The decarbonization challenge in buildings is to create a comfortable and healthy indoor climate in a carbon-neutral society. Cost-effective decarbonization requires a balanced approach, where
efficiency measures that reduce the demand for heating and cooling are balanced with decarbonization measures that radically change how we heat and cool our buildings. Combining both types of measures creates synergies: for example, well-insulated buildings (an efficiency measure) require smaller heat pumps (lower CAPEX) that can operate at lower temperatures, resulting in higher heat supply efficiency (lower OPEX). The golden rule is, “Do not go too far with any specific measure.” Isn’t that what balancing is about?
The solution is “and-and.” However, multiple technically feasible combinations exist. How to choose? Where to find the right balance? A sustainable energy transition is all-inclusive, so we need to find the optimal balance in interaction with other sectors. System integration is key!
Paths 2050: A Study of Multisectorial Optimization
To find the optimal balance across different sectors, models are needed. The Paths 2050 study identified what a climate-neutral society in Belgium in 2050 would look like, and what it takes to get there, for three different net-zero emission scenarios: (1) the central scenario consists of a balanced set of technological options (energy efficiency, fuel substitution, electrification, synthetic molecules, carbon removal) across the Belgian board, (2) the electrification scenario has access to more offshore wind (extra 16 GW as of 2030) and the option to invest in a new generation of nuclear small modular reactors (operation as of 2050), and (3) the clean molecules scenario can import synthetic molecules at lower cost and has a more limited access to cross-border CO2 storage. The model aimed to find the most cost-effective solution to meet the demand for energy services from today through 2050. As shown in Figure 1, all three scenarios led to the same choices for final energy demand in the building sector (residential and commercial) in 2050:
- A complete phase-out of fossil fuels (whereas today more than 65% of the final energy demand is still represented by natural gas and fuel oil)
- A more than 40% reduction in final energy demand (or increase in efficiency)
- A clear switch to heat pumps and district heating (with electricity representing 89% of the final energy use)
The modeling also found that no hydrogen (or clean molecules) will be used in the building sector, in agreement with recent results from the International Energy Agency. What differs among the scenarios is the total annual cost (see Figure 2), which was lowest for the electrification scenario. We can thus conclude that the choices made in one sector highly influence the cost of actions to be taken in another sector. For example, the choice for investments in off-shore wind and new nuclear technology (electrification scenario) in the electricity sector leads to lower investment needs in home battery systems due to lower solar PV investments, and a partial switch from heat pump systems for water heating to cheaper resistance heaters due to the lower electricity generation cost (and wholesale prices). Consequently, decarbonization in the building sector can be done at a lower cost, thanks to decisions made in the electricity sector. Given that a cost-effective decarbonization path needs a multi-sectorial optimization, the optimization results should feed policymaking, such that the proper actions can be taken to incentivize investors and citizens in the right direction. This multi-sectorial optimization is the core of system integration.
Figure 1: The evolution of final energy demand (TWh) in residential and commercial buildings for the three scenarios (central, electrification and clean molecules) defined in PATHS 2050
Figure 2: The evolution of total annual cost (M€) in residential and commercial buildings for the three scenarios (central, electrification and clean molecules) defined in PATHS 2050
A Central Role for Heat Pumps
All studies agree that for the built environment, electrification or heatpumpification is clearly the way to go, either as local individual heat pumps or as centralized collective heat pumps, together with the use of residual heat and geothermal heat in collective systems for district heating. RES (renewable energy sources) becomes R2ES (residual and renewable energy sources) for the built (and industrial) environment. The heat pump is not new as technology; it is the same device as a refrigerator and is more than 200 years old. Advanced heat pump technology mainly refers to higher performance, smart and flexible features to benefit from system integration, noise reduction, more compact design, improved ease of installation, and lower environmental footprints associated with the materials and refrigerants used.
Worldwide, sales of heat pumps in buildings are growing, with North America having the most heat pumps installed, China having the largest market, and the European Union being the fastest-growing market. However, a crucial factor that determines the economic feasibility of heat pumps for customers is the electricity/gas price ratio, which has varied significantly in recent years, both geographically and temporally, and is not always optimal for heat pump adoption.
The Power of System Integration
When heat pumps are installed on a large scale, the additional electricity demand (and peak) will be significant. The share of variable RES in the electricity generation system will also be steadily increasing, and both require additional grid expansion and demand flexibility. Again, the solution is “and-and,” not “either-or.” On the demand side, flexibility can be offered by:
- Grid-interactive, efficient (smart) buildings (with thermal mass)
- District heating networks including thermal energy storage, collective and hybrid systems
- Heat pumps (centralized and local) connecting electrical and thermal energy
To exploit this flexibility an effective system integrator is needed that co-optimizes the needs of building occupants and the grid, leading to multiple gains: cost reduction, enhanced reliability and resilience, reduced emissions, reduced peak loads, moderate demand ramping, grid services, enhanced energy efficiency, and R2ES integration.
This smart system integrator needs to know the system (and its disturbances), to be able to anticipate demand and supply based on forecasts, and to automatically optimize an objective using an algorithm, thereby exploiting system flexibility. This is exactly what model predictive control (MPC) does, as illustrated in Figure 3.
Currently, MPC is applied to large commercial buildings to guarantee comfort while minimizing energy use or cost with excellent results. Current research looks at MPC applied to clusters of buildings, including thermal networks and extending to multi-energy vector systems, unlocking the potential of flexibility. Flexibility drives sector coupling and energy system integration, leading to huge benefits: thermal and electrical energy vectors help each other to increase the R2ES share, thereby reducing emissions, the dependency on oil and gas, and the total cost. Unlocking flexibility by system integration is thus key to cost-effective decarbonization of all sectors.
The author acknowledges EnergyVille-Vito for sharing their results of the PATHS 2050 study and the permission to use their figures.
Lieve Helsen
Professor, KU Leuven
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