Heat Pumps and Heating Systems Components Analysis

Scottish Enterprise commissioned Ramboll to deliver a report to increase understanding of the components, activities, costs, and capabilities required to deliver a more localised heat pump system supply chain in Scotland.

This research was informed by an extensive literature and information review including previous Ramboll studies, interviews with inhouse Ramboll heat pump experts and included 4 external expert interviews.

This report is broken down into 3 main sections: understand the breakdown of all the components across a heat pump system, a domestic heat pump system is chosen for analysis; provide technical specifications of the heat pump system, including technical drawings, an exploded bill of materials, and a high-level cost analysis; and understand the capabilities required to deliver the components. The report concluded that: heat pump heating systems share many elements with traditional boiler heating systems but require advanced controls for efficient optimisation; heat pump system costs - the project value of a heat pump was found to be approximately one third of the total system cost, the next largest cost was found to be upfront cost, including purchase, installation and commissioning, installation costs were found to be highly variable, and the total market value for heat pump systems is forecast to be around £359 million in 2026 in Scotland; materials and manufacturing - certain materials including stainless steel, aluminium, copper and plastic are required both in heat pump and heat pump system components, this links the cost of heat pump systems to these raw materials; and Scottish value chain capability is more likely to lie in the materials processing side rather than raw material extraction as Scotland has the capacity to carry out pipe bashing and welding, and manufacture its own heat exchangers and heat storage/hot water cylinders.

A major barrier to heat pump system development was found to be the lack of public understanding of heat pumps. A coordinated education campaign across all industry stakeholders, led by Scottish Government, is recommended. Scotland’s heat pump sector requires more high-quality technicians to reach its deployment targets. By tackling the skills gap quickly and decisively, Scotland’s heat pump sector stands a greater chance of not only meeting its deployment targets, but also creating economic opportunities as part of a green and just transition. Innovation is also required to improve system design that will optimise operational efficiency and uncover the cost-saving opportunities around end-of-life activities (which have yet to be demonstrated at scale).