Climate change mitigation requires the reduction of greenhouse gas emissions across the whole energy sector beyond electricity. The household sector is of particular interest since energy consumption in households was responsible for 20% and 17% of the CO2 emissions in the European Union [1] and Switzerland [2], respectively, in 2018. Heating represented 80% of the final energy consumption in Swiss households, with space heating and hot water contributing 65% and 15%, respectively. Heat supply in Switzerland is dominated by fossil fuel technologies such as fuel oil and natural gas which jointly covered 66% of space heating and 54% of domestic hot water demands [3].

Heat pumps (HPs) are currently the most promising technology to decarbonise heat supply in the household sector due to both higher thermodynamic efficiency and the possibility of using renewable technologies as an electricity source [4]. In 2017, 18% of the Swiss residential buildings were already using a HP, corresponding to more than 10% of the total heat demand [3]. Importantly, photovoltaic (PV) coupled HP systems can increase the self-sufficiency (also referred to as autarky) and self-consumption (i.e., on-site PV electricity consumption) rates of houses, and therefore become a source of local flexibility [5]. On the other hand, HP integration leads to a higher electricity peak demand [6]. As a result, the expected deployment of HPs (the number of HPs installed per year is expected to double by 2030 in Switzerland [7]) can cause stability issues on distribution grids and/or force their upgrade [8].

Why do we need energy storage?

There are various flexibility options which can help to supply renewable energy on demand and minimise the impact of HP operation on electricity grid infrastructure [9]. Among them, energy storage has attracted much attention and interestingly, the capital costs of lithium-ion batteries have decreased by an order of magnitude since 2010 [10].

Energy storage can help to tackle the mismatch between renewable energy supply and demand, and it can play the role of a generator and load depending on the flexibility needs across various physical (e.g., for an individual house and the whole country) and temporal scales (from a few minutes to seasons).

An energy system model to quantify storage needs and investments as a function of heat pump and energy retrofitting

To investigate the role of energy storage in the context of the Swiss energy transition, we developed an open-source energy system model, referred to as "GRIMSEL-AH", which minimises the total system cost (social planner perspective). This work was carried out as part of the "SwissStore" project financed by the Swiss National Science Foundation. The model includes a detailed representation of the Swiss power system and residential heating sector. It distinguishes among four different consumer types, namely residential (both single-family houses (SFH) and multi-family houses (MFH)), service (OCO) and industrial (IND) sectors, and three types of urban settings: rural, suburban and urban. To better understand energy storage needs, we define different scenario pathways for the Swiss energy sector from 2015 until 2050. We differentiate between two storage technologies, lithium-ion (LiB) and vanadium redox flow batteries (VRFB), in terms of discharge duration and cost.

We consider three different HP scenarios based on their deployment up to 2050: Market, Fossil and Full. The Full scenario assumes that the whole residential building stock in Switzerland will be exclusively heated using HPs by 2050. The Market scenario is defined based on the existing HP sales statistics and their market forecast for future years which would lead to 1.1 million HPs sold from 2015 to 2050, of which 70% correspond to existing buildings (the remaining 30% are installed in new buildings) [8]. This scenario assumes that HPs will replace 56.8% of the existing heating systems by 2050. Thirdly, the intermediate HP deployment scenario (Fossil) assumes the replacement of all fossil-based heating systems (83% in today’s building stock), namely oil and gas, with HP by 2050. Finally, we use the existing share of HP types sold from 2000 to 2018 to break down the HP capacity additions into two technologies: air source (61.5%) and ground source (38.5%) HP. For each scenario, we also use linear interpolation for HP deployment in 5-year steps between 2015 (baseline year) and 2050.

Regarding the future heat demand for the household sector, we consider three retrofitting scenarios: Base, 1% p.a. and 2% p.a.The baseline scenario (Base) is defined by taking into account only non-energy related refurbishment and the effect of a warmer future climate, which results in a heat demand of 30.3 TWh_th/year by 2050. The other two scenarios include energy retrofitting, considering a yearly rate of 1% and 2% of the building stock. Energy savings driven by retrofitting depend on the building type (single-family or multi-family houses), the urban setting (rural, suburban and urban) and the construction period (separated into decades) based on empirical evidence, ranging from 42-73% of the useful energy demand in 2015 [11]. The resulting annual heat demand is 23.5 TWh_th/year and 16.6 TWh_th/year by 2050 for the 1% p.a. and 2% p.a. scenarios, respectively.

Retrofitting buildings is prime to reduce investments in the power sector

Based on our HP and retrofitting scenarios, we see that storage technologies (lithium-ion and vanadium redox flow batteries) play an important role to support the massive deployment of HP, e.g., when they cover more than 75% of the residential heat demand (equivalent to 23.5 TWh_th/year). Moreover, we notice great synergies between PV and HP deployment, since the coupling of both technologies adds flexibility to the power sector by increasing local PV self-consumption, which results in lower overall energy costs along with a larger PV deployment.

As shown in Figure 1, with an accelerated HP deployment, our different scenario results pinpoint the importance of energy retrofitting of buildings to avoid costly storage investments (especially in suburban areas where the heat demand is the largest). Our results show that a Swiss residential sector which is fully heated by HPs is feasible and, interestingly, energy retrofitting has the largest impact on storage needs. Without energy retrofitting, more than twice the storage is needed compared to scenarios with retrofitting rates between 1-2% p.a.


Figure 1 : Optimal Solar PV (d,e,f), Li-ion battery (LiB) (a,b,c) and Vanadium Redox Flow Battery (VRFB) (g,h,i) capacities by 2050 as a function of the HP and retrofitting scenarios. We differentiate among each consumer type, Industry (IND), Office and Commercial (OCO), Multi-family house (MFH) and Single-family house (SFH) in each urban setting. Scenarios are ranked, in ascending order, by the heat demand covered by HPs.

Policy recommendations

Based on our results, we set priorities to decarbonise the residential heat demand considering that building energy retrofitting helps to avoid large investments in electricity storage. Decarbonisation plans should first target suburban areas where heat demand is the highest. Once storage needs are reduced with building retrofitting, a combination of storage technologies with both short-term (lithium-ion batteries, 2 hr.) and mid-term (vanadium redox flow batteries, 4 hr.) discharge duration is needed to minimise the energy system costs. Regarding photovoltaic, future policies should first focus on single-family houses (especially in rural areas) which show the highest unexploited photovoltaic capacity potential (for a cost-optimal solution), yet distribution grid costs should be further considered.

[This text is also available in French.]

Complete publication (open access)

Decarbonising heat with optimal PV and storage investments: A detailed sector coupling modelling framework with flexible heat pump operation. Applied Energy, 2021.
doi.org/10.1016/j.apenergy.2020.116110.

References

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