A whole-system approach for quantifying the value of smart electrification for decarbonising heating in buildings

This paper uses a whole system approach to examine system design and planning strategies that enhance the system value of electrifying heating and identify trade-offs between consumers’ investment and infrastructure requirements for decarbonising heating in buildings. We present a novel integrated model of heat, electricity and gas systems, HEGIT, to investigate different heat electrification strategies using the UK as the case study from two perspectives: (i) a system planning perspective regarding the scope and timing of electrification; and (ii) a demand-side perspective regarding the operational and investment schemes on the consumer side. Our results indicate that complete electrification of heating increases peak electricity demand by 170%, resulting in a 160% increase in the required installed capacity in the electricity grid. However, this effect can be moderated by implementing smart demand-side schemes. Grid integration of heat pumps combined with thermal storage at the consumer-end was shown to unlock significant potential for diurnal load shifting, thereby reducing the electricity grid reinforcement requirements. For example, our results show that a 5 b£ investment in such demand-side flexibility schemes can reduce the total system transition cost by about 22 b£ compared to the case of relying solely on supply-side flexibility. In such a case, it is also possible to reduce consumer investment by lowering the output temperature of heat pumps from 55 °C to 45 °C and sharing the heating duty with electric resistance heaters. Furthermore, our results suggest that, when used at a domestic scale, ground-source heat pumps offer limited system value since their advantages (lower peak demand and reduced variations in electric heating loads) can instead be provided by grid-integration of air-source heat pumps and increased thermal storage capacity at a lower cost to consumers and with additional flexibility benefits for the electricity grid. Lastly, our results show that, regardless of consumers’ investment and operation decisions, the UK electricity grid can reliably accommodate close to 50% of the heating demand, but this can be increased to about 75% by implementing smart operation schemes at the consumer end