Impact of climate change on the cost-optimal mix of decentralised heat pump and gas boiler technologies in Europe. (May 2020)

• Record Type: Journal Article
• Authors: Kozarcanin, S.; Hanna, R.; Staffell, I.; Gross, R.; Andresen, G.B.
• Is Part Of: Energy policy. Volume 140(2020)
• Publication Date: 2020-05
• Subjects: Climate change -- Decentralised heating -- Cost-optimisation -- IPCC -- EURO-CORDEX -- Policy; Energy policy -- Periodicals; Politique énergétique -- Périodiques; Electronic journals; 333.79
• DOI: 10.1016/j.enpol.2020.111386
• Languages: English
• ISSNs: 0301-4215

Abstract

Abstract: Residential demands for space heating and hot water account for 31% of the total European energy demand. Space heating is highly dependent on ambient conditions and susceptible to climate change. We adopt a techno-economic standpoint and assess the impact of climate change on decentralised heating demand and the cost-optimal mix of heat pump and gas boiler technologies. Temperature data with high spatial resolution from nine climate models implementing three Representative Concentration Pathways from IPCC are used to estimate climate induced changes in the European demand side for heating. The demand side is modelled by the proxy of heating-degree days. The supply side is modelled by using a screening curve approach to the economics of heat generation. We find that space heating demand decreases by about 16%, 24% and 42% in low, intermediate and extreme global warming scenarios. When considering historic weather data, we find a heterogeneous mix of technologies are cost-optimal, depending on the heating load factor (number of full-load hours per year). Increasing ambient temperatures toward the end-century improve the economic performance of heat pumps in all concentration pathways. Cost optimal technologies broadly correspond to heat markets and policies in Europe, with some exceptions. Highlights: Increasing global warming decreases the need for space heating. Current climatic conditions favour gas boilers and heat pumps. Climate change makes heat pumps more cost competitive and gas boilers less. Heat policies in Europe are broadly consistent with cost-optimal technologies. In several countries, cost-optimal technologies and real deployment do not match.