Opinion - 13/August/2018

Policy action needed to decarbonise residential heating by 2050

Residential heating is a massive consumer of energy worldwide. The technology exists to alter this, but policy makers need to give the sector much more attention to ensure real change, says Florian Knobloch from Radboud University Nijmegen

The technology to massively reduce emissions from heating exists. But without much greater attention from policy makers the world over, the sector will continue to pollute needlessly and fail to contribute fully to the clean energy transition, argues Florian Knobloch from Radboud University Nijmegen, Netherlands

 

Limiting global warming to 1.5°C, the ambitious aim stated in the Paris climate agreement, requires the quickest possible reduction of all carbon dioxide (CO2) emissions. Climate change mitigation scenarios show this means decreasing emissions in residential buildings by 85–95% by 2050, relative to their current level. Meeting this challenge crucially depends on heating, which accounts for 56% of energy demand in homes globally and is responsible for most of their direct CO2 emissions. The challenge is even greater given the limited policy attention residential heating receives in most countries compared to electricity generation or transport. Our research shows, however, that a rapid change of attitude could yield impressive results.

From a technical perspective, heating can be made much more energy efficient, most simply by improving the thermal insulation of houses. Since 50% of current buildings will still be standing in 2050 (even 75% in the most developed countries), retrofitting existing houses is of primary importance. Insulation on its own is, however, insufficient for deep decarbonisation since even when buildings are much better insulated, they still need to be heated. In addition, water heating accounts for 40% of global heat demand, a figure projected to rise in many developing countries as incomes grow, and insulation has very little impact on this.

Near zero emissions are therefore unachievable without the widespread uptake of low-carbon heating technologies, such as solar thermal panels, heat pumps or modern biomass systems. These can either be installed within homes or as part of district heating systems.

The technologies to make this happen are already available and renewables for heating are highly efficient. Unfortunately, though, they tend to be capital-intensive. Policy support is therefore required to ensure their cost competitiveness with incumbent fossil fuel technologies and to generate the right incentives to change household choices. This is especially important since deep decarbonisation will likely require the premature replacement of still functioning heating systems.

Homeowners, landlords and district heating system managers all have their own opinions, prejudices and limited information about heating options. Research shows that decisions about heating systems are not purely cost-driven. People tend to stick to status quo solutions, follow social norms or the behaviour of their peers. And behavioural research indicates that households only consider replacements when they see the possibility of recovering the necessary investment in less than three years.

Even the right policies do not lead to overnight revolutions, but rather engender gradual change: households need time to learn about new technologies, while installers and industry must adjust their know-how and production capacities.

The picture is complicated even further given that once installed, heating systems remain in place for 20 years or longer, meaning that less than 5% are replaced each year and so the window of opportunity for change is extremely small. Without policy action, many of the systems installed in the near future will survive and emit C02 until 2050.

 

Pick and mix

In a recent study, we simulated the choices of heating technologies by households across the globe, assuming the implementation of different policy packages from 2020 onwards. Our results suggest that near zero decarbonisation is achievable by 2050, but requires an immediate ramp-up of low-carbon investments and is very unlikely without substantial policy efforts. When exclusively relying on carbon taxation, decarbonisation requires tax rates in the order of €100-400 per tonne of CO2. This is much higher than the current carbon price of around €15 per tonne under the EU Emissions Trading Scheme, though similar to existing carbon tax rates in France or Sweden of €110 per tonne of CO2. In countries with higher carbon prices, renewable heating is growing faster than elsewhere. Further, such taxes are easier for governments to implement than cap-and-trade schemes and have a more direct impact on households.

The transition to renewables could reduce average heating costs by 2030/2040, but in the coming years, financial support schemes will be vital to enable a move away from fossil fuels. Indeed, they may determine the political acceptability of decarbonisation policies. These should include help for low-income households to replace their heating systems and regulations for rented houses to ensure that tenants are not disadvantaged if landlords refuse to invest in renewables.

A mixture of policies will be most effective to drive the market for more efficient technologies, reducing energy demand and cost burdens for households, compared to a carbon tax on its own. Subsidy payments to homeowners have spurred enormous growth in solar thermal heating in China, where more solar thermal heating systems are now installed than in the rest of the world combined.

Given the lack of policy action until now aimed at decarbonising the heating sector, some uncertainty remains around what will have the most impact on behavioural change. Further research and constant evaluation is therefore necessary. What is clear, though, is the lack of any silver bullet and the need for a mixture of policies tailored to each country’s specific situation, leading potentially to different technology mixes in different parts of the world.

Link to the research paper: https://link.springer.com/article/10.1007/s12053-018-9710-0 (open access)

 

Photo: European Union


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