This is the executive summary showing a few pages from Rethink Energy's "Warming and Cooling - double whammy for the grid" which is a forecast and valuation of the global electricity needs for household HVAC markets from now until 2050. Calculating the power needed to warm and cool the world’s homes has never been harder. Not only does climate change, rising populations, a wealthier middle class need to be factored in, but also the impact of decarbonization on power generation and grid resources. This report from Rethink Energy starts with a simple question “where will the electricity come from?” Where HVAC (Heating, Ventilation, Air-Conditioning) is concerned, we are facing two global electrical problems. The first is how to shift homes that rely on fossil fuels to renewable; the second is to maintain and grow economic productivity in the face of soaring temperatures. Over 58 pages, accompanied with graphs, charts and data in an accompanying spreadsheet, Warming and Cooling - double whammy for the grid: 1) describes and forecasts the size and key trends for HVAC in 21 countries that represent 84% of the world’s power generation; 2) provides a roadmap for grid planning and electricity production, depending on the penetration of electrical HVAC devices; 3) puts genuine figures which show that as more cooling is installed and as home heat gets decarbonized, global utilities will need to lay on more than 1,500 TWh in fresh power resources (that’s collectively about the same amount of electricity that India supplies to its 1 billion citizens). You may be surprised at where the problems facing the modern grid are likely to come from. For instance, the Italy, South Korea, the UK and Japan will hit hardest, as they to convert from natural gas to renewables. Further details and full listing of other forecasts: https://rethinkresearch.biz/reports-category/rethink-energy-research/

1. R E T H I N K
T E C H N O L O G Y
R E S E A R C H
https://rethinkresearch.biz
Companies mentioned in this report: BP, CFE, Electrify America,
Eskom, EVN, General Electric, Hyundai, International Energy
Agency; LG, Fortum, Botas, PEMEX, Petrobrás, PipeChina,
Samsung, Siemens, Taipower, The US Census Bureau
Warming and Cooling - double whammy for the grid
Forecast Transition to 2050
Executive Summary

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CONTENTS
Page
Table of Contents 2
Graphs 3
Introduction 4
What have people forecast in the past and why it is wrong 5
How much fresh generation do we need for this 10
Domestic uses of electricity 13
Offloading home heat from gas to electricity 18
Where are we with heat pumps today? 21
Space and water heating and space cooling by country 22
China 22
US 27
India 29
Europe 32
Germany 32
France 33
Italy 35
Spain 36
UK 37
Australia 39
Turkey 40
Africa and South Africa 42
Vietnam 45
Mexico 47
Saudi Arabia 49
Taiwan 50
Indonesia 52
Brazil 53
Canada 55
Russia 56
South Korea 58
Japan 58
Methodology 60
Contacts 62
About Rethink Technology Research 63

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GRAPHS AND TABLES
Page
Combined % increase in HVAC electricity demand by country to 2050 10
Combined HVAC electricity demand in largest electricity countries to 2050 11
Increase in electricity demand due to space and water heating to 2050 12
Increase in electricity demand due to space cooling to 2050 12
Global Electricity demand to heat homes 18
Global Electricity demand to cool homes 20
Heat and Aircon Growth China to 2050 27
Heat and Aircon Growth USA to 2050 28
Heat and Aircon Growth India to 2050 30
Heat and Aircon Growth Germany to 2050 32
Heat and Aircon Growth France to 2050 34
Heat and Aircon Growth Italy to 2050 35
Heat and Aircon Growth Spain to 2050 36
Heat and Aircon Growth UK to 2050 38
Heat and Aircon Growth Australia to 2050 39
Heat and Aircon Growth Turkey to 2050 41
Heat and Aircon Growth South Africa to 2050 43
Heat and Aircon Growth Vietnam to 2050 46
Heat and Aircon Growth Mexico to 2050 48
Aircon Growth Saudi Arabia to 2050 50
Heat and Aircon Growth Taiwan to 2050 51
Heat and Aircon Growth Indonesia to 2050 53
Heat and Aircon Growth Brazil to 2050 54
Heat and Aircon Growth Canada to 2050 55
Heat and Aircon Growth Russia to 2050 57

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Introduction
In some parts of the world people spend as much as 65% of their elec-
tricity bill on being warm in their home. In other parts of the world
people may choose to spend that much on being kept cool. So what
happens in a world where the grid has to supply both?
In climates which swing wildly from hot to cold, electricity customers
spend similar amounts on cooling as they do on warming. These
amounts vary quite a lot based on how prosperous their economies are,
how widely spread their middle classes are, what percentage of the
country actually has electricity, and how extreme the temperatures are
and whether or not electricity is subsidized, or cheap.
While we anticipate that many countries already have a nascent re-
quirement for cooling, only countries where the average citizen can
afford air conditioning systems and afford an extra slice of their month-
ly budgets for electricity have actually begun purchasing it within their
society – and typically these countries already have 80% to 90% pene-
tration of in-home cooling systems.
As the planet warms, more and more countries will fall into that cate-
gory of needing to spend on both heating at one point during the year
and then spending on cooling during another.
When we look at the other part of the equation, heating, which most
homes in most countries cater for already, we find that “affordability”
constrains its use. We also find that in many countries which have
“sworn” to become fully decarbonized, this will create an almost equal
capex replacement cost and a fresh burden on the electricity grid, if for
instance everyone has to move off using natural gas or wood burning
and turn to more electricity.
Some societies are struggling to cope with BOTH of these extra costs at
once – eliminating natural gas from their heating processes, and accom-
modating more cooling - and both collectively create a greater burden
for the electricity grid.

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Which countries have the biggest problems, where will people simply
choose to suffer, or change their work habits rather than spend to avoid
the effects of the elements; which countries have an obvious answer to
the grid problem staring them in the face, and which simply see it as
another intractable problem.
This report ““Warming and Cooling - double
whammy for the grid”
Forecast transition to 2050,” attempts to put
this problem into perspective for the 21 coun-
tries which represent about 84% of global elec-
tricity today, and shows which ones will be
able to both decarbonize and keep their citi-
zens comfortable.
The idea is to present each country on a case
by case basis, work from accepted numbers such as the rate at which a
country is buying air conditioners, and rate at which its government
says it can decarbonize heat, and look at that in electricity terms and
answer the question, “Where will that come from?”
There have been many attempts over the past decade to quantify the
rising tide of air conditioning and what strain it may place on the vari-
ous grids around the world, especially in under-developed countries.
In each case there are genuine problems in predicting this “strain” and
the most prominent have been efforts from the International Energy
Agency, which has assumed that very poor countries will develop a
significant middle class, which will be able to afford air conditioning
equipment to be installed in their homes, and can then afford to run
them as US citizens do, pretty much set them at a particular tempera-
ture level and leave them running throughout the summer.
What have people forecast in the past and why it is wrong

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While there are a few exceptions in Vietnam and parts of India, the as-
sumption that the western Sahara and regions like it will suddenly de-
velop an entirely new grid, with fresh generation resources in the next
30 years, and then choose to waste much of that resource on air condi-
tioning, is clearly false.
Several factors characterize the use of air conditioners and impact their
electricity consumption:
• The number of air-conditioned rooms in a home and how large they
are
• The temperature setting and its differential from the outside
• The number of hours it is turned on each day
• The price of electricity against house budgets
And these are but a few.
The largest issue is that “affordability” factor, and we test this by keep-
ing an eye on the growth in per capita GDP and its recent effect on
whether or not people suddenly “feel” wealthy enough to pay consid-
erable sums in order to be cooler, or instead if they have traditional
ways of coping with heat – for instance changing the hours of their
work day and sleeping hours to accommodate high temperatures.
Critical to this are the number of Degree Days of Cooling, which is how
most scientific studies attempt to calculate the latent demand for cool-
ing, even if they often fail to consider if the electricity is on hand to
power air conditioning, or the money is there to pay for it.
It is quite a different matter to install district cooling systems in shop-
ping precincts and businesses and hotels, but these represent a smaller
amount of cooling relative to homes and they can often be approached
using cheaper methods such as air exchangers, re-circulating under-
ground water supplies for cooling, fans and insulation, with some top-
up air conditioning only. Of course that approach cannot be used eve-
rywhere, for instance it fails in desert conditions and traditional air
conditioning must be used.

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In other words while a poor country may feel it needs to bring air con-
ditioning to its more expensive hotels and shopping centers, the key
driver of which is to stimulate business and imports, not to cool its own
citizens. In this report we are interested purely in the bulk cooling of
citizens.
Degree days and regression and projection of future degree days are a
key measure in designing for the future, for both heating and cooling
systems and naturally for planning fresh grids at scale.
Degree days are usually defined as the accumulated daily mean tem-
perature, varying from a stated base temperature (like below 18°C for
heat, or above 20°C for cooling). The way these degree days change
over time is also used as a key indicator for climate change, and if you
want to model an additional 1.5°C into a large surface areas, that too
can be done spread over the next 30 years.
This report then is a crude way of achieving that, plus the addition of
some common sense, checking the likely shift in GDP and whether that
will emerge within household earnings, and decide if this is sufficient
for the average person to pay for air conditioning.
Above and beyond all this, to do this properly you need detailed instal-
lation data of which type of air conditioners are installed or available,
those selling fastest now, and the average efficiency rating of the wider
installed base. No-one it would seem has all of this data at their dispos-
al or wants to do enough to take in all into account when forecasting
demand.
What we have done in this report is calculate what we believe is a rea-
sonable an average of Degree Days both for heating and cooling, over
the major metropolitan centers of a given territory, then ramping the
cooling days over the next 30 years, and assume a similar willingness
to spend cash on power for cooling, as there currently is to spend on
heat. That way we iron out the “affordability” issue, and try to get to
what will “actually happen.”
In countries which only have one of the problems (where heating is not
needed for instance) we have made some assumptions about how rap-

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idly electricity bills could rise, as a percentage of annual household
budgets. Each regional section will have more detail of any assump-
tions we have made.
This approach should give us sufficient awareness of the rising use of
either heating (including water heating) and air conditioning in homes
(but not in businesses or hotels, nor including refrigeration). The idea is
to attempt to quantify the real stresses that grids will be under, not pro-
vide an imaginary alarmist view that many seem to believe will hap-
pen in the very hot parts of the world.
China is supposed to have 1.1 billion air conditioning units installed
(this report has it installed in 405 million homes today), but how many
of those air con units are in hotel rooms which are systematically emp-
ty, or in offices or cinemas or shopping centers that have yet to be used
in anger?
Another thing driving the hysterical statements around air condition-
ing is the fact that global warming is reaching its critical phase in the
global climate transition. Some of the claims that are made are un-
doubtedly true – but which?
There are a combination of factors that determines whether or not a
country starts buying more air conditioning or more heating devices,
and as a consumer electronics purchase they fall under the Rethink En-
ergy consumer purchasing mantra which has been used to forecast
purchases of phones, home broadband, cars and large flat TV screens
and every other major consumer purchase – three conditions have to be
met, “I want one, I can afford one and I know someone who’s got one.”
Where these three conditions are not commonly true, there are far few-
er purchases than the IEA and others have predicted. People raise
questions about what will happen when the whole of Africa is 4 or 5
degrees hotter, and people cannot live in those temperatures – surely
they will just go out and buy air conditioners goes the argument (this
has also been a US republican argument as to why global warming
should be ignored). But while people may want one, if they cannot
afford one, or cannot afford to pay for the electricity to run one, then it
is also likely to be very true that they will not know someone who has

9. Copyright © 2021 Rethink Research, All rights reserved.
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one. So only one of the conditions for purchase remains true. If elec-
tricity is a bit “iffy” and there are constant brown outs, or there is no
cheap solar to power them, and no money to pay for more electricity
generation plants, then their purchase is utterly pointless and won’t
happen.
Consumers in Egypt, Ghana, Kenya, Nigeria and Tanzania, are not the
problem here – we agree they HAVE a global warming problem, and
they may become a future air conditioning problem as their economies
take off and economic wealth gives rise to a stronger grid, with cheap-
er and more reliable power.
But we are genuinely today facing two global electrical problems asso-
ciated with temperature – and this is largely among those countries
with rising populations, better performing economies, stable govern-
ments and an abundance of fresh construction and increasing urbani-
zation and who have a substantial financially elevated middle class.
This is true in hot countries which barely require heat during the win-
ter, and also true in cold countries which barely require air condition-
ing during the summer and this report is about identifying the likely
culprits and putting some numbers on how much more energy these
devices will suck out of their respective grids. This will allow those
countries some long term planning, rather than simply staggering
from one hike in demand to another in each successive year.
Weirdly it is countries like the UK, France, Canada, Spain, the USA
and Germany where the combined increase in electricity requirement
is going to be most keenly felt – for two distinct reasons. These are all
countries where electricity is a relatively small percentage of annual-
ized household budgets, so if they are cold in winter or hot in summer,
they can afford to fix the problem – so they have a combination of
wealth and either a low penetration of air conditioning, or a high pene-
tration of gas or oil based heating, which their governments have
sworn they will stop using, and the replacement will use energy from
the grid somehow. Some solutions will perhaps in the future be based
on hydrogen from electrolysis, but in this report we have assumed that
energy is also a drain on the grid, although it is more likely to be pro-
duced by offline, dedicated renewables.

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If you have any responsibility for long term IRPs for a utility, or long
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Rethink Energy: Taking a different view of the
energy transition
Rethink Energy is our energy service, made up of our Weekly Analysis and a
series of “breakthrough” forecasts and webinars which show the true rate at
which the Energy Transition is happening.
So far mostly US based research groups pick away at renewables, energy stor-
age and hydrogen as if they are “nice to have” which can co-exist with oil, gas
and coal – they cannot. These research firms are overly influenced by fossil
fuel thinking. Rethink Energy is the only forecaster that can see quite clearly
how the energy markets are like a circle of dominoes – push one and they all
fall over. It is very different forecasting a market that is on the edge of a preci-
pice, compared to one which is on a flat hilltop.
This year we have issued reports on how gas assets will inevitably become
stranded; a forecast on how the US acceleration in energy storage will trigger a
global uptake of the technology; how multiple “Tesla” style visionary busi-
nesses will dominate post transition stock markets; a forecast for global off-
shore wind, and two tracking statements of where we are in Wind and Solar
global installations. In all of these cases, we see the energy transition accelerat-
ing, not stalling. We see fossil fuels on death row.
Our latest report is entitled, “Warming and Cooling - double whammy for the
grid. Forecast Transition to 2050”. Buy it here.
Previous forecasts include;
• Last Chance Saloon for Gen 3 CSP
• Renewables set to unlock $2.2 trillion Green Steel Monster
• Look Back in Anger—A simplified global energy model
• Perovskites poised to disrupt solar supply chains everywhere
• Wind accelerates past nuclear, hydro in post Covid power markets
• What a difference a day makes; Biden win triggers solar acceleration
• Europe goes all in on hydrogen for the transport economy
• Energy through the looking glass | What stock markets look like on the
other side of the energy transition
• USA flying start triggers rush for Energy Storage leadership

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RETHINK LEADERSHIP
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+44 (0) 7734 037414
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caroline@rethinkresearch.biz
+44 (0)207 450 1230
www.rethinkresearch.biz

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Rethink is a thought leader in quadruple play, renewable energy, and 5G
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Published September 2021