Decarbonising low grade heat for low carbon future

Abstract

More energy is consumed in the UK for heat than either transport or electricity and yet until recently little attention has been given to decarbonising heat to meet the UK's 2050 greenhouse gas targets. The challenges are immense as over 80% of households in the UK use gas for space and water heating. To achieve the UK's greenhouse gas targets will necessitate heat to be almost completely decarbonised and will thus require a transition from gas for heating to a low carbon alternative. However, there is a lack of consensus over which low carbon heat technologies householders should be encouraged to adopt as projections of these vary significantly. This thesis commences by reviewing those projections and identifying the possible reasons for the variations. Low carbon heat technologies suitable for large scale deployment are identified and a heat demand model developed from which demand profiles can be constructed. An integrated heat and electricity investment model is then developed which includes electricity generation assets but also district heating assets such as combined heat and power plant, network storage and large network heat pumps. A core input into this model is the heat demand profiles. The investment model enables the interaction between heat and electricity assets to be evaluated and so using scenarios combined with sensitivities examines the economics and carbon emissions of the low carbon residential heating technologies previously identified. Throughout this analysis the equivalent cost for gas heating is used as a comparator. The results suggest that district heating is an attractive option which is robust under most outcomes. However, its economic viability is crucially dependent on a financing regime that is compatible with other network based assets. Also identified is a role for electric storage heaters for buildings with low heat demand.