:46 pm ---
--- Quote from: Zero999 on February 21, 2024, 04:04:38 pm ---Your figures for an electric heat pump are wildly optimistic because you used the seasonal average of 350%, when you should use the COP, when it's going to be working hardest and consuming the most power, which will be much lower.
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A heat pump may drop in efficiency as load increases and temperature falls, but so does a boiler. The headline efficiency of 85-90% is only achieved at the point where the return water is below 40C. Once you demand higher load from a boiler and need a flow of 70-75C, efficiency falls as far down as 70%. Meanwhile a heat pump will still be achieving a COP around 300%.
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How does the efficiency of a gas boiler drop with temperature? The reverse is true because more heat is extracted from the water being pumped through the radiators. It's more efficient for a gas boiler to heat the water from 25°C to 75°C, than it is for it to heat from 55°C to 75°C. The opposite is true for heat pumps, which need the water to be as lower temperature as possible, hence large pipes and massive radiators, and the COP drops, with the outside temperature.
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Unfortunately, it does. Because condensing boilers don't condense when the return temperature is above 45-50C (roughly). Typically the radiator loop on your system might lose 20-25C between flow and return, but if your radiators are sized so that it can only be properly heated when the flow output temperature is >60C then it will suffer from reduced efficiency in cold weather. This is currently the case for our house, and it's sadly very common as heating engineers aren't physicists, they just know that they need so many kW per m^2 so install the smallest radiators they can get away with.
When a boiler doesn't condense, the exhaust ends up with plenty of waste heat in it, which isn't heating your property. Combi boilers also do not condense when providing hot water, as there is no return path.
No such issue occurs for a boiler that is non-condensing, those are rare (especially today) and just generally have all-round bad efficiency.
--- Quote from: Zero999 on February 21, 2024, 06:27:05 pm ---I question your figure of a COP of 300%. I only use my heating when it's properly cold. It's been mild for the last week or so and my gas boiler has sat idle. 300% seems optimistic, given it'll get used when the temperature outside is close to or below freezing. Even then a COP of 300% is no good, unless the price of electricity were to fall significantly.
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A property in the UK will only be approved for the grant when a COP of at least 280% is achieved. Octopus only install systems >330% COP. One can surmise from this is most systems installed under the MCS scheme will have a COP of 300% or above. Octopus are the largest installer of these systems.
You are not the only user of heating systems so I couldn't comment on whether your scenario is going to achieve worse efficiency or not... but it's probably not relevant to the overall economics of heat pumps, most around here use their heating for at least 4-5 months of the year. It's pretty easy to see the boiler vents on a cold day after all.
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Okay, I accept those figures, but they still don't make economic sense for me. It just doesn't add up at the moment.
--- Quote from: Miyuki on February 22, 2024, 06:26:25 am ---Nuclear power has a big problem, you have those same crazy dudes glued to the road also protesting against nuclear.
And as there is no economy of scale nowadays, the cost is enormous.
Current builds will be profitable in 30-40 year horizont (if there won't be any problems). So no investor will go into this because it is beyond their lifetime and when you have investment opportunities with orders of magnitude higher returns. And even after that 30-40 years, those profits are not that great.
And even governments are reluctant because it is controversial, because of those factors.
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There are also smaller nuclear reactors which are cheaper to build. I believe Rolls Royce are currently developing modular units.
tom66:
--- Quote from: zilp on February 22, 2024, 07:44:02 pm ---
--- Quote from: Miyuki on February 22, 2024, 06:26:25 am ---Current builds will be profitable in 30-40 year horizont (if there won't be any problems). So no investor will go into this because it is beyond their lifetime
--- End quote ---
That is not how investment works.
For one, there are plenty of investors where 30-40 years is not in any way beyond their lifetime. Think insurance companies, pension funds, endowments, that sort of thing. Plenty of investors who wouldn't care if they couldn't liquidate some position for half a century, as long as the returns are worth it.
But also, that is what the secondary securities markets are for. If the profits are as certain as has been suggested, then you can just hold the shares or bonds and then sell them after 30 years or whatever for the time value of the future profits, thus getting your part of the profits before they have been realized.
--- End quote ---
Indeed, only 10 years since the UK paid off its last undated bonds, some of which go back to the 1850s.
https://www.gov.uk/government/news/repayment-of-26-billion-historical-debt-to-be-completed-by-government
There are public-private financing schemes on infrastructure which have very long payoff times. M6toll in the UK was built on a 53 year concession: a private company paid to build it, with the right to take tolls on it for the period of the contract (whilst maintaining it), and the road then returns to the government upon the end of contract.
The idea that investors are nervous about 30-40 year payback times is nonsense, providing the return is reasonably guaranteed, they love it.
tom66:
--- Quote from: Zero999 on February 22, 2024, 09:14:08 pm ---Okay, I accept those figures, but they still don't make economic sense for me. It just doesn't add up at the moment.
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As I said... I don't think they add up either, so I'm not quite sure who you're arguing against! The problem is the cost savings for heat pumps are maybe 10-20% in the optimal case, and 0% or even negative in the suboptimal case. The savings need to be something like 50% with say a 10% spread to make them appealing to the masses. That might happen eventually, especially if efficiencies increase and electricity costs fall as natural gas prices rise, but it's not the case today.
However, if you are building a new home, and have the opportunity to install larger radiators, underfloor heating and adequate insulation (as are often the requirements nowadays anyway) I think you would be foolish to install anything other than a heat pump, and I think we should be mandating heat pumps for all new builds. The cost of installing a heat pump in every new build home on an estate is far lower than retrofitting one to an existing property.
nctnico:
--- Quote from: tom66 on February 22, 2024, 09:16:04 pm ---
--- Quote from: zilp on February 22, 2024, 07:44:02 pm ---
--- Quote from: Miyuki on February 22, 2024, 06:26:25 am ---Current builds will be profitable in 30-40 year horizont (if there won't be any problems). So no investor will go into this because it is beyond their lifetime
--- End quote ---
That is not how investment works.
For one, there are plenty of investors where 30-40 years is not in any way beyond their lifetime. Think insurance companies, pension funds, endowments, that sort of thing. Plenty of investors who wouldn't care if they couldn't liquidate some position for half a century, as long as the returns are worth it.
But also, that is what the secondary securities markets are for. If the profits are as certain as has been suggested, then you can just hold the shares or bonds and then sell them after 30 years or whatever for the time value of the future profits, thus getting your part of the profits before they have been realized.
--- End quote ---
Indeed, only 10 years since the UK paid off its last undated bonds, some of which go back to the 1850s.
https://www.gov.uk/government/news/repayment-of-26-billion-historical-debt-to-be-completed-by-government
There are public-private financing schemes on infrastructure which have very long payoff times. M6toll in the UK was built on a 53 year concession: a private company paid to build it, with the right to take tolls on it for the period of the contract (whilst maintaining it), and the road then returns to the government upon the end of contract.
The idea that investors are nervous about 30-40 year payback times is nonsense, providing the return is reasonably guaranteed, they love it.
--- End quote ---
Indeed. The interest rates on these kind of projects are high and you get a fixed income stream for the decades to come. Ideal for long term investments like pension funds but also small investors are keen on making these kind of investments even though the payback is beyond their grave.
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