NIBE Climate Solutions business area
Driving forces of the market Nordic countries Rest of Europe Other markets
The global transition to more sustainable solutions One fundamental driving force for our products is the essential global transition to more sustainable solutions to reduce negative climate impact and save the Earth’s finite resources. According to the UN Environment Programme, buildings account for roughly 40% of total energy consumption in the world and emit a third of all greenhouse gases. A change in technology is required to reduce greenhouse gas emissions from buildings. Systems based on fossil energy sources such as oil, coal and natural gas must be phased out in favour of systems based on renewable energy that also require less input energy for the same output power. The rate of this transition depends on a number of driving forces: • Energy price trends, both for fossil fuels such as oil and natural gas and electricity prices. • Political instruments, direct financial support/subsidies for transition, energy taxes, indirect support that affects general construction and conversion costs. • Public authority requirements for products, including the Ecodesign Directive, which sets minimum energy performance requirements for products in the EU single market. The intention is to improve products’ environmental performance throughout their life cycle. Another example is stricter energy-saving requirements in buildings. These requirements are largely national but the EU is working
to establish common requirements and standards.
Sales by geographical region
• Smart buildings, increased demand for better energy performance and control of the climate control systems of homes and commercial properties.
2% 27%
• The property and construction market, demand for homes and commercial premises and the economic situation determine the extent of construction and renovation.
34%
37%
• The cost to the end consumer of investment and operating costs, depending on energy type.
Nordic countries Rest of Europe North America, Asia & Australia
Group trends and business environment factors can be found on page 10.
Other markets
A very large market The addressable global market for heating, ventilation and air conditioning systems is very large. Our estimate is that it totals at least SEK 500 billion. The HVAC (Heating, Ventilation & Air Conditioning) sector as a whole represents great business potential with good opportunities for future expansion with product solutions for indoor climate comfort. If we look only at the need for heating systems designed for detached and semidetached houses in the EU, including Switzerland and Norway, the average annual replacement volume is estimated to be around five million units. In addition, during an average year around one million units are installed in new-build detached and semi-detached houses. This means that the penetration rate for heat pumps designed for waterborne distribution is around 5% in the EU.
OPPORTUNITIES
RISKS
• Great market potential in Europe and North America
• Energy and environmental policy that promotes renewable energy
• Strong brands
• Increased interest in renewable energy
• New laws, public authority decisions, energy taxes, etc. with a short-term perspective
• Broad range of products
• Access to rational production in countries with lower labour costs
• New technologies outside our current areas of expertise
• Continued expansion through acquisitions on a fragmented market
• Reductions in new builds
• State-of-the-art heat pump factories in Europe and North America • Most advanced product development centres for heat pumps in Europe and North America
NIBE INDUSTRIER AB · ANNUAL REPORT · 2017
• Low gas and oil prices usually mean continued use of fossil energy sources • Artificially high electricity prices on several markets on the grounds that the transition to less use of fossil energy sources must be paid for with taxes on electricity
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