The heating market - Italy

1.2 The European market

In EU households, heating and hot water alone account for **% of total final energy consumption. In industry, **.*% of energy consumption was used for space and process heating, while only **.*% was used for lighting and electrical processes such as machine motors, and *.*% for cooling. Almost **% of heating and cooling is produced from fossil fuels in the EU**, while only **% is produced from renewable energy sources [***].

Breakdown of energy sources for heating and cooling Europe, ****, in % Source: ****

 The 'other renewable', which accounts for *.*% of total heating and cooling energy sources, breaks down in the followings way: heat pumps (***).

In Europe the heating market directly employs ***,*** people, and a total of *.* million in the totality of its value chain [***].

It is difficult to put a dollar figure on the value of this market since it reaches into overlapping industries (***). However, it is estimated to be at tens of billions of dollars.

Due to regional and local differences, climatic conditions, but also different national energy markets and consumer preferences, the European heating market is fragmented. Thus, the share of boilers, district heating, direct electric heating systems, heat pumps, biomass, solar energy etc. varies according to the local context. Nevertheless, the whole European heating market ...

1.3 The Italian market: in the driver's 'heat'

To take on this extensive market we will first look at the big picture and analyse the energy market in Italy and then zoom in, and look at heating.

In **** the primary energy consumption in Italy amounted to a total of *.** exajoules of energy. According to Eurostat, primary energy consumption is the overall demand for energy in a country, 'it covers consumption of the energy sector itself, losses during transformation (***) and distribution of energy, and the final consumption by end users'. To put this figure into perspective one exajoule is equivalent to almost *** million barrels of oil. Primary energy consumption has been decreasing in Italy, peaking a almost * exajoules in ****. It reached an decade-low *.** exajoules in **** and has slightly increased since.

Primary energy consumption Italy, ****-****, in exajoules Source: ****

Of the *.** exajoules of energy consumed in ****, *.** were from natural gas, *.** were from oil, *.** from renewable energies, *.* from hydro, *.* from coal and *.** from other sources. The share of renewables stayed the same from the previous year, while coal and oil decreased, natural gas slightly increased.

Primary energy consumption, by type Italy, ****, in % Source: ****

According to Unione Petrolifera, the largest Italian trade union of oil refineries and manufacturers, Italy's national expenditure on energy ...

1.4 Renewable energy used for heating

In **** renewable energy sources produced a total of *.** gigawatts worth of energy, an all time high. To put this into perspective * gigawatt is the equivalent *.* million horsepower, *.* million photovoltaic pannels, or *** million LED lights turned on. The turnover of the renewable energy sector was estimated at *.* billion in the same year, and **.*% of total energy consumption in Italy that year came from renewable energy sources.

Renewable energy production, revenue and share of consumption Italy, ****-****, in gigawatts, billions of euros and % Source: ****

Over half of the renewable energy consumed in Italy is consumed in the North (***) and the rest between the centre and South of the peninsula [***]. This sector employed **.*** people between permanent and temporary positions. A large minority worked in hydroelectric power-plants.

  Number of employees in renewable energy, by technology Italy, ****, in number of employees Source: Ministero dello Sviluppo Economico  

As mentioned above **% of energy used in households is used for heating (***) but quite high nonetheless [***]. The most prevalent form is solid biomass, which accounts for *% of total residential energy use. The graph below outlines the breakdown of the different sources of renewable energies used in the residential sector.

Breakdown of renewable energies used in the residential sector, by ...

1.5 Imports & exports

The UN Comtrade database allows us to determine global trade flows of certain goods. By using three codes we can observe imports and exports of heating appliances and systems. The codes are:

****: Radiators for central heating (***), air heaters and hot air distributors ******: Heaters, instantaneous gas heaters, for domestic or other purposes ****: Electric water, space, soil heaters, hand dryers, irons and electro-thermic appliances for domestic use

Italy is among the world's largest exporters of heating appliances. In fact, in **** Italian exports of these totaled *.** billion dollars, making Italy the nation that exports the third most heating appliances.

Leading heating appliance exporters World, ****, in millions of dollars Source: ****

Imports, exports and coverage rate of heating appliances Italy, ****-****, in millions of dollars and % Source: ****

In **** the main destinations for Italian manufactured heating appliances were Germany and France with over *** million dollars worth of goods exported to these countries, followed by Poland, the UK, Spain and the USA with over *** million dollars. Italy mostly imports from China (***).

1.6 The Impact of COVID-19

In its reports of the first two trimesters of **** the Italian Agency for New Technologies, Energy and Sustainable Development (***) observed a massive drop-off in the consumption of energy in the peninsula. When industry, economic activity and transportation ground to a halt in March and April due to the confinement, so did their energy consumption. In fact, ENEA calculated that yearly energy consumption would be between **-**% lower than **** due to the economic effects of the pandemic.

Conversely, with people locked at home for extended periods of time, residential energy consumption shot up by over **% compared to the year before [***]. March **** was also a chilly month in the peninsula so it can be assumed that Italians turned on their heaters more often and for longer.

In total, Italian citizens and businesses paid ** billion euros less for energy in **** than in ****, a two-decade low of **.* billion euros, amounting to *.*% of GDP (***).

Expenditure on energy and % share of national GDP Italy, ****-****, in billions of euros and % Source: ****

When observing Italians' opinion towards heating, heating systems/appliances and the potential purchase of such, we can observe that the pandemic had a strong impact.

Positive answer to the question 'In the next three months, are ...

2.1 Household heating in Italy

As mentioned above, households represent more than **% of energy consumed for heating purposes, and **% of the energy consumed in households is dedicated to the purpose of heating environments or water.

Before delving into a deeper analysis, it is important to identify the presence of heating systems and appliances in Italian residences. In ****, there was a very high prevalence of these in Italy, **.*% of households had a heating system or appliance.

Presence of a heating appliance or system in households, by region Italy, ****, in % Source: ****

**% of housing buildings in Italy contain *-* separate residences, **% have more than * residences, while **% are mono-residential (***) [***]. This helps give an insight on the type of heating systems and appliances Italians have in their homes: centralised or autonomous

There are **.* million heating appliances/systems in Italian households. Of households which have a heating system or appliance in Italy, **% have a centralised heating system, while **% have individual autonomous heating appliances.

    Breakdown of type heating in households Italy, ****, in % Source: ENEA  

The table below breaks down in greater detail the 'fleet' of heating system and appliances in Italy.

Resident-occupied households by primary heating system   Centralised Autonomous Total   Centralised Autonomous Total Natural gas *.***.*** **.***.*** **.***.***   **.*% **.*% **.*% Diesel fuel ***.*** ***.*** ***.***   *.*% *.*% *.*% Liquefied petroleum gas **.*** ***.*** *.***.***   *.*% *.*% *.*% Biomass **.*** *.***.*** *.***.***   *.*% **.*% **.*% Heat ...

2.2 Heating consumption in other sectors

As mentioned above, most of the heat that is generated is in residences. However, the heat that is consumed in the industrial, agricultural and services sector is not insignificant. In fact, in **** industry consumed almost * terjoules of heat. One terajoule is equal to ** toe (***).

Direct heat consumption Italy, ****-****, in terajoules Source: ****

2.3 Latest trends in demand

With new technologies coming onto the market and an evolving demography the trends in demand change every few years. Below are outlined some of the requested heating system and appliances of the last few years.

Condensation stove: savings

In this appliance heat is generated with gas through combustion, but the excess gas that normally is considered as waste gets 'converted' into aqueous vapour and re-inserted into the heating system. The smoke that is normally produced is cooled down to a liquid state. In relation to traditional stoves these are more expensive but also more energy efficient as excess heat and energy is recovered and reconverted. This is considered to be a large initial investment that saves money in the long run. The most affordable ones coast around *.*** euros (***) with more advanced models going for up to *.***. However the average savings on energy bills is considered to be around **%, while the gas emissions are **% smaller. Models exist to heat both the environment as well as water. 

Natural heating systems

Biomass condensation stoves (***) are in high demand. These have a reverse combustion system, meaning that the flame is on the bottom of the appliance and the fuel is places on top of it ...

3.1 Italian production

Due to the vast but also diverse nature of this market it is hard to pinpoint one type of manufacture, or specialisation. The ISTAT database, and more specifically the Ateco code will help us identify the production value of heating systems and appliances. For this purpose we will use the codes below which correspond to certain productions:

********: radiators for centralised heating (***) made of metal or cast iron ********: stoves for central heating ********: parts for stoves for central heating ********: other stoves (***) ********: parts for steam powered stoves ********: valves for centralised heating radiators and thermostat valves ********: other valves for heating systems ********: other valves for the regulation of temperature ********: burners for the alimentation of liquid combustion stoves or ovens   ********: other burners for the alimentation of stoves or overs ********: automatic fireplaces ********: non-electric ovens for heating purposes ********: parts of burners and automatic fireplaces ********: heat exchangers ********: air conditioning systems (***) ********: air conditioning systems with a cooling system ********: heat pumps and other devices for the conditioning of air ********: parts of air conditioners ********: devices for the change in temperature of air and water in laboratories

   The graph above includes the production value of all of these devices, appliances, systems, and parts. The total value in **** was *.* billion euros in ****. Many ...

3.2 Main players and distribution

When speaking of heating appliances and systems, this market is highly fragmented. On the scene are present appliance manufacturing giants such as Samsung, who don't specialise in one exclusive appliance but are known for their quality are reliability, or other large non-specialised companies such as De'Longhi, as well as smaller companies specialised in heating appliances and other niche players (***).

There are a few obstacles to the attribution of market shares to companies. First, is the fact that many heating systems in Italy are centralised and therefore were installed as part of the construction of the building and hard to attribute to one company. Second, many households have independent heating systems that are not store-bought appliances but are instead mason-made chimneys, stoves and ovens. 

Having said this, below is a graph that outlines some of the biggest players in this market.

Revenue of heat appliance manufacturers Italy, ****, in millions of euros Source: ****

Natural gas is the type of energy that is most used for heating. The Italian energy company Enel is both the biggest producer and distributor of natural gas in the peninsula. In **** it produced more than * billion cubic meters of natural gas and held a market share of almost **%. Below ...

4.1 Typology of the offer

The heating market is quite varied and other than traditional chimneys, stoves, radiators and AC units there are many different ways that one can heat their home.

Hybrid heat pumps

This type of heat pump is an electric heat pump with a gas condensing boiler incorporated in it. Users chose their specifications prior to installation, and there are various settings possible for the operation of this device based on climate, energy prices and other factors. These can be installed without any modifications to the building, and can run also on de-carbonised renewable fuels. This appliance is highly efficient and has a reduces emission rate. It is also very flexible for different types of uses and buildings.

Electric heat pumps

These transfer heat that already exists in the environment and syphon it directly inside of a building. The latest versions are very quiet and don't require much maintenance after installation. They can be used for the heating of space, hot water, but also cooling and ventilation.

Condensing boilers

These appliances can heat both the environment as well as water. The are 'condensing' in the sense that they condense vapour (***) that is produced as an excess byproduct in combustion and convert it into ...

4.2 Pricing

When speaking of prices for heating two things need to be taken into account:

the price of the energy that the appliances use to heat environments or water the price of appliances and systems themselves

With regards to the price of energy, below is a table outlining the prices of energy for heating both in terms of volume and power (***)

Source: ****

It is interesting to observe evolution of prices of two important energy sources used for heating in Italian homes: natural gas and diesel fuel. These are outlined in the graph below

Prices for natural gas and diesel fuel for households for heating purposes Italy, ****-****, in euro cents per kilowatt-hour Source: ****

Heating appliances and systems are so varied in terms of technology and energy used, heat production, and materials used. Because of this prices also vary greatly. The tables below displays a few different type of heaters, heating appliances and heating systems and their prices (***).

Prices of heating appliances Samsung Maldive **** btu single split AC unit €*** Fuji ecoplus wood and wood pellet burning stove Ecoplus €*** De'Longhi electric thermosiphon radiator Vento €*** Hudson Reed Revive anthracite vertical radiator €*** Italkero Focus gas chimney box €*** Ariston gas heater **L €*** Ariston VelisEvo electric water heater ...

5.1 Regulations

Direttive europee per i prodotti legati all'energia

La direttiva "Ecodesign" è una direttiva europea che impone un requisito minimo di prestazione su un certo numero di prodotti immessi sul mercato europeo. È accompagnata dalla direttiva sull'etichettatura energetica, che permette ai consumatori di essere informati e di confrontare prodotti dello stesso tipo in termini di prestazioni energetiche. Queste direttive sono suddivise in regolamenti per gruppi di prodotti

Norme nazionali per il riscaldamento

Il Decreto del Presidente della Repubblica n. *** del ** agosto **** - Regolamento recante norme per la progettazione, l'installazione, l'esercizio e la manutenzione degli impianti termici degli edifici ai fini del contenimento dei consumi di energia, in attuazione dell'art. *, comma *, della legge * gennaio ****, n. **, è abbastanza esaustivo nel trattare il riscaldamento e gli apparecchi di riscaldamento.

 Il decreto divide l'Italia in diverse zone climatiche in base alle differenze positive tra la temperatura degli ambienti della casa (***) e la temperatura media giornaliera esterna registrata in un certo periodo di tempo. Stabilisce per ciascuna di queste zone climatiche quando si può iniziare ad accendere il riscaldamento e per quanto tempo lo si può tenere acceso durante il giorno. Naturalmente, ci possono essere delle eccezioni, come quando arriva un'ondata di freddo particolarmente intensa.

Il decreto divide l'Italia ...

6.1 Segmentation

• Samsung Italia
• De' Longhi
• Daikin Italia
• IVAR
• Siderval