Heat pumps: radical efficiency by moving energy 15 February 2016

The range of applications for heat pumps is expanding rapidly. In this special article, technical experts Alan Pears and Geoff Andrews demystify the practicalities and explore the potential of heat pumps to drive down energy use in Australian homes, businesses and industry.

Every Australian home and business has at least one heat pump – a refrigerator or air conditioner. But ongoing development means heat pumps can be used for an increasing range of activities, including cooling, producing hot water and even industrial steam.

The range of applications for heat pumps is expanding rapidly as capital costs fall and materials, motor efficiencies and capacity to vary motor speeds and manage systems all improve, new refrigerants are developed, more sources of heat (or cooling) are identified, energy storage becomes more attractive, and process heat requirements change.

Indeed, heat pumps now provide viable alternatives to traditional sources of heat, such as gas, for many activities. Given recent increases in gas prices, heat pumps are becoming even more attractive. And, of course, heat pumps can provide cooling as well.

A recap on heat pumps

A heat pump (or chiller) works by using energy (e.g. electricity) to pump thermal energy from one area to another. A fridge, for example, moves heat from inside the fridge to the coils at the back. As a result, heat pumps can use a small amount of energy to create a big increase (or drop) in temperature, which makes them seem to defy the laws of thermodynamics! In theory, a heat pump can deliver up to 10-15 times as much energy as they consume driving the compressor. The efficiency of heat pumps (often called the ‘Energy Efficiency Ratio’ or ‘Coefficient of Power’) is growing rapidly, as this graph from EnergyConsult shows.

Shifting heating and cooling to high-efficient heat pumps could save enormous amounts of energy. The latest residential heat pump can deliver heat at 600% efficiency (i.e. create six units of thermal heating per unit of electricity consumed) compared with a gas heater at 50% to 95% efficiency. When the electricity is produced using renewable electricity, this delivers astounding reductions in greenhouse gas emissions.

While most heat pumps are driven by electric motors, they can also be driven by gas engines or, indeed any device that can drive the compressor. This article focuses on heat pumps driven by electric motors.

(Graphic: Baseline and Policy Trends for Energy Efficiency Ratio [EER]: Split System Air Conditioners- Reverse Cycle, from report by EnergyConsult for Department of Climate Change and Energy Efficiency, November 2010).

If you’d like for more detail on how heat pumps work, click here to read Alan and Geoff’s 'back to basics' summary of heat pump principles.

Why use heat pumps?

There are many reasons for using heat pumps in today’s rapidly changing energy context.

Financial benefits

The running cost of an efficient heat pump is much lower than electric resistance heating, LPG and, in many cases, even mains gas. The best heat pump water heaters are competitive with solar options. Where use of heat pumps and other emerging efficient electric technologies (such as induction cooking) avoids the need to connect gas to a property, the fixed charges of gas supply, as well as the need to deal with another energy supplier, can be avoided.

There are concerns about ongoing increases in gas prices as our east coast gas grid competes with LNG exports from Queensland. At the same time, the economics of on-site electricity generation and energy storage, which complement heat pumps, are improving. So heat pumps provide insurance against increasing energy prices.

Installation costs can vary widely, but heat pumps can be cheaper to install than solar, and can avoid costs and practical problems of installing flues and on-site gas and steam pipes. Heat pump prices are falling as economies of scale and technology improvements flow through.

If a need for cooling exists, heating capability can be added at little or no extra cost by adding a ‘reverse cycle’ valve.

Where waste heat, water vapour or waste ‘coolth’ is available, a heat pump can scavenge and upgrade energy to temperatures suitable for use on-site.

(Graphic: Pears, A. Presentation to APEC Energy Ministers, October 2015)

Environment and safety 

A heat pump avoids on-site combustion, reducing local pollution and health concerns. It may also offer safety benefits, for example it can replace unflued gas space heaters in homes, and LPG cylinders in bushfire-prone areas.

Heat pumps can also play a key role in dramatically reducing emissions. While gas has traditionally been seen as a lower emission fossil fuel, it still has significant emissions, including methane leakage from the gas production and transport.

Heat pumps, however, can utilise renewable electricity and thermal storage. Where on-site generation occurs, dependence on electricity suppliers for fair pricing of electricity exports can be reduced by use of heat pumps. When combined with thermal or electricity storage, peak grid electricity demand can also be managed.

Energy supply and demand management

This is a complex area: increased electricity demand at existing peak times can add to supply infrastructure costs. However, attractive integrated strategies can limit or avoid increases in peak demand. Options to offset electricity use by an additional heat pump include replacing resistive electric equipment and old, inefficient heat pumps, utilising thermal and/or electricity storage and smart demand management, and upgrading energy efficiency of buildings and industrial process equipment. 

Replacing gas with such strategies can smooth seasonal gas peaks. This can increase gas infrastructure utilisation while freeing up gas for export.

At home - new applications for heat pumps

In homes, heat pumps are playing roles beyond refrigeration and cooling. They are now used for home heating, domestic hot water, clothes drying and pool heating. Heat pump clothes dryers extract the heat from the hot exhaust air, condensing the water vapour and recovering energy. This avoids the need for venting of humid exhaust air, although they need a water drain.

There are also many interesting innovations. Variable speed inverter-controlled air conditioners are now common: they offer improved temperature control and higher part-load efficiency. In space heating and cooling, multiple indoor units can share a single outdoor compressor unit. Daikin have recently released a European-designed indoor unit (Nexura) that provides both radiant and convective heating, as well as the US7, which has a built-in desiccant wheel and can deliver filtered and humidified or dehumidified outdoor air.

In extreme climates, ‘cascaded’ compressors are emerging. By using two compressors in series, with one sourcing its heat or cold from the other, the temperature difference across which each heat pump operates is reduced, so overall efficiency is improved. ‘Geothermal’ or ground source heat pumps are also available: because ground temperature is more stable – higher in winter and cooler in summer extremes, they can deliver higher efficiency, although pumping energy and temperature differences across heat exchangers can offset savings, especially in moderate climates.

While heat pumps have been used for domestic hot water for many years, they have tended to be noisy, and maintaining efficient cold weather performance has been a challenge. A number of Japanese manufacturers have jointly developed the ‘Eco-Cute’ design approach. This uses carbon dioxide as the refrigerant, which allows high efficiency (e.g. COP around 4.5) and maintains relatively high efficiency in cold weather. They can raise the temperature of water by around 40C in a single pass, so they can also provide a continuous flow of hot water.

Commercial buildings – existing and new uses of heat pumps

In the commercial sector, heat pumps are widely used for refrigeration, space heating and cooling and water heating. They are also beginning to appear in aquatic centres to heat pools and manage indoor humidity. A heat pump can recover large amounts of latent heat in exhaust air by condensing the water vapour in humid exhaust air.

Many commercial refrigeration systems are inefficient, with the inefficiencies starting with thermally poor design of the display cabinets, cold rooms and other equipment that needs cooling. As in other areas, improvements in all aspects of system design, such as variable speed drives for compressors and fans, more effective heat exchangers, smart controls and improved refrigerants are driving big savings. Thermal storage, sometimes using phase change materials (PCMs) to store more heat per unit of volume by utilising latent heat, is far cheaper than battery storage – and it can enhance the economics of adding on-site electricity generation by storing heat or ‘coolth’ for later use to avoid chiller operation at peak times or if the grid fails.

Heating, ventilation and cooling (HVAC) of buildings is the biggest energy consuming activity involving heat pumps in the commercial sector. ClimateWorks estimates that HVAC consumes 44% of commercial sector electricity and 39% of commercial gas. A significant proportion of this electricity runs fans (which actually add heat to the air they move) and pumps: their consumption is falling rapidly with improved motor and fan design and variable speed controls. Indeed savings often reach up to 80% relative to traditional fixed speed fans or pumps with dampers or valves.

HVAC energy demand is driven by building envelope thermal performance, but also by heat released by equipment, lights and people, as well as air leakage and exhaust air. Improving equipment efficiency and building design and construction are reducing energy use and size of HVAC systems. Well-designed buildings may need little or no heating, so they can avoid even connecting to a gas supply.

As in other sectors, commercial heat pumps and chillers are improving efficiency all the time. The Australian-designed PowerPax chiller, for example, is achieving Integrated Part Load Value (IPLV) COPs of 6.5 for air cooled units and up to a remarkable 11.1 for water cooled units. The IPLV is a weighted average COP based on ASHRAE-specified hours of operation at varying levels of part load operation. As noted earlier, chiller and heat pump efficiency improves at lower loads and, in the real world, many commercial buildings only operate at full output for limited periods.  

Real time diagnostic systems such as can now alert building managers to problems, while sophisticated management tools compare actual performance to real time simulation of design performance and ‘learn from experience’, to optimise operation. CSIRO’s Building IQ system uses this approach, and is internationally successful.

Industry – an emerging opportunity for heat pumps

Heat pumps are attracting increasing interest in industry, especially now that gas prices are increasing. They can play useful roles in a number of areas:

  • Refrigeration and cooling
  • Providing process heat efficiently, mostly at under 90℃, but steam production is practical (see below)
  • Recovering latent heat from moist exhaust air
  • Scavenging heat from gaseous, liquid and even solid wastes and upgrading the temperature of that heat
  • Drying: for example, drying of timber or grain can be very efficient, as the sensible and latent heat in the moist exhaust air can be recovered by the heat pump. The air delivered by the heat pump can also be drier than heated ambient air when the weather is warm and humid, as the ambient air carries a significant amount of moisture. Indeed, some conventional drying systems struggle to deliver consistent quality and output in humid weather.  

In many cases, modular heat pumps can be located at the point of use, replacing long steam, or hot water pipes or air ducts and their associated energy losses and capital and maintenance costs. This also allows process performance to be optimised because of improved flexibility.

A key issue in the cost-effective use of heat pumps is to carefully analyse the process temperature actually required, and to actively challenge the use of gas-fired steam boilers. Often boilers provide heat at temperatures far above those actually required, leading to very high energy waste. For example, one electrolytic process investigated operated at 63℃, and generated most of the heat it required from internal electrical resistance within the cells. The back-up gas boilers operated at very low efficiency and involved significant maintenance costs. A heat pump that utilised process waste heat (with a storage tank) could be a more cost effective solution.

Research in Japan is leading to development of cascaded heat pumps (see below) that can produce steam at 120-165℃ at efficiencies of 200 to 300%. They can utilise low grade waste heat that would otherwise be dumped. Their modular design offers potential to avoid expensive and inefficient centralised steam distribution systems for many industrial applications.

(Graphics from IEA HPP Annex 35 Application of Industrial Heat Pumps, Task 3 (2013))

Heat pumps are not a ‘silver bullet’

Heat pumps are great for many, but not all, applications. The bigger the temperature difference across a heat pump, the less efficient it is, so they can’t deliver high temperatures for furnaces and other high temperature processes. On the other hand, careful analysis of process requirements may show that the actual temperatures required are much lower than traditionally supplied by steam or combustion. And a heat pump can upgrade ‘waste’ heat for other uses.

Traditional refrigerants used in heat pumps have very high global warming impacts, although most of the ozone depleting refrigerants have been or are being phased out. There is rapid development of low and zero climate impact refrigerants, including hydrocarbons, carbon dioxide, resurgence of use of ammonia, and even water. Careful management of refrigerants is very important, as many are toxic or flammable.

In some sectors, the reputation of heat pumps has been damaged by poorly performing, often noisy equipment applied to inappropriate situations. Careful analysis of the temperatures and amounts of heat available and needed is critical, and quality equipment suited to the application is essential.

Alternatives and complementary technologies

Of course, heat pumps have to compete with a variety of options. Other alternatives are also improving and heat pumps can be combined with other technologies.

As noted earlier, heat pumps can, and should, be combined with thermal and electricity storage systems, onsite energy generation, waste energy recovery and smart demand management based on careful analysis of fundamental thermal energy and temperature requirements. There is increasing potential to avoid or reduce the need for high temperature heat using advanced chemistry, improved heat exchange systems and smart control systems. 

There are exciting developments across a range of technologies. For example, thermo-electric modules (used in some small refrigerators and for micro-cooling of electronics) have traditionally been inefficient, but modern materials technology is driving big improvements.

Thermal cooling and solar heating and cooling technologies are also improving, while gas-powered cooling is also a focus of activity. Of course, these can be integrated with heat pumps for many applications!


It is easy to be frustrated by the pace of improvement in energy efficiency, given the many benefits for households, businesses and the environment. But progress in heat pumps shows that rapid change can happen. The challenges are to take advantage of the opportunities being presented and to encourage even faster innovation.

Alan Pears AM is a Senior Industry Fellow at RMIT University and Senior Advisor to the Energy Efficiency Council. Alan has worked across all aspects of sustainable energy in policy, program development, public education and specific projects and is a well-known commentator on sustainable energy issues.

Geoff Andrews is the founder of energy efficiency engineering consultancy Genesis Now, co-founder of six of sustainability focused businesses and inventor of Organic Response. Geoff was named ‘Energy Efficiency Leader 2013’ at the National Energy Efficiency Awards in recognition of his long-standing contribution to the sector.