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Residential heat recovery in EuropeApril 2008

The European market for heat recovery is set for continued growth. It is estimated that sales reached approximately 207,316 units in 2007, which is a twelve per cent increase from 2006. Germany is the most dominant country in the heat recovery market with approximately sales of 51,400 units in 2007, closely followed by Finland, UK and Netherlands.

One of the main drivers for this the growth is the change in legislation and construction. New legislation has guaranteed that building standards across Europe place a high emphasis on minimising energy consumption and rising energy prices have made consumers more receptive towards alternative energy resources.

Sweden is a key driver for renewable energy policies and energy saving measures in Europe, therefore encouraging the use of heat recovery systems. At the moment, Swedish renewable energy use stands at 28 per cent, but the Swedish government are striving to make sure by 2020, 49 per cent of the country's energy use comes from renewable energy. Heat recovery units are not a new concept to the Swedish consumer as they have had units installed since the 1980s. Netherlands is the most developed European country in terms of heat recovery installations, slightly less than half of all new residential buildings are now equipped with heat recovery systems. Legislation is a key driver of this growth, the European Performance of Building Directive (EPBD) has resulted in a review of the Dutch Building Code, which now states there be a minimum level requirement of energy performance in new builds or major renovations.

Dedicated heat recovery units are the most common type in the European market. Integrated heat recovery systems, such as heat pumps are new to the market therefore they do not have a substantial market share, but gradual growth is expected in the future.

Decentralised units are the most common type of product type in the European heat recovery market. In Denmark, they accounted for over 80 per cent of the market, by volume, in 2007. In terms of heat exchangers, the trend is away from cross flow and towards counter-flow, although cross flow is still popular in the UK and Austria. Counter flow heat exchangers are by far the most popular type in the European market. However, the cross-counter flow type is evident solely in the Austrian market and most dominant accounting for 90 per cent of the market. At nearly 63 per cent, rotating heat exchangers hold the greatest market share in Sweden, because of their greater efficiency.

The market to a great extent is driven by the residential new build sector. This is a clear trend in nearly all of Europe, with the exception of Sweden, where there is a slight increase in the residential replacement sector over the residential new build sector.

Single room units are not popular in the majority of the European countries studied, and the market is almost non-existent in Sweden and France, because of their low capacity of air flow and energy efficiency. In terms of product type, dedicated heat recovery units, mainly single room and decentralised units, are the most popular type in the German market, accounting for more than 80 per cent of the total market. The vast majority of heat recovery units in Finland are dedicated units, and the larger share of heat recovery units are made up of decentralised systems that serve a single flat or single dwelling. The most common units are in the 151-400m3/h range, because it is the most widespread type used for single dwelling housing.

Distribution channels for heat recovery units vary from country to country. For example, in Sweden, the distribution channel is relatively fragmented and each player’s distribution channel varies depending on its end users. Furthermore, in Denmark, the distribution channel differs greatly for centralised and decentralised units. However, in general, the most common route to the market is through specialist installers and wholesalers.

The majority of the European heat recovery market is made up of local players, with the exception of Austria (40-50 players) and Germany where there are over 100 different brands available. The Danish market is made up of local players, such as Exhausto, Genvex A/S, Nilan A/S, Øland Villaventilation A/S and Vent-Axia. Stricter legislation is a major hindrance for imported brands in the Danish market, which states heat recovery units must, at the very minimum, recover 65 per cent of the lost heat. Many imported brands cannot meet this requirement therefore they have either left the market or are currently undergoing product development.

OEM activity is increasingly popular in the UK, Germany, and Austria. In Austria, OEM systems account for more than half of the entire market volume, and it is common practice in Germany, accounting for more than two thirds of the market and the largest OEM supplier is the Dutch company Brink. In the rest of the European countries studied there was very little or no OEM activity.

The outlook for the European heat recovery market is for steady growth. In comparison to other European markets, growth rates are expected to remain particularly high for the UK and Austria. The main drivers of this growth will continue to come from higher energy prices and changes in building regulations, which will be reflected in the French market. Despite France being one of the fastest growing markets for renewable energies, especially the CAGR market holding 32 per cent, the market for heat recovery units has remained limited until very recently. It is expected that future European legislation cutting green house gases will likely prompt the French government, and the remainder of Europe, to promote renewables on a large scale, encouraging the installation of heat recovery systems. However, a lack of growth in the construction of new housing will limit the market potential, as nearly 83 per cent of units are sold into new build applications. In general, the future for the European heat recovery market appears to be very positive.

Statistical data in this article is quoted from the European Market for Heat Recovery 2007 study which includes market forecasts to 2012. Separate reports are available for Austria, Denmark, Finland, France, Germany, Netherlands, Sweden, and UK. For more information on this report please contact Jon Williams at WMI.