NewEnergyNews: Bringing New Energy To Heating; A Case Study

NewEnergyNews

Gleanings from the web and the world, condensed for convenience, illustrated for enlightenment, arranged for impact...

The challenge now: To make every day Earth Day.

While the OFFICE of President remains in highest regard at NewEnergyNews, the administration's position on the climate crisis makes it impossible to regard THIS president with respect. Therefore, until November 2020, the NewEnergyNews theme song:

YESTERDAY

  • Weekend Video: New Energy Needed
  • Weekend Video: New Energy From The Power Of Poop
  • Weekend Video: A Climate Crisis Plan
  • THE DAY BEFORE

  • FRIDAY WORLD HEADLINE-New Energy For The Recovery
  • FRIDAY WORLD HEADLINE-New Energy’s Pandemic Benefit
  • THE DAY BEFORE THE DAY BEFORE

    THINGS-TO-THINK-ABOUT WEDNESDAY,:

  • TTTA Wednesday-ORIGINAL REPORTING: Transactive Energy And The Value of Distributed Energy
  • TTTA Wednesday-New Energy Crosses The Political Divide
  • THE DAY BEFORE THAT

  • MONDAY STUDY: The Way To 95% New Energy By 2035
  • THE LAST DAY UP HERE

  • Holiday Weekend Video: “My Shot” from HAMILTON
  • Holiday Weekend Video: Declaration of Independence-The Backstory
  • Holiday Weekend Video: Declaration of Independence-The Words
  • --------------------------

    --------------------------

    Founding Editor Herman K. Trabish

    --------------------------

    --------------------------

    Some details about NewEnergyNews and the man behind the curtain: Herman K. Trabish, Agua Dulce, CA., Doctor with my hands, Writer with my head, Student of New Energy and Human Experience with my heart

    email: herman@NewEnergyNews.net

    -------------------

    -------------------

      A tip of the NewEnergyNews cap to Phillip Garcia for crucial assistance in the design implementation of this site. Thanks, Phillip.

    -------------------

    Pay a visit to the HARRY BOYKOFF page at Basketball Reference, sponsored by NewEnergyNews and Oil In Their Blood.

  • ---------------
  • MONDAY’S STUDY AT NewEnergyNews, July 13:
  • A Global New Energy Recovery

    Monday, May 25, 2020

    Bringing New Energy To Heating; A Case Study

    Heating Sector Transformation in Rhode Island; Pathways to Decarbonization by 2050

    Dean Murphy and Jürgen Weiss, May 2020 (The Brattle Group)

    Executive Summary

    As part of Rhode Island’s commitment to economywide decarbonization, this report examines solutions to transform the state’s heating sector. Dominated by space heating for the residential and commercial sectors, but also including water heating and industrial heating, the heating sector represents approximately one-third of the state’s overall greenhouse gas emissions.

    There are many solutions for decarbonizing the heating sector, but they fall into three broad categories:

    1. Reducing energy needs by improving building energy efficiency

    2. Replacing current fossil heating fuels with carbonneutral renewable gas or oil

    3. Replacing current fossil-fueled boilers and furnaces with electric ground source or air source heat pumps powered by carbon-free electricity

    The industrial sector may need other types of solutions, which can be very application-specific.

    To transition to decarbonized heating fast enough to meet mid-century decarbonization targets, Rhode Island will need substantial policy support. The reasons include low fossil fuel prices (particularly for natural gas), which also do not reflect the social costs of greenhouse gas emissions; switching to electrified heating solutions requires substantial initial costs for equipment and installation compared to replacing boilers or furnaces; and other more qualitative factors such as information deficits, immature supply chains, a natural reluctance by consumers to change what seems to work well.

    Rhode Island must base its policy framework for heating sector transformation on an understanding of the relative economic attractiveness of various decarbonization solutions. Figure ES 1 shows the projected range of average annual heating costs in 2050 for a representative existing single-family home in Rhode Island, using existing fossil fuels (on the left) or several alternative decarbonized heating solutions (on the right). This figure shows two key insights:

    1. For natural gas customers, who represent the majority of heating customers in the state, all of the decarbonized heating solutions will likely result in some increase in overall heating costs. This is less clear for fuel oil and propane customers. However, customer adoption of no-to-low carbon heating solutions will not take place in isolation. Viewing heating transformation within the context of broader decarbonization efforts across the electric and transportation sectors, total consumer energy expenditures are likely to be similar to what is paid today in a fossil fuel-based system.

    2. From today’s perspective, no single solution is clearly more economically attractive than the others. This is due to the high uncertainty related to how the costs of all decarbonized heating solutions will evolve over the coming decades. The heights of the bars themselves are less important than the uncertainty bands around them (represented by black bands extending above and below the tops of the bars). These uncertainty bands are largely overlapping for the decarbonized technologies, indicating that it is not clear at this point which of these technologies will be most economical in the long run.

    The analysis in Figure ES 1 assumes that as part of decarbonizing the heating sector, cost-effective energy efficiency measures such as air sealing and attic insulation will be implemented in essentially all Rhode Island buildings. Doing so lowers the challenge to decarbonize heating and saves consumers money, which is relevant for all consumers and may be particularly important for disadvantaged communities.

    This particular analysis is based on a set of “bookend” scenarios that assume for each decarbonized technology that this technology provides all heat across New England. It compares cases where fuels (gas and oil, in renewable forms) continue to primarily provide heat; or for electric heat pumps, assumes 100% adoption of either ground source heat pumps (GSHPs) or air source heat pumps (ASHPs). This captures the potential impacts of these technologies on the region’s overall energy systems. For instance, the economic attractiveness of electric heat pumps depends in part on the cost of (clean) electricity, which in turn depends on the impact that heat pumps will have on the electric system. Heat pumps themselves represent a substantial demand for electricity and can affect the price of power. Similarly, the attractiveness of renewable gas depends on its cost, which depends on the total gas volume demanded regionally and nationally, since low-cost supplies are limited.

    One important lesson from these bookend scenarios is that widespread ASHP adoption could require substantial additional investments in the regional electric power system, and could create operational challenges. At very low outside temperatures, when the need for heat is greatest, ASHPs become significantly less efficient. If ASHPs are adopted widely, this could create extremely high peak electric demand during a few very cold days.

    Since such bookend scenarios are unlikely to represent actual adoption of decarbonized heating solutions, Figure ES 2 shows how the results might change under one of many possible more-balanced adoption scenarios. This example shows a scenario that assumes that by 2050, electric heat pumps (one-third each by ASHPs and GSHPs) are providing two-thirds of heating; that (renewable) gas – which loses only 50% of volume relative to today – is providing most of the remaining heat; and that oil is providing the remaining amount.

    This more mixed adoption of all the decarbonized heating solutions partially mitigates the extreme impact of 100% ASHP adoption on electric system peaks (and the resulting cost of electricity), making ASHPs relatively more attractive. On the other hand, reducing delivered gas volumes, due to increasing energy efficiency or conversions to electrified heat, could increase the delivery cost of renewable gas, making it relatively less attractive. But, importantly, the more balanced adoption pattern of the Mixed Scenario does not alter the basic conclusion that no decarbonization solution is clearly preferred. The uncertainty ranges of the decarbonized technologies still largely overlap one another. Because the relative attractiveness of heating decarbonization solutions is sensitive to a) peak electric impacts and b) gas volume impacts, developing a better understanding of these effects, and opportunities to mitigate them, will be an important policy focus in the coming years.

    Finally, the decarbonization of heating will not take place in isolation. Rather, it is embedded in broader economy-wide decarbonization efforts, including a likely shift toward electrified transportation. Heating decarbonization, and in particular the level of electric heat pump penetration, can affect electricity prices. This could have broader impacts on consumers’ “energy wallet” – their total energy expenditures on baseline electricity consumption and electric vehicle (EV) charging, in addition to heating. However, changes in heating costs could be offset or exacerbated by impacts on other elements of the energy wallet, particularly transportation. EVs are expected – at least by 2050 – to have lower operating costs than current internal combustion engines.

    Figure ES 3 compares a representative consumer’s energy wallet spending today with what energy spending might look like by 2050, considering the various decarbonized heating solutions. The figure indicates that the attractiveness of ASHPs would not decrease substantially when considering the overall energy wallet. It also shows that, compared to 2020, any potential increase in heating cost could be at least partly offset by cost decreases elsewhere in the energy wallet, and by savings through energy efficiency. This does not mean that individual consumers or businesses will not see changes in their heating (and energy wallet) costs. Policy likely plays a key role in mitigating any potential cost increases, particularly where it may affect populations or industries that are vulnerable to increasing energy costs (and thus could be reflected in the state’s economy).

    The same broad conclusions apply to space heating uses in other settings, such as larger (multifamily) residential and commercial buildings, as well as to domestic water heating. Finally, various decarbonization solutions also exist for the remaining smaller uses of heat, such as electric cooking and clothes drying.

    FIVE THEMES TO GUIDE RHODE ISLAND’S PATH FORWARD

    The conclusion of this quantitative assessment of the relative attractiveness of various heating decarbonization solutions in Rhode Island is that, at present, there is no clear winning approach. Rather, the relative attractiveness of decarbonizing heating in the state depends on the evolution of the relevant costs – renewable gas, renewable oil, ASHPs, and GSHPs – which are highly uncertain today. Also, the attractiveness of the solutions in specific instances will depend on the particular context – the particular building, location, or application. In addition, each of the decarbonization solutions faces unique adoption and implementation challenges that Rhode Island will need to address to enable broad adoption over time.

    This implies that, for policy to support Rhode Island’s heating sector transformation, the next 10 years should not focus on advancing a single or limited set of solutions. Instead, Rhode Island should ensure that it is making progress, regardless of which solution (or mix of solutions) ultimately prevails. As illustrated in Figure ES 4, a policy framework for the next 10 years should involve five elements: Ensure, Learn, Inform, Enable, and Plan.

    As an initial step to ensure decarbonization, improving the energy efficiency of buildings will provide several immediate benefits. By reducing heat needs, it will reduce greenhouse gas emissions, regardless of what heating technology is utilized (and to the extent heating is electrified, improved building efficiency will reduce heating’s impact on electric loads). Importantly, cost-effective energy efficiency measures will reduce the total cost of heating, which will mitigate any potential increase in the cost of providing heat with decarbonized solutions. Finally, existing efficiency programs provide an effective program delivery network that can support the state’s expanded heating-sectorrelated decarbonization efforts.

    A second key policy element that will ensure progress towards decarbonizing the heating sector is enacting a set of technology-neutral measures that will reduce the carbon intensity of all energy sources used for heating – electricity, gas, oil, and propane – over time. Such measures may include renewable electricity requirements, carbon pricing or cap and trade policies, renewable fuel or heating standards, or other approaches. Complementary fuel-neutral policies include continued and increased efforts to improve the energy efficiency of Rhode Island’s existing buildings, while also tightening the efficiency requirements for new construction.

    Rhode Island must emphasize learning over the next decade, given the large uncertainties about both general and state-specific factors related to each of the decarbonized solutions and their implementation. Learning strategies should use pilot and demonstration projects, targeting state-specific issues or in collaboration for more general issues. At a minimum, learning policies should include:

    • Information gathering to enable better incentive targeting (such as information on the type and age of heating-related equipment in the state)

    • Proper research and development targeting Rhode Island-specific issues

    • More general information in collaboration with other states or organizations

    Rhode Island must inform key stakeholders, including consumers and the building trades, about the technical and economic issues related to decarbonized heat solutions that will require significant efforts to improve information level and flow. Potential policies in this area include broad information campaigns about the available solutions, including their pros and cons; publicly visible demonstration projects; developing training and certification programs for installers; and making information about qualified and experienced installers available to consumers.

    Policymakers will need to enact several additional strategies to enable a heating sector transformation. These include policies that identify and address the implementation barriers, which may take the form of incentives to consumers and businesses designed to overcome both overall cost and especially first cost barriers, such as the high upfront cost of heat pumps. In addition, Rhode Island should realign its regulatory frameworks. Examples include removing existing incentives that favor gas system expansion, reconsidering rate structures for both electricity and gas, and exploring ways to integrate the regulatory treatment of National Grid’s gas and electric businesses.

    Another important enabling policy principle relates to identifying and capitalizing on “natural investment opportunities” where decarbonized solutions may be implemented at a lower cost and with less disruption by coordinating with other work being done on the infrastructure or building. Examples include instances where natural gas or electricity infrastructure is being upgraded or replaced, buildings undergoing deep renovations, or existing heating equipment that needs to be replaced as it approaches the end of its useful life. Policies that enable progress can also target existing codes, rules, etc. that may inadvertently create barriers to deploying decarbonized heating solutions that are otherwise attractive. Finally, enabling policies should identify and mitigate instances where heating decarbonization could impose undue burdens on vulnerable populations.

    Planning will also be important. Changes to current planning approaches and some specific planning efforts will need to be part of the heating transformation strategy. In general, planning efforts should consider a long time horizon – 2050 or beyond – even if a typical planning exercise might only cover the next 10 years. This will allow Rhode Island to plan for the magnitude of changes needed to decarbonize the heating sector by mid-century, and account for the long lives of most heating-related infrastructure – buildings; pipelines; electric transmission and distribution equipment; GSHP ground loops; and even furnaces, boilers, and heat pumps themselves.

    Also, some specific planning efforts will be necessary. An example is planning for the expansion of the electric distribution grid. Significant new electric loads are likely to come online over the next several decades, not just for heat but also for EV charging. This provides an opportunity to better understand the tradeoffs between “future-proofing” the grid by anticipating additional future demands, vs. planning only for nearterm demands, which may lead to a series of smaller upgrades that could ultimately cost more. Similarly, even ahead of any clarity about the long-term role of the gas distribution system, developing plans for how the gas system might be altered to accommodate reduced gas use for heating, and whether there may be ways to do it more economically, will help inform the decisions that Rhode Island must undertake over the next few decades.

    This report identifies several important technical issues that will affect the transformation of the heating sector. These include the potential impacts of electrified heat on the power sector, and the future role of the gas system and how reduced gas delivery volumes could affect it. These insights support an economic analysis of the different pathways to decarbonize heating – using renewable fuels with heating infrastructure similar to today’s, or alternatively, electrifying heat with GSHP or ASHP.

    That analysis showed that there is substantial overlapping uncertainty about the future economic attractiveness of the decarbonized solutions – regarding the long-run cost of renewable fuels (which is likely to be substantially above the current cost of fossil fuels), as well as the cost of heat pumps themselves and the clean electricity to power them. Because of these overlapping uncertainties, it is not possible to identify a clear winner among the technologies. However, it appears that decarbonized heat is likely to be somewhat more costly than natural gas heat is today, and potentially comparable with oil or propane. Still, overall consumer expenditures on energy in a fully decarbonized economy may be roughly comparable to today’s costs.

    This has several policy implications for driving a heating sector transformation over the next several decades. Policy approaches should support enabling early progress on decarbonization – by pursuing energy efficiency to reduce heat needs, and by decarbonizing all the energy sources used for heating – both fuels such as gas and oil, and also electricity to power new electrified heating systems. Beyond this, policies should support both the learning and informing stages, to begin to address the uncertainties, collect information that will be necessary for the transformation, and ensure a widespread understanding of the solutions and their implications. Regulatory changes can enable the transformation, addressing barriers and facilitating progress on any or all of the pathways. Policies that create structures to identify and capitalize on natural investment opportunities will also enable the transformation.

    Broadening planning approaches for both the electric and gas systems will allow policymakers to consider longer time horizons consistent with the natural lives of heating infrastructure components and the timeframe and magnitude of the transformation. While it seems counterintuitive, Rhode Island must develop action plans knowing that it might not ultimately need them, since developing the plans will inform decisions about whether to implement them. The transformation of the heating sector over the next several decades will be a major undertaking, but it is achievable with early and sustained policy focus.

    0 Comments:

    Post a Comment

    << Home