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Challenging of Decarbonizing Heat in Existing Buildings

Challenging of Decarbonizing Heat in Existing Buildings

Background

Aiming for economy-wide carbon neutrality, countries will need to turn its attention to an overlooked corner of the emissions picture: the fossil fuels widely used to heat the buildings. And as the electric grid gets cleaner over time, the share of building emissions from onsite fossil fuel use will only increase, making heating and hot water the lion’s share of emissions from energy use in buildings. Shifting toward clean electric heat in homes and businesses will be key to the efforts to reduce carbon and air pollution.The heating transition process is accelerating, and market trends are converging right now to create strong foundations for success. This article sheds some lights on importance, barriers, opportunities and outlook of this timely subject.

1. Importance of existing heating stock transition

i) Switching to electric heat and hot water will have a significant impact on reducing gas use in buildings.

ii) Electric heat and hot water will also save consumers in energy costs over the life of the equipment, particularly if the new systems are used alongside improvements in energy efficiency and utility policies that help customers take advantage of off-peak pricing.

iii) In older homes without solar, electric heating would be cost-competitive with gas when combined with simple energy efficiency improvements, such as attic insulation and air sealing.

iv) Clean heating can also improve health, safety, and comfort. Electric heating technologies improve indoor air quality by avoiding indoor combustion emissions that can cause headaches, fatigue, queasiness, eye, nose, and throat irritation, and serious lung disease.

v) Heat pumps can also increase home comfort by operating virtually silently and providing more stable temperatures.

2. Barriers of existing heating stock transition

i) The natural gas boiler market remains largely unchallenged, while awareness of as well as trust in low carbon alternatives remains limited.

ii) End-users are not ready to decarbonized heat on their own due to the generally high upfront cost of low carbon appliances. Electric air/water heat pumps, gas heat pumps, hybrid heat pumps, micro combined heat and power or similar can be three to ten times higher than for a gas boiler. Therefore, existing homes need incentives mean to encourage some steps to be taken towards replacement.

iii) There are inherent technical challenges with replacing a boiler with a lower carbon system in existing buildings.

iv) The heating market is slow moving with stubbornly low replacement rates.

3. Opportunities of existing heating stock transition

Four macro trends converging in the 2020s to create strong conditions for the acceleration of decarbonization of heat in existing buildings:

i) Policy support for decarbonization of heat in existing buildings is growing and is beginning to influence heating system buying decisions. Some national policies are strongly incentivizing low carbon heating in existing buildings.

ii) Public awareness of the need for transition is accelerating. The proportion of people who have taken action to fight climate change, such as buying more energy efficient appliances, has increased considerably in the last few years. there is more talk of fossil fuel -bans in the media, and renewable heating subsidies support households in making more sustainable choices.

iii) Innovative technology solutions are emerging which are better suited to existing buildings. A wide range of efficient low carbon heating systems are now on the market – to suit most buildings. These include Hybrid heat pumps (fossil boiler + heat pump), High temperature electric heating pumps, Fuel cell micro combined heat and power: ,Gas heat pumps ,Hydrogen-ready boilers ,Self-powering boilers, Plug-and-play and modular approaches .

iv) New business models like Heat as a Service are changing the way heat is sold – and creating decarbonization opportunities. The traditional heating market business models are being upended by new, customer-centric approaches, moving from shifting boxes to selling services. This fundamental shift towards services in the heating market can be the catalyst needed for accelerated growth of low carbon heating in existing buildings. End-users are becoming more comfortable with buying everything as a service including heat.

4- Outlook for of existing heating stock transitions

Despite the challenges, one see decarbonizing heat in existing buildings is shaping up to be one the biggest battles of the 2020s in the new energy market and now is the time to prepare to capture a share. This is due to:

i) Policy-makers at national and local level are all laying increasingly ambitious plans to decarbonize heat, not only in new build segment, but more and more on retrofit the existing buildings.

ii)The signs are that more green finance could become more readily available, which could be a key enabler of business models to accelerate the heating transition in existing buildings.

iii) Heating system technology is becoming more and more retrofittable , more compact, more plug and play, and more digital.

iv)There is already experience from the market on how to design Heat as a Service offerings today to make them cost-competitive and drive existing heating stock transitions.

 

 

Discussions

Matt Chester's picture
Matt Chester on Oct 26, 2020

Heating system technology is becoming more and more retrofittable , more compact, more plug and play, and more digital.

This is the biggest takeaway, I think-- the more that the tech can be made modular and plug & play, the less inertia there will be for retrofits in existing buildings and the more quickly the new/existing building stocks will turn over. 

Dr. Amal Khashab's picture
Dr. Amal Khashab on Oct 26, 2020

Hi Matt

Absolutely right. 

Thanks for your comment.

 

Dr. Amal Khashab's picture

Thank Dr. Amal for the Post!

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