How the pace of residential heat electrification impacts the energy system?

Calvillo Munoz, Christian and Katris, Antonios and Alabi, Oluwafisayo and Stewart, Jamie and Zhou, Long and Turner, Karen (2022) How the pace of residential heat electrification impacts the energy system? In: 17th IAEE European Conference, 2022-09-21 - 2022-09-24, The American College of Greece.

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Abstract

Heating buildings is the source of nearly a quarter of UK emissions (UK Government, 2021a). Thus, meeting net zero will involve virtually all heat in buildings to be decarbonised. In their Heat and buildings strategy, the UK Government (2021b) set out its plans to deliver at least 600,000 heat pump systems per year by 2028. This will involve significant changes to the energy system - including the upgrade of the energy networks and increasing renewable energy generation capacity - alongside the installation of new heating systems in people’s homes. Understanding how these costs are distributed, where benefits might accrue and how the wider economy might be impacted will be key. These questions are set within a quickly changing policy environment where for example, surging global gas prices have driven a significant increase to the energy price cap for GB energy consumers. Although the significant increase in international gas prices has markedly narrowed the gap between the cost of electricity and gas, this price differential - where consumers currently pay significantly more per unit of energy for electricity - remains an important factor for understanding how different decarbonisation options will affect the affordability of heating systems. Many studies have been developed to analyse the impact of heat electrification. However, most of them do not consider different heat pump adoption pathways and normally they only analyse the implications of a large penetration of heat electrification in the power sector, not considering, for example, the changes on emissions, energy use and consumer costs. The work developed in this paper aims to provide insight on this issue, analysing the implications of the electrification of residential heat under different adoption pathways, using the UK TIMES energy system model. Preliminary results show that the speed in which heat pumps are rolled out can have important impacts on energy use, emissions and the level of network investments, and thus higher costs for the final consumer.

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