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GSR 2015

34 01 GLOBAL OVERVIEW Global demand for heat energy grew at an average annual rate of 2.6% between 2008 and 2012, driven primarily by increased demand for heat in industry and buildings in developing countries.81 Cooling demand also has increased dramatically— up 60% during the decade from 2000 to 2010—as a result of improved energy access and rising global temperatures.82 In recent years, global growth in the use of traditional biomass for heating has begun to level off due to increasing urbanisation and access to modern energy sources in developing countries.83 By contrast, global consumption of modern renewable energy in the heating sector increased by an average of 2.4% annually from 2007 to 2013.84 Despite this increase, the total share of modern renewable energy in the heating sector has remained steady because of continuing growth in final energy use for heat.85 Renewable energy for heating is fairly evenly distributed around the world as a result of the use of industrial biomass in many countries. However, there are important differences in renewable heating trends at the regional level: ◾◾ Asia uses the largest amount of modern renewable energy in the heating sector overall, driven primarily by the amount of industrial bio-heat used in India and other Asian countries.86 China continued to dominate the global solar heating market in 2014 and to lead the world in the direct use of geothermal, and in biogas for heat.87 ◾◾ Europe leads the world in modern renewable energy as a share of heating energy (14.7% in 2013), and European countries such as Iceland, Norway, and Sweden have some of the highest renewable heating penetrations in the world (over 50%).88 Europe also leads in innovations such as solar thermal combi-systems, the integration of solar heat into district energy networks as well as industrial processes, and the development of smaller-scale geothermal CHP and heating plants.89 ◾◾ The United States continued to be a leader in solar water collector capacity during 2014, although this market has slowed in recent years.90 Overall, total renewable energy for heating in North America declined from 2007 to 2013 due to decreases in biomass consumption in the industrial sector.91 ◾◾ In Latin America, expansion of renewable thermal energy use in recent years has been driven primarily by biomass growth.92 At the same time, Brazil has experienced strong growth in solar water heating, and Mexico also is becoming a notable market; several other countries in the region have experienced growth in solar water heating even without public incentives.93 ◾◾ In Africa, modern renewable thermal energy plays a modest but important role, particularly in countries such as Mauritius, Ethiopia, and Kenya that have sugarcane industries fuelling co-generation plants with bagasse.94 South Africa’s solar water heating market led the continent, although markets across Africa continued to add solar heating capacity in 2014.95 ◾◾ In the Middle East, solar hot water is an important resource in many countries. Israel leads for total capacity of solar water collectors, followed by the Palestinian Territories, Jordan, and Lebanon.96 About 85% of Israeli households use solar water heaters.97 Interest in solar cooling is also rising in the region.98 The year 2014 witnessed the continuation of several trends that are increasing renewable energy’s potential to play a larger role in the heating and cooling sector. These included: energy efficiency improvements in industrial processes, in heating and cooling systems, and in building materials; rising interest in net zero energy buildings (NZE); and a growing number of countries with NZE mandates for 2020 and beyond. (p See Energy Efficiency section and Sidebar 7.) The expansion of district energy systems also may provide increased opportunities for renewable heating and cooling. District energy supplies approximately 12% of residential and commercial heating in Europe, and some countries in Europe and elsewhere have much higher percentages.99 China, for example, doubled its district heating networks between 2005 and 2011 and supplies an estimated 30% of its heating demand from district systems.100 Worldwide, an estimated 6% of modern renewable heat in buildings is provided through such networks.101 A number of developed countries, especially in Europe, are integrating solar, biomass, and geothermal heat into district systems.102 Denmark more than doubled the total solar thermal capacity in its district heating networks between 2012 and the end of 2014.103 A small number of countries, such as Denmark and Ireland, also has begun using district heat systems and other technologies to absorb heat generated by renewable electricity during periods of excess supply (e.g., through the use of heat pumps or resistance heaters).104 China called on high-wind provinces to begin pilot testing of wind-to-heat technologies to ease the strain on local grids and reduce local air pollution.105 Another significant trend is a move towards the use of hybrid systems that integrate several energy resources (such as solar thermal or biomass with heat pumps) to serve different heat applications.106 China’s market for hybrid-heat pump products is double the size of Europe’s, and both markets are expanding rapidly.107 There is also growing interest in the use of larger-scale heat pumps for district heating as well as industrial processes.108 Despite these innovations in renewable heating, a limited awareness of the technologies, the distributed nature of consumption and fragmentation of the heating market, and a relative lack of policy support has constrained growth in the sector. Further, the sector has faced headwinds due to low fossil fuel prices, ongoing fossil fuel subsidies (especially for natural gas), as well as competition from other possible investments, such as energy efficiency improvements or other renewable energy systems (e.g., solar PV, heat pumps, and solar PV / heat pump hybrids).109 Solar thermal has experienced the fastest growth among the modern renewable energy sources, but the pace of growth continued to slow in 2014 in response to such challenges.

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