Enhanced Heating and Cooling Plans to Quantify the Impact of Increased Energy Efficiency in EU Member States

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1 Project No: IEE/13/650 Enhanced Heating and Cooling Plans to Quantify the Impact of Increased Energy Efficiency in EU Member States Translating the Heat Roadmap Europe Methodology to Member State Level Work Package 2 Main Report: Executive Summary

2 Authors: Contact: David Connolly, Work Package 2 Coordinator, Aalborg University Kenneth Hansen, Aalborg University David Drysdale, Aalborg University Henrik Lund, Aalborg University Brian Vad Mathiesen, Aalborg University Sven Werner, Halmstad University Urban Persson, Halmstad University Bernd Möller, University of Flensburg Ole Garcia Wilke, University of Flensburg Kjell Bettgenhäuser, Ecofys Willemijn Pouwels, Ecofys Thomas Boermans, Ecofys Tomislav Novosel, FAMENA, University of Zagreb Goran Krajačić, FAMENA, University of Zagreb Neven Duić, FAMENA, University of Zagreb Daniel Trier, PlanEnergi Daniel Møller, PlanEnergi Anders Michael Odgaard, PlanEnergi Linn Laurberg Jensen, PlanEnergi Aalborg University, Denmark A.C. Meyers Vænge 15 DK-2450 Copenhagen T: david@plan.aau.dk Web: Deliverable No. D 2.2: Public Document. The STRATEGO project (Multi-level actions for enhanced Heating & Cooling plans) is supported by the Intelligent Energy Europe Programme. The sole responsibility for the content of this document lies with the authors. It does not necessarily reflect the opinion of the funding authorities. The funding authorities are not responsible for any use that may be made of the information contained therein. STRATEGO Website: Heat Roadmap Europe Website: Online Maps: ii

3 Executive Summary The STRATEGO WP2 main report quantifies the impact of implementing various energy efficiency measures in the heating and cooling sectors of five EU Member States: Czech Republic, Croatia, Italy, Romania, and the United Kingdom. These countries vary considerably in terms of population, climate, resources, and energy supply, so the key results, conclusions, and recommendations presented in this report can inform national energy policy across all of Europe. The results from this study indicate that a total investment of approximately 1.1 trillion in energy efficiency measures across all five of these countries, between 2010 and 2050, will save enough fuel to reduce the costs of their energy systems. After considering both the initial investment and the resulting savings, the total annual cost of the heating, cooling, and electricity sectors is reduced by an average of ~15% in each country (see Figure 1). These initial investments are primarily required in heat savings for the buildings, district heating in urban areas, and electric heat pumps in rural areas. In essence, energy efficiency measures in the heating sector will enable EU Member States to simultaneously reduce energy demand, imported fossil fuels, carbon dioxide emissions, and the cost of the heating, cooling, and electricity sectors (see Figure 1). New Energy Efficiency Investments Heat Savings ~ 600 Billion All Five STRATEGO Countries Annual Change for Heating, Cooling, & Electricity Sectors Energy -30% District Heating* ~ 275 Billion Total Additional Energy Efficiency Investments Between 2010 & 2050 ~ 1.1 Trillion Carbon Dioxide -50% Individual Heat Pumps ~ 225 Billion Costs -15% Figure 1: Key investments and main results for all five STRATEGO countries combined. *This includes district heating supply technologies, pipes, and substations. It excludes the investments required to maintain existing district heating infrastructure. 1

4 Aim in STRATEGO WP2 The overall aim of the STRATEGO project is to support local and national authorities in the implementation of more efficient heating and cooling solutions. This support is provided in a variety of ways throughout the different work packages (WPs). WP2, which is the focus in this report, supports the development of advanced National Heating and Cooling Plans (NHCP), which are required under Article 14 of the European Commission s Energy Efficiency Directive. STRATEGO WP2 builds on the two previous Heat Roadmap Europe reports ( which analysed alternatives for the heating sector at EU scale. In STRATEGO WP2, the Heat Roadmap Europe methodology is enhanced and applied here at a Member State level rather than for all of Europe together. The overall aim in STRATEGO WP2 is to develop low-carbon heating and cooling strategies, which are called Heat Roadmaps, and subsequently to quantify the impact of implementing them at a national level for five EU Member States, which are the Czech Republic, Croatia, Italy, Romania, and the United Kingdom. STRATEGO WP2 has fulfilled this aim by combining results from nine Background Reports together in this main report for each of these five countries. The Background Reports provide detailed information about the current and future energy system, including: The structure and scale of the existing and future energy system (Background Report 1) The hourly pattern of demand and supply across heating, cooling, and electricity (Background Report 2) The current heating and cooling demands in the buildings (Background Reports 4 and 5) The future development of the heating and cooling demands in the buildings (Background Reports 3 and 4) The location of the heating and cooling demand on a 1 km 2 resolution (see Figure 2), which is subsequently used to identify the potential to expand district heating and cooling (Background Reports 6 and 7) The potential renewable energy resources available (Background Reports 7, 8, and 9) All of this information is combined in this main report using an energy model, called EnergyPLAN ( which simulates the hourly operation of the heating, cooling, electricity, industry, and transport sectors over a single year. Using EnergyPLAN, the current and future energy system for each of the STRATEGO countries is replicated based on the historical year 2010 (Ref 2010), and based on a future Business-As-Usual forecast by the European Commission for the year 2050 (BAU 2050). These two scenarios represent where we are today and where we are likely to end up, if we continue using energy in the same way in the future as we do today. Afterwards, a Heat Roadmap scenario is created for each country for the year 2050 (HR 2050), by adding more energy efficiency measures to the heating sector in the original BAU 2050 scenario. By comparing the HR 2050 scenario with the BAU 2050 scenario, the impact of implementing these new energy efficiency measures in the heat sector is quantified separately for each country in terms of three key metrics: energy (primary energy supply), environment (carbon dioxide emissions), and economy (total annual energy system costs). 2

5 Czech Republic Croatia Italy Romania United Kingdom Figure 2: Pan-European Thermal Atlas for each of the Five STRATEGO Countries ( 3

6 Primary Changes in the Heat Roadmap Scenarios The primary energy efficiency measures which are added to the heating sector in the Business-Us-Usual (BAU 2050) scenario in each of the Heat Roadmap (HR 2050) scenarios are: More heat savings in the buildings Replacing natural gas with district heating in the urban areas A comparison between various different individual heating solutions in the rural areas, including electric heat pumps, biomass boilers, electric heating, and oil boilers The optimal level of heat savings and district heating is identified by increasing each of them in steps of 10% until the cheapest penetration is identified. The primary technology which should be utilised for individual heating has been identified, but the exact mix of individual heating solutions should be investigated further in future work. The results for each country, which are displayed in Table 1, indicate that the heat demand in the buildings should be reduced by approximately 30-50%, district heating should be expanded from supplying 0-25% of the heat demand today to approximately 40-70% in the future, while individual heating in the rural areas should primarily be supplied by electric heat pumps, which are supplemented by smaller shares of individual solar thermal and biomass boilers. The levels of heat savings, district heating, and electric heat pumps recommended here for the STRATEGO countries are in line with the previous results for the whole of Europe in the Heat Roadmap Europe studies ( Table 1: Heat savings, district heating shares, individual heating options and renewable and excess district heat supply implemented in the Heat Roadmap scenarios for the STRATEGO countries. Amount of Each Energy Efficiency Measure in the Heat Roadmap Scenarios Heat Savings Reduction as a Percentage of the BAU 2050 Heat Demand District Heating % of Total Heat Demand after Heat Savings (vs. % today) Individual Heating Technology Primary Technologies District Heat Supply form Renewable Heat & Excess Heat* % of District Heat Production Czech Republic 40% 40% (25%) Heat pumps are recommended as 60% Croatia 40% 40% (15%) the primary technology with 45% Italy 30% 60% (<5%) small shares for biomass boilers, 35% Romania 50% 40% (20%) and solar thermal. The exact mix of 45% United each technology is 40% 70% (<5%) Kingdom not optimised. 40% *This is defined as geothermal, solar thermal, large heat pumps, electric boilers, and excess heat from existing industrial and waste incineration plants. Biomass and excess heat from thermal power plants is not included in this share. 4

7 Change for the Heating, Cooling, and Electricity Sectors By implementing these energy efficiency measures, it is possible to reduce the energy demand, carbon dioxide emissions, and cost of the energy system in all five STRATEGO countries. As presented in Figure 3, the energy demand in the heating, cooling, and electricity sectors is reduced by approximately 30-40% in the Heat Roadmap scenarios for each country compared to the BAU 2050 scenario. This reduction in energy demand simultaneously reduces the carbon dioxide emissions by approximately 45-70% and the costs by approximately 10-15%. Therefore, the implementation of more energy efficiency measures can reduce energy demand, carbon dioxide emissions, and energy costs at the same time. In total, the energy demand is reduced by over 1000 TWh/year if the Heat Roadmap scenarios are implemented in all five STRATEGO countries, which is the same as all of the energy required today in the Czech Republic, Croatia, and Romania combined. Similarly, the combined reductions in carbon dioxide emissions of 275 Mt/year is more than all of the carbon dioxide emissions emitted from the Czech Republic, Croatia, and Romania today (which is ~225 Mt/year). Furthermore, the annual cost of the heating, cooling, and electricity sectors is reduced by approximately 35 billion/year. 0% Heat Roadmap Scenario in 2050 Compared to a Business-As-Usual Energy System for the Year 2050 Czech Republic Croatia Italy Romania United Kingdom -10% -20% -30% -40% -50% -60% -70% -80% Primary Energy Supply Carbon Dioxide Emissions Total Annual Costs Figure 3: Heat Roadmap impacts on Energy, Environment and Economy compared to the BAU 2050 scenario for the Heating, Cooling and Electricity sectors (excludes the industry and transport sectors). Even though these energy efficiency measures will require a very large increase in investment, the overall costs are reduced primarily due to a reduction in fuel consumption, which equates to a reduction in fuel costs of ~ 50 Billion/year in the year In total, approximately 1.1 trillion of additional investments will be required in the heating and electricity sectors between 2010 and 2050 to implement the Heat Roadmap scenarios, which are primarily for existing technologies. Some of these existing technologies will require more investments in the future, while others will require less. 5

8 Heat savings Individual Heat Pumps DH - Combined Heat & Power Solar PV, CSP, and Tidal DH - Heat Pumps District Heating Substations DH - Fuel & Electric Boilers Offshore Wind Onshore Wind Hydro District Heating Pipes Individual Solar Thermal DH - Solar Thermal DH - Geothermal DH - Industrial Excess DH - Thermal Storage Individual Biomass Boilers Individual Coal and Oil Boilers Individual Gas Boilers Condensing Power Plants Total Investment Costs (Billion ) Detailed Changes in the Heat Roadmap Scenarios A detailed breakdown of investments required between 2010 and 2050 to implement the Heat Roadmap recommendations in all five STRATEGO countries is provided here in Figure 4, which compares the total investments in the Heat Roadmap scenarios with the total investments in today s energy system. The majority of investments to implement the Heat Roadmap scenarios are required in existing technologies, while the most significant investments required are: Heat savings to reduce the heat demand in the buildings: ~ 600 billion Electric heat pumps for the buildings in the rural areas: ~ 200 billion Wind and solar power for electricity production: ~ 150 billion Large-scale heat pumps and centralised boilers for the district heating networks: ~ 100 billion Combined Heat & Power (CHP) plants to produce both heat and electricity: ~ 80 billion District heating substations in the buildings to replace natural gas boilers, along with district heating pipes to transfer the excess and renewable heat to the buildings: ~ 70 billion Smaller investments in hydro power, individual solar thermal, and district heating supply technologies such as large-scale solar thermal, geothermal, industrial excess, and large-scale thermal storage: combined total of ~ 40 billion All Five STRATEGO Countries Combined Ref 2010 Heat Roadmap New & Growing Investments Declining Investments Status of Some Key Technologies in the Heat Roadmap Compared to the Ref 2010 Scenario Figure 4: Total investments for some (not all) key technologies in the heating, cooling, and electricity sectors in the Reference (Ref 2010) and Heat Roadmap (HR 2050) scenarios for all five STRATEGO countries combined. 6

9 Together, these technologies represent a total investment of approximately 1.1 trillion in today s heating and electricity sectors between 2010 and 2050 for the five STRATEGO countries, which as mentioned previously will save the same amount of energy as consumed today in the Czech Republic, Croatia, and Romania combined. As a result, these investments will create a net reduction in the annual cost of energy for the heating and electricity sectors of ~10-15%. The specific mix of these technologies varies between each of the STRATEGO countries due to their differences in population, climate, resources, and energy supply. However despite these differences, each of the five countries benefit from an overall increase in the level of heat savings, district heating, individual electric heat pumps, and individual solar thermal. Expanding these technologies in each of the STRATEGO countries reduces their energy demand, fuel consumption, imported fossil fuels, carbon dioxide emissions, and energy costs simultaneously (see Figure 3), so it is very likely that developing these core technologies will benefit all EU Member States. Heat Available from Renewable Resources and Excess Heat The potential availability of renewable resources is also investigated in this study for each of the STRATEGO countries. The analysis includes a detailed quantification of the renewable resources and excess potentials available for the heating sector. From the results it became apparent that there are very large amounts of excess heat already available in each of the STRATEGO countries from existing thermal power plants, industrial plants, and waste incinerators, while there is also a huge potential to utilise renewable resources for heating. As displayed in Figure 5, there is on average three times more renewable and excess heat available in each of the STRATEGO countries than is required to meet the high levels of district heating supply proposed in the Heat Roadmap scenarios (see Table 1). However, these resources can only be utilised if a district heating network is put in place to connect these resources to the end-user. Without the district heating networks, these resources will continue to be wasted. The analysis also included a review of the renewable electricity resources available, such as wind, solar, hydro, wave, and tidal power, as well as the bioenergy resources available, such as forestry and energy crops. After analysing these resources, it became apparent that there is likely to be a shortage of renewable electricity and bioenergy resources if the long-term objective is to decarbonise all sectors of entire energy system in the future, including industry and transport. This reinforces the importance of utilising the renewable and excess heat resources presented in Figure 5 in the heating sector. By using these resources, it is possible to minimise the pressure on renewable electricity and bioenergy resources, which are more important for all parts of the energy system where there are fewer cost-effective alternatives for decarbonisation. 7

10 Excess & Renewable Heat Potentials and District Heating Supply (TWh/year) Thermal Power Plants Geothermal Solar Thermal Industrial Excess Waste Incineration HR District Heating Supply Resources Supply Resources Supply Resources Supply Resources Supply Resources Supply Czech Republic Croatia Italy Romania United Kingdom Figure 5: Excess and renewable heat potentials for each of the STRATEGO countries, in comparison to the district heating supply proposed in each of their corresponding Heat Roadmaps (see Background Reports 7, 8, and 9). Sensitivity of the Results and Conclusions The robustness of the results and conclusions for the Heat Roadmaps have been analysed for changes to the fuel prices, investment costs, district heating pipe costs, and various assumptions for the amount of sunk costs that may occur as natural gas is replaced with district heating. The sensitivity analyses revealed that potential changes in the fuel prices between 2010 and 2050 will have a very large impact on the overall cost of the energy system. The variations identified due to these changes in the fuel prices are much larger than any variations that have been quantified when implementing the energy efficiency measures in the heating sector. In other words, the cost of the energy system is much more likely to increase due to the future cost of fuel than it is due to the implementation of energy efficiency measures in the heating sector. Even when using today s fuel prices, the energy efficiency measures proposed in this study still do not increase the cost of the energy system, primarily due to the fuel savings that occur when these investments are made. Similarly, although the sunk costs that could occur when district heating replaces natural gas will increase the cost of the Heat Roadmap scenarios, it is unlikely that this increase will be sufficient to make the Heat Roadmap scenarios more expensive than the BAU 2050 scenarios. After analysing the breakdown of the production cost for district heating networks in this study, it became apparent that the district heating pipes only account for a very small share of the total production cost (only ~5-15%). It is likely that the sunk costs related to the gas and district heating networks have a relatively small impact due to this small share they represent in the total production cost. In summary, although the results in this study are sensitive to future forecasts in fuel prices and potential 8

11 sunk costs, the conclusion that increased levels of heat savings, district heating, heat pumps, and individual solar thermal benefit the energy system is robust. Cooling Sector The initial aim in the STRATEGO WP2 study was to consider both heating and cooling in equal measure. However, after profiling the existing cooling demand in each Member State, it became apparent that the cooling demand is currently much smaller than today s heat demand. As displayed in Figure 6, the cooling demand is currently less than 15% of the heat demand in each of the STRATEGO countries, even in relatively warm countries like Italy and Croatia. The cooling demand is relatively low since less than 20% of the buildings in Europe actually meet their cooling needs today, with many buildings opting to live with the discomfort of overheating rather than pay for the cost of cooling to a comfortable level. In contrast, almost all of the buildings in Europe currently provide some level of heating. This means that the heating and cooling demand are likely to undergo two very different developments in the coming decades. The cooling demand is likely to increase as more buildings start to meet their actual cooling needs, while the heat demand is likely to decrease as more heat saving measures are implemented in the buildings. For example, as already discussed, the heat demand is reduced by approximately 30-50% in the final Heat Roadmap scenarios (see Table 1). As the cooling demand increases and the heat demand decreases, the relative influence of the cooling demand is likely to increase. Once again, if the heat savings recommended in the Heat Roadmap scenarios are implemented, and at the same time all of buildings actually meet their cooling needs in the future (max potential cooling demand), then the cooling demand will become approximately 30-70% of the heat demand (see Figure 6). Therefore, today the cooling demand is relatively small compared to the heat demand, but depending on how it will evolve in the future, the cooling demand could become an important consideration in the national energy system. In this study, the potential growth in the cooling demand is not investigated in detail. Instead the impact of replacing some of today s individual cooling units, which are primarily heat pumps, with district cooling was investigated under two cases: 1) where the cooling demand is at similar levels as today for all STRATEGO countries and 2) an extreme case for Italy where the cooling demand is increased to the maximum expected cooling demand in the future (i.e. where all of the buildings meet their cooling needs). As expected, when the cooling demand is at similar levels as today, the impact of changing the cooling sector is almost negligible from a national energy system perspective (changes all of the metrics measured by less than 1%). However, if the demand increases to the maximum demand in the future, then the cooling sector will begin to have an influence on the national system. Furthermore, in this extreme case, replacing individual cooling with district cooling had a positive impact on the energy demand and carbon dioxide emissions in the system, indicating that this should be considered as an alternative for cooling. However, when considering alternatives in the cooling sector, it is more appropriate in the short-term to carry out the analysis at a local level rather than at a national level, simply due to the scale of the cooling demand compared to the rest of the national energy system. 9

12 CZ HR IT RO UK 80% 70% 60% 50% 40% 30% 20% 10% 0% % of Current Heat Demand % of HR 2050 Heat Demand % of Current Heat Demand % of HR 2050 Heat Demand Current Cooling Demand Max Potential Cooling Demand Figure 6: Scale of the Current and Future Potential Cooling Demand compared to the Current heat demand (2010) and the heat demand in the Heat Roadmap scenarios (HR 2050). 10

13 STRATEGO WP2 Conclusions and Recommendations The overall conclusion in STRATEGO WP2 is that a combination of energy efficiency measures, in the form of heat savings, district heating in the urban areas, and primarily heat pumps, with smaller shares of biomass boilers and solar thermal in the rural areas, reduces the energy system costs, energy demand, and carbon dioxide emissions in all five STRATEGO countries for the year 2050 compared to a Business-As-Usual projection. Below is a list of 21 key conclusions and recommendations from this study, divided by specific categories relating to the heating and cooling sector. These are elaborated upon in more detail in the main report. Heat savings 1. Heat savings reduce the energy demand, carbon emissions, and costs in all countries, but eventually they become more expensive than the cost of sustainable heat supply. 2. The average heat demand in residential and services buildings combined, including space heating and hot water, should be reduced by approximately 30-50% in total. This equates to a heat density of approximately kwh/m 2, depending on the specific country. 3. Heat savings should be implemented over a long-term time horizon, in combination with other building renovations. 4. There are synergies between the reduction of the heat demand and improvements in the heat supply such as reducing the thermal capacity required and enabling more heat sources to be utilised on the district heating network. Heating in Urban Areas 5. District heating is more efficient and cost effective in urban areas than natural gas networks. 6. District heating is technically and economically viable in the North and South of Europe. 7. District heating can utilise very large amounts of excess heat and heat from renewable resources, which are wasted today in the energy system. 8. District heating pipes represent a relatively small fraction of the annualised district heating system cost (~5-15%). 9. The sunk costs that could occur during the implementation of district heating do affect the results for the Heat Roadmap scenarios, but the scale of their impact is not significant enough to change the overall conclusion. Heating in Rural Areas 10. Individual heat pumps are the most preferable individual heat solution based on a balance across energy demand, emissions, and cost. They should be supplemented by smaller shares of individual solar thermal and biomass boilers. 11. The optimal mix of individual heating technologies should be analysed in more detail. 12. Individual heat pumps may be too expensive in suburban areas, where the heat supply transitions from district heating to an individual heating solution. 11

14 Cooling 13. The current cooling demand is relatively low compared to the heat demand, but in the future the cooling demand could be relatively larger. 14. District cooling can reduce the cost and energy demand in the cooling sector, but at present the benefits occur at a local level. 15. The optimal level of district cooling is still unclear. 16. The design of the district cooling network should be analysed in more detail. Sustainable Resources for the Energy System in the Future 17. There is a large amount of excess heat and heat from renewable resources available, but there is likely to be a shortage of renewable electricity and bioenergy in the future. 18. Further energy efficiency improvements are necessary in electricity, industry, and transport to decarbonise the energy system. Methodologies and Tools for Analysing the Heating and Cooling Sector 19. Alternative technologies in the heating and cooling sector should be analysed from a complete energy systems perspective. 20. A combination of mapping and modelling is essential to analyse the heating and cooling sectors, but it should also be expanded to other parts of the energy system in the future. 21. A variety of different expertise is required to inform, design, and analyse a holistic heating and cooling strategy. 12

15 Project No: IEE/13/650 Enhanced Heating and Cooling Plans to Quantify the Impact of Increased Energy Efficiency in EU Member States Translating the Heat Roadmap Europe Methodology to Member State Level Work Package 2 Main Report

16 Authors: Contact: David Connolly, Work Package 2 Coordinator, Aalborg University Kenneth Hansen, Aalborg University David Drysdale, Aalborg University Henrik Lund, Aalborg University Brian Vad Mathiesen, Aalborg University Sven Werner, Halmstad University Urban Persson, Halmstad University Bernd Möller, University of Flensburg Ole Garcia Wilke, University of Flensburg Kjell Bettgenhäuser, Ecofys Willemijn Pouwels, Ecofys Thomas Boermans, Ecofys Tomislav Novosel, FAMENA, University of Zagreb Goran Krajačić, FAMENA, University of Zagreb Neven Duić, FAMENA, University of Zagreb Daniel Trier, PlanEnergi Daniel Møller, PlanEnergi Anders Michael Odgaard, PlanEnergi Linn Laurberg Jensen, PlanEnergi Aalborg University, Denmark A.C. Meyers Vænge 15 DK-2450 Copenhagen T: david@plan.aau.dk Web: Version 2 (Costs updated in BR6) 2016 Deliverable No. D 2.2: Public Document. The STRATEGO project (Multi-level actions for enhanced Heating & Cooling plans) is supported by the Intelligent Energy Europe Programme. The sole responsibility for the content of this document lies with the authors. It does not necessarily reflect the opinion of the funding authorities. The funding authorities are not responsible for any use that may be made of the information contained therein. STRATEGO Website: Heat Roadmap Europe Website: Online Maps: ii

17 Contents Section Nomenclature... v 1 Introduction Studies to Date Focus in STRATEGO WP Contents of this Report Methodology for the Heating and Cooling Sectors Analysing the Heating and Cooling Sectors as part of the Whole Energy System EnergyPLAN and Energy Modelling Common Considerations in All Scenarios Quantifying the Impact of Increased Energy Efficiency in the Heating Sector Step 0: Creating the Reference 2010 and BAU 2050 Models Step 1: Adding Heat Savings Step 2: Comparing Heat Network Solutions Step 3: Comparing Individual Heating Solutions Step 4: Integrating More Excess and Renewable Heat Step 5: Integrating More Renewable Electricity in the Heating Sector Step 6: Heat Roadmap Results for the Heating Sector Considerations when Comparing Different Individual Heating Technologies Quantification of the Impact in the Individual Steps Primary Energy Supply and Carbon Dioxide Emissions Energy System Costs Cost Sensitivity Analysis Sunk Costs Discussion for the Heating Sector Heat Savings Heating Networks (Urban Areas) Individual Heating (Rural Areas) Renewable Electricity, Renewable Heating, and Biomass Resources Sensitivity Analysis Page iii

18 6 Quantifying the Impact of Increased Energy Efficiency in the Cooling Sector Current and Future Potential Cooling Demand Comparing Individual Cooling and District Cooling Supply Results and Discussion for the Cooling Sector Discussion about the Methodology and Tools in STRATEGO WP Unit Costs Compared to Energy System Costs Boundary in the Energy Systems Analysis Future Improvements in the Methodology Conclusions and Recommendations Heat Savings Heating in Urban Areas Heating in Rural Areas Cooling Sustainable Resources for the Energy System in the Future Methodologies and Tools for Analysing the Heating and Cooling Sector References Appendix List of Figures in the Report List of Tables in the Report Primary energy supply and carbon dioxide emissions Electricity production Heat production Socio-economic costs Cost Sensitivity Grid Stabilisation Requirements Population forecasts Technical Data for the Ref 2010, BAU 2050 and Heat Roadmap Scenarios Investment Costs for the Ref 2010, BAU 2050 and Heat Roadmap Scenarios Energy Balances from the EnergyPLAN Tool for the Heat Roadmap Scenarios Business-As-Usual Czech Republic Heat Roadmap Czech Republic Business-As-Usual Croatia Heat Roadmap Croatia iv

19 Business-As-Usual Italy Heat Roadmap Italy Business-As-Usual Romania Heat Roadmap Romania Business-As-Usual United Kingdom Heat Roadmap United Kingdom Nomenclature BAU BR CHP CO 2 CZ DC DH HCE HR HR-Country HRE IEA IT JRC NHCPs PES PV Ref RO Business-as-usual scenario Background Report Combined heat and power Carbon dioxide Czech Republic District Cooling District Heating Heating, Cooling and Electricity Croatia Heat Roadmap for the specific country (i.e. HR-HR, HR-CZ, HR-IT, HR-RO, HR-UK) Heat Roadmap Europe International Energy Agency Italy Joint Research Centre National heating and cooling plans Primary Energy Supply Photo Voltaic Reference scenario Romania v

20 1 Introduction The overall aim of the STRATEGO project is to support local and national authorities in the implementation of more efficient heating and cooling solutions. This support is provided in a variety of ways throughout the different work packages (WPs). WP2, which is the focus in this report, supports the development of advanced National Heating and Cooling Plans (NHCP), which are required under Article 14 of the European Commission s Energy Efficiency Directive [1]. WP3 provides support to local authorities by supporting 23 cities/regions to map their local heating and cooling demand and supply, to subsequently identify areas of priority for intervention, while WP4 supports key actors in policy and industry by exchanging bestpractice knowledge between various regions across Europe. WP2 supports national authorities by creating and implementing new planning tools and methodologies to demonstrate how energy efficiency can be utilised in the heating and cooling sectors [2,3]. These new tools and methodologies make it possible to identify the potential for new energy efficiency solutions and subsequently, to quantify the impact of implementing them. Impact is quantified in terms of energy, economy, and environment at the national level. This is a very important process at the national level, since the type of technologies that are implemented in the heating and cooling sector have a major impact on the performance of the national energy system. For example, if electric heating is used to heat buildings, then it will increase the demand for electricity for the entire electric grid, but if district heating is utilised, then it is more likely the electricity demand will be reduced rather than increased. It is important to analyse these impacts at the national level, since the synergies across electricity, heating, cooling, and transport can be overlooked if only local issues are taken into consideration. As a result, WP2 is placed at the beginning of the STRATEGO project so the results can be taken into consideration by the local authorities in WP3 and the key stakeholders in WP Studies to Date The work in STRATEGO WP2 builds on a methodology that has been utilised in many previous studies. It was first applied in the two Heat Plan Denmark studies in 2008 [4] and 2010 [5], which were part of a broader complete energy strategies for Denmark (i.e. including electricity, industry, and transport also), called the IDA Energy Plan [6] and IDA Climate Plan [7]. The methodology from Heat Plan Denmark was applied to Europe in the subsequent two Heat Roadmap Europe studies: The first Heat Roadmap Europe study [2] was carried out in 2012, while the second study was completed in 2013 [3]. Each study has resulted in new knowledge about the role of the heat sector in a future low-carbon energy system for Europe as well as a number of improvements to the original methodology developed in Heat Plan Denmark. STRATEGO WP2 (2015) is the third instalment of the Heat Roadmap Europe series. The aim in HRE1 was to quantify the role of district heating in the future EU energy system. It was motivated by the contrasting views by policymakers at EU level compared to those at national level in countries like Denmark and Sweden, who also have ambitious targets to reduce their carbon footprint. For example, Denmark sees district heating as an integral part of its transition to a 100% renewable energy system [4 7], while no district heating expansion was envisaged in the EU Energy Roadmaps from

21 [8 10]. At that time, it was clear that some basic information was missing about district heating at the EU level. For example, there was very little knowledge about the heat density in European cities, the scale and location of excess heat in Europe, the potential renewable heat resources available, and the role of the heat sector from a complete energy system perspective. The first Heat Roadmap Europe study (HRE1) began exploring these basic issues by developing the first-ever pan-european heat atlas, which illustrated the heat density on a 1 km 2 resolution for each country in Europe. Heat density is extremely important for district heating, since it is only when the heat density is sufficiently high that district heating pipes are economically viable. Using this heat atlas in Heat Roadmap Europe 1, it was possible to observe a number of key findings, such as: Approximately 50% of the heat demand in Europe was in areas with a sufficiently high heat density to justify the development of district heating. The heat density is not intuitively linked to climate. In other words, cities in the south of Europe have heat densities as high as cities in the North of Europe. This is most likely due to 1) that buildings are always located very close to one another in cities and 2) heat demand is linked to the quality of the building envelope as well as the outside temperature, with northern cities usually having a much higher level of insulation than southern cities. In HRE1, this new knowledge was used to quantify the impact of installing district heating in the EU energy system. The advanced energy systems analysis tool, EnergyPLAN, was used to model a 2010, 2030, and 2050 business-as-usual scenario of Europe based on forecasts from the EU Energy Roadmap report [8 10]. The results indicated that district heating was beneficial in both today s energy system (i.e. 2010) and the future business-as-usual energy system (i.e. 2030/2050). If district heating is increased from today s level of 10% to the potential identified in the mapping of 50%, then it would reduce energy consumption, reduce carbon dioxide emissions, reduce energy costs, and increase the number of jobs in the EU. These were extremely positive results which suggested that district heating did have a key role to play in Europe. The scope in Heat Roadmap Europe 2 (HRE2) was expanded to cover the entire heating sector rather than only district heating. The analysis considered heat savings, heat networks in urban areas (i.e. gas and district heating), and individual heating in rural areas (i.e. boilers, heat pumps, etc.). The Buildings Unit from Ecofys joined the HRE team to advice on the potential and cost of implementing heat savings in European buildings, while the modelling in EnergyPLAN also included some individual heating considerations. Furthermore, the scenario analysed in HRE2 was not a business-as-usual context, but instead it was a low-carbon energy system context. The 2050 scenario was again taken from the EU Energy Roadmap report by the European Commission, but this time it was for a scenario where Europe achieved its greenhouse gas emission target of 80% reductions by 2050 [11]. The modelling once again revealed a number of key findings, including: The unit cost of heat savings (i.e. /kwh) becomes more expensive as more heat savings are implemented. When the total heat demand (i.e. space heating and hot water) is reduced by 30-50%, it is likely that the price of sustainable heat supply will be cheaper than continuing to reduce the heat demand. Therefore, heat supply and heat savings are both extremely important in the future EU energy system. Reducing the heat demand in Europe by 30-50% is extremely ambitious and it will require ongoing political support to be achieved. To put it this in context, after 40 years of relatively strong political 2

22 support, Denmark has successfully implemented heat savings of approximately 20% since the 1970s [12]. District heating should be prioritised for heating in urban areas, while individual electric heat pumps should be prioritised for heating in the rural areas. Heat pumps were included in HRE2 based on results from previous studies [13,14], so they were not compared with technologies for the EU explicitly. The final HRE2 scenario proposed included 35% heat savings, 50% district heating (i.e. urban areas) and 50% individual heat pumps (i.e. rural) areas. This HRE2 scenario was able to achieve the same level of decarbonisation as proposed in the European Commission s scenario, but the price of the HRE2 scenario was 100 billion/year less. This demonstrated the importance of combining solutions to achieve a low-carbon energy system in the future, rather than over relying on one specific measure. The mapping was also expanded in HRE2 to both locate and quantify the excess heat available in Europe that could potentially be used to supply district heating systems in the future. This mapping exercise indicated that there is currently more excess heat available from thermal power generation, industry, and waste incineration than is required to heat all buildings in Europe. Once again, this was a very important finding, since it suggests that there is a very large potential to capture excess heat and use it to replace natural gas when heating buildings in Europe. Furthermore, the mapping in HRE2 also identified the areas of Europe that have suitable resources for renewable heat supply in the form of solar thermal and geothermal heating, which could also be used to supplement excess heat in a district heating system. 1.2 Focus in STRATEGO WP2 In this study, which is the third part of the Heat Roadmap Europe series, the primary objective is to move from an EU wide analysis to individual Member State assessments. This is in line with the requirements currently in place in Article 14 of the Energy Efficiency Directive [1], which specifies that By 31 December 2015, Member States shall carry out and notify to the Commission a comprehensive assessment of the potential for the application of high-efficiency cogeneration and efficient district heating and cooling. However, this study does not only focus on cogeneration and district heating, but instead it covers the entire heating and cooling sector. The five Member States that are analysed in STRATEGO are the Czech Republic (CZ), Croatia (HR), Italy (IT), Romania (RO), and the United Kingdom (UK). Like the HRE2 study, the heat strategies developed here consider a combination of heat savings, heat networks in urban areas, and individual heating in rural areas (see Figure 1). Therefore, new methodologies and tools are developed here to create new knowledge about these at a Member State level. For example, the cost of heat savings is analysed separately for each of the countries considered in STRATEGO (Background Report 3), as well as the renewable resources available in each Member State (Background Report 8). Furthermore, the mapping is developed further here, not only to extract data at a Member State level, but also to create some new information about the district heating systems feasible at EU and Member State level. In addition to mapping the technical potential of district heating in HRE1 and HRE2, which is based on different heat density classes, there is now also an economic assessment of the district heating potentials in the maps. To do this, the cost of developing the district heating infrastructure is estimated in the mapping for each 1 km 2 cell (Background Report 6). Furthermore, the individual cells are now combined in the mapping to identify the size of the district heating systems that are feasible for each town or city. 3

23 If the heat density is high enough in two cells that are located beside each other, the new maps will combine these together to demonstrate the total size of the district heating system that can be constructed ( Finally, the mapping in this study now also includes the cooling demand. As a first step, the cooling demand today is quantified along with an estimate of potential cooling demand in future if all buildings are cooled to a comfortable level (Background Report 4). Afterwards, the cooling demand in the services sector is mapped for each Member State (Background Report 5) to identify suitable areas for developing district cooling (Background Report 6). This is the first time that the cooling demand has been included in detail in the HRE series. Heat & Cooling Demand (HU) Energy Efficiency Costs (Ecofys & AAU) Modelling Alternatives (AAU) Renewable Energy Resources (PE) Mapping Surplus Heat (HU) Mapping Demands & RE (UF) Figure 1: Key tasks and partners in STRATEGO WP2. To build on the modelling of the heat sector in HRE2, this study includes a comparison between the various individual heating solutions for each country, so the impact of various individual heating solutions are also quantified. Furthermore, a number of new methodologies are developed and documented here to enable this analysis to be repeated for other Member States. For example, the methodology of creating an hourly model of today s energy system (i.e. 2010) and of the future energy system (i.e. 2050) is presented in detail in Background Report 1. Similarly, Background Report 2 describes how to calculate the inputs necessary to model the electricity, heating, and transport sectors on an hourly basis, which is essential when analysing scenarios with high penetrations of renewable energy in the future. Using these new methodologies, the modelling from HRE2 has been repeated here at a Member State level. Like the mapping, the modelling also includes the cooling sector in this study, in addition to a specific analysis on the potential impact of implementing district cooling. This has required some new features in the 4

24 EnergyPLAN tool, including a number of updates to interface to make it easier for third parties to use the models developed in the STRATEGO project [15]. In summary, the STRATEGO project set out with the overall aim of moving from a broad EU context for the heating sector to specific recommendations at the Member State level. During this process a number of new tools and methodologies have been developed to support the heating and cooling strategies presented here for the Czech Republic, Croatia, Italy, Romania, and the United Kingdom. 1.3 Contents of this Report This report is the culmination of many different inputs to create the final heating and cooling strategies for each of the STRATEGO countries. These inputs are documented in a series of Background Reports, while this Main Report primarily describes how this data was combined to create the final strategies. As a result, this Main Report is primarily focused on the modelling part of the project, since this is where all of the inputs are combined with one another, while the Background Reports focus on specifics issues in the STRATEGO project. The following Background Reports support the main content of this report: 1. Creating National Energy Models for 2010 and 2050: Describes the methodology used to create the hourly energy system models for today s energy system (i.e. 2010) and the future energy system (i.e. 2050) for each of the STRATEGO countries. Each model includes the electricity, heating, cooling, industry, and transport sectors. 2. Creating Hourly Profiles to Model both Demand and Supply: Describes the methodology used to simulate the demands and supply on an hourly basis. It is very important to use a short-term time resolution, such as one hour, when simulating the energy system, especially when it includes resources such as wind and solar power. However, hourly data is not easy to find, so this Background Report describes how to create hourly profiles for the electricity, heating, cooling, and transport demands as well as for wind power, solar power, solar thermal and wave power production. 3. Presents the methodology used to estimate the cost and potential of heat savings for each of the STRATEGO countries, along with the results obtained. These are used in the modelling to identify a suitable level of heat savings for each country. o 3a Quantifying the Cost of Heat Savings in EU Member States: presents the work carried out by Ecofys for four STRATEGO countries: Czech Republic, Croatia, Italy, and Romania. o 3b Applying the Ecofys Results in the Energy Modelling and the Cost of Heat Savings for the United Kingdom: presents the work carried out by Aalborg University, explaining how the results from Ecofys are used during the modelling and describing the costs assumed for heat savings in the UK, which was not included in the Ecofys analysis. 4. Quantifying the Heating and Cooling Demand in Europe: Presents the methodology used to quantify the heating and cooling demand for the entire EU28, as well as for each Member State. 5. Mapping the Heating and Cooling Demand in Europe: Describes the methodology used to map the heating and cooling demands on a 1 km 2 resolution for the entire EU28. Data is then extracted from these maps for the five STRATEGO countries and presented in online format ( 6. Quantifying the Potential for District Heating and Cooling in EU Member States: The district heating potential is identified from both a technical and economic perspective. The technical potential is based on the heat densities identified, while the economic potential is based on an estimate of the costs for the district heating pipes. The cooling density is also mapped for the 5

25 services sector, but this is not used here to define the exact level of district cooling that is feasible, since there is still considerable uncertainty about the level of cooling density required to justify the development of district cooling. Instead, the mapping here identifies an approximate cost of constructing the pipes for different levels of district cooling, which is then used as an input for the modelling. 7. Quantifying the Excess Heat Available for District Heating in Europe: Presents the methodology to quantify the amount of excess heat currently available from thermal power plants, industry, and waste incineration for each Member State in Europe. 8. Estimating the Renewable Energy Resources Available in EU Member States: This is a review of various different studies to establish how much renewable energy is currently expected to be available in the five STRATEGO countries. It includes renewable electricity (such as wind, wave, and solar), renewable heat (such as geothermal and solar thermal) and renewable fuel (i.e. various bioenergy resources). 9. Mapping the Renewable Heat Resources in Europe: This Background Report introduces a first attempt to map the availability of bioenergy across Europe, as well as the heat sources available for large-scale heat pumps (i.e. sewage water and surface water). It also includes an update on the geothermal heat mapping that began in HRE2. The main content in this report regularly draws upon the data from these Background Reports, but in most cases the data is not taken directly. The data is typically the starting point for some additional interpretations that are necessary when combining measures to create the final heating and cooling strategies. Therefore, the main content of this report focuses on how the data from the Background Reports is interpreted while developing the final heating and cooling strategies. Afterwards, all of the results for the various measures (such as heat savings, district heating, district cooling, and excess heat sources) are combined in the energy systems analysis tool, EnergyPLAN. The heating and cooling strategies are primarily created for the year 2050 since this is sufficiently far away to accommodate radical technological change in the energy system [16]. The main content of this report is structured as follows: Methodology Sections 2, 3, and 6 describe the methodologies for the modelling in general, the modelling to analyse the heat sector, and the modelling to analyse the cooling sector respectively. Results Sections 4 and 7 present the results for the heating and cooling sectors respectively. Discussion Sections 5, 7, and 8 outline the main findings from the results for the heating sector, cooling sector, and the methodology utilised in this study respectively. Conclusions Section 9 summarises the key findings in STRATEGO WP2 and presents some recommendations for stakeholders in the heat sector at EU and national level, such as policymakers, industry, and researchers. Appendices Section 11: Provides additional tables and figures to expand on the results presented in the main report for each STRATEGO country. Overall, the heating and cooling strategies presented here include a wide range of complex methodologies, but the ultimate goal throughout this study remains relatively simple: The overall aim in STRATEGO WP2 is to develop low-carbon heating and cooling strategies, which are called Heat Roadmaps, and subsequently to quantify the impact of implementing them at a national level for five EU Member States, which are Czech Republic, Croatia, Italy, Romania, and the United Kingdom 6

26 2 Methodology for the Heating and Cooling Sectors The methodology in this study is designed to consider the heating and cooling sectors as part of the entire energy system, rather than as isolated components. Despite the complexity of this, the methodology is also designed in a way that is repeatable for other Member States outside of the STRATEGO project, so the analysis carried out in this study can be reviewed, reused, and repeated elsewhere. The focus in this section is on the modelling methodology, while section 3 and section 6 describe how the inputs from the other parts of the project are interpreted during the modelling itself (such as the heat savings in Background Report 3 and the mapping in Background Reports 6). 2.1 Analysing the Heating and Cooling Sectors as part of the Whole Energy System Heating and cooling accounts for almost half of the end-user energy consumed in Europe [17], which clearly demonstrates the impact it can have on the remainder of the energy system. However, a more complex issue which is not as obvious is the future role of the heating and cooling sector when transitioning to a low-carbon energy system. The energy system will need to change dramatically in Europe over the next 35 years for a wide variety of well-documented reasons, such as climate change, security of energy supply, and to maintain affordable energy prices. To achieve each of these goals simultaneously will require a rapid transition from a fossilfuel based energy system to a renewable-energy based energy system. This will present many challenges, which are clearly visible when we compare the structure of today s energy system with the structure of a future renewable-based energy system. As today s energy system is based on fossil fuels, the supply side of the energy system is very flexible and reliable. Large amounts of energy can be stored on the supply side in liquid, gas, and solid form via fossil fuels. This means that energy can be provided on demand, as long as there is a suitable fossil fuel storage nearby, such as: A diesel tank in a car A gas tank for a boiler A coal storage for a power plant Fossil fuels have provided society with large amounts of energy storage and so the energy system has been designed around this key attribute. From a broad perspective, the structure of today s energy system is relatively simple in many countries. For example, a typical structure of an energy system today is provide in Figure 2, where it is evident that power plants supply electricity, boilers provide heat, and vehicles provide transport, all with the aid of flexible and stored energy in the form of fossil fuels. However, in the future if we remove these fossil fuels, then we don t just lose the resource, but we also lose the stored energy and flexibility that they provide, especially since the resources that will replace them, such as wind and solar power, have no natural form of stored energy. 7

27 Resources Conversion Demands Combustion Engines Fuel Storage Power Exchange Mobility Fossil Fuel Power Plants Electricity Electricity Storage Cooling Boilers Heating Figure 2: Interaction between sectors and technologies in a typical national energy system, with the primary components of the heating sector highlighted with dashed lines. Considering this dynamic, the key to achieving an affordable low-carbon energy system in the future is identifying new forms of cheap flexibility that will enable us to accommodate the intermittency from wind and solar power. Flexibility can be created using various forms of energy storage, such as electricity, thermal, gaseous, and liquid. Each of these forms has very different characteristics, with Figure 3 presenting a typical cost and efficiency for each one. The important result to note here is that on a unit basis (i.e. /MWh), electricity storage is ~100 times more expensive than thermal storage, while thermal storage is ~100 times more expensive than gas and liquid storage. Therefore, where possible, it is important to connect wind and solar to these cheaper forms of storage energy (i.e. thermal, gas, and liquid) rather than the much more expensive electricity storage. It is possible to connect these by integrating the various sectors of the energy system with one another much more in the future. By connecting the electricity, thermal, and transport sectors to one another, it is possible for the electricity sector (i.e. wind and solar) to utilise these cheap forms of energy storage. This has been demonstrated in a concept call the Smart Energy System ( [16,18 22]. 8

28 Investment Cost ( /MWh) Efficiency (%) % % % % % 10 20% 1 Electricity Thermal Gas Liquid Fuel Type of Energy Storage 0% Figure 3: Comparison of the unit cost and efficiency for various forms of energy storage [23 26]. A smart energy system consists of new technologies and infrastructures that create new forms of flexibility, primarily in the conversion stage of the energy system. This is achieved by transforming from a simple linear approach in today s energy system (i.e. fuel to conversion to end-use in Figure 2), to a more interconnected approach. As presented in Figure 4, the Smart Energy System combines the electricity, heat, and transport sectors so that the flexibility across these different areas can compensate for the lack of flexibility from renewable resources, such as wind and solar. The smart energy system uses technologies such as: Smart Electricity Grids to connect flexible electricity demands such as heat pumps and electric vehicles to the intermittent renewable resources such as wind and solar power. Smart Thermal Grids (District Heating and Cooling) to connect the electricity and heating sectors. This enables thermal storage to be utilised for creating additional flexibility and heat losses in the energy system to be recycled. Smart Gas Grids to connect the electricity, heating, and transport sectors. This enables gas storage to be utilised for creating additional flexibility. If the gas is refined to a liquid fuel, then liquid fuel storages can also be utilised. In the context of this study, it is important to appreciate the role of the heat sector in the Smart Energy System compared to today s energy system. Today the heating sector is relatively isolated from the other parts of the energy system (Figure 2), but in the future (Figure 4), the heating and cooling sector will be heavily integrated with the energy system around it. Hence, the actions taken in the heating and cooling sectors will also have a key influence on the electricity and transport sectors. In this context, it is essential that the heating and cooling sectors are analysed from a whole energy system perspective to capture all of the benefits in the future. This is why a complete energy system model is created for all five countries in the STRATEGO project in the EnergyPLAN tool ( [15]. 9

29 Resources Conversion Demands Bioenergy Fuels Combustion Engines Fuel Storage Wind etc. Fluctuating Electricity Electrofuels Power Exchange Mobility Flexible Electricity Electric Vehicles Electricity Storage Combined Heat & Power Heat Pump Cooling Thermal Storage Heating Solar etc. Fluctuating Heat Figure 4: Interaction between sectors and technologies in a renewable energy system, with the primary components of the heating and cooling sectors highlighted with dashed lines [18]. 10

30 2.2 EnergyPLAN and Energy Modelling EnergyPLAN simulates the electricity, heating, cooling, industry, and transport sectors of an energy system. It simulates each sector on an hourly basis over a one-year time horizon and it is typically used to analyse national energy systems. EnergyPLAN is typically referred to as a simulation tool since it optimises how a mix of pre-defined technologies operate over its one-year time horizon [27]. The EnergyPLAN user can define a wide range of inputs before the simulation begins, such as technology capacities, efficiencies, and costs, which EnergyPLAN then uses to identify how this energy system will perform under either a technical or economic simulation. A technical simulation strategy is utilised here for all models so the energy system is operated as efficiently as possible during each hour in the EnergyPLAN tool (see section 2.3 for more details). Figure 5: Screenshot of Version 12.1 of the EnergyPLAN tool ( EnergyPLAN is purposely designed to be able to identify and utilise synergies across the sectors in the energy system, especially when accommodating large penetrations of intermittent renewable energy such as wind and solar. It has been developed for approximately 15 years at Aalborg University based on the Smart Energy System concept [18]. Therefore, as illustrated in the flow diagram from the model in Figure 5, it considers a variety of new technologies that are necessary in the Smart Energy System concept. 11

31 EnergyPLAN is unique in this way, since very few existing models can simulate this type of radical technological change on an hourly basis [27]. EnergyPLAN has been used in many previous studies, some of which are similar to this one such as the two Heat Plan Denmark studies (Varmeplan Danmark) [4,5], the two Heat Roadmap Europe studies [2,3], and some peer-reviewed journal articles focusing specifically on the heat sector [13,14]. It is important that the methodology utilised in STRATEGO is also repeatable, since this study only covers five of the 28 EU member states. EnergyPLAN is very suitable in this regard, since the model has a relatively simple user-friendly interface, as presented in Figure 5. The model itself can be freely downloaded from its website ( along with a variety of teaching and support material such as exercises, online video workshops, and a user forum [15]. Furthermore, the calculations and assumptions behind the EnergyPLAN tools are reported in the official documentation [28], which enables others to understand how the EnergyPLAN creates its results. Therefore, by using EnergyPLAN in this study, it empowers other people to review, reuse, and repeat the scenarios presented in this report. In this study, EnergyPLAN is used to quantify the impact of moving from today s heating and cooling sector to a more efficient heating and cooling sector. To begin a model of today s energy system is constructed based on historical data, so EnergyPLAN can be validated to ensure it is modelling the country correctly. For this study, the year 2010 is used to simulate today s energy system as presented in detail in Background Report 1. Afterwards, a model of the future energy system is created for the year The year 2050 is chosen since it is far enough away to allow radical changes to be implemented in the energy system. For example, many components in the energy system have lifetimes in excess of 25 years, such as power plants and grids, so very long time-horizons are necessary to allow these infrastructures to be converted. Furthermore, many of the policies at national and EU level are orientated around targets for the year 2050, such as the EU greenhouse gas emission reduction target, so choosing 2050 enables the impact quantified here for the scenarios to be benchmarked against these targets. The changes in the energy system between 2010 and 2050 are based on the most recent business-asusual trajectory for each Member State by the European Commission (BAU 2050) [29]. The projection accounts for changes in energy demands, production capacities, investment costs, fuel prices, and carbon dioxide costs. A detailed description of the methodology used to create the 2050 model is also provided in Background Report 1. These 2010 and BAU 2050 EnergyPLAN models represent how the energy system will operate during each hour for both of these years. After completing the reference models, it is possible to utilise the key benefits of energy modelling. Due to the wide variety of technologies available in EnergyPLAN, it is now possible to use the model to analyse many different potential changes to the energy system. Energy modelling can identify some key trends that are not intuitively evident in the energy sector. For example, the cost of district heating is usually very visible since it requires the construction of new infrastructure in the public space. However, energy modelling in the past has indicated that district heating is cheaper than natural gas in urban areas, since the fuel for district heating is often relatively cheap excess heat from the electricity sector [3]. Energy modelling is often required to see this due to the synergies being exploited when district heating uses excess heat from the electricity sector. By simulating different alternatives in an energy modelling tool such as EnergyPLAN, it is possible to quantify the impact of different choices for the energy system [16]. The procedure outlined in Figure 6 is repeated for numerous different choices so that impact of different choices can be compared with one another. 12

32 EnergyPLAN Reference Model (e.g. 2050) Change the Energy System (e.g. demand, supply, cost, etc.) Measure the Impact* Compare a Variety of Alternatives Figure 6: Procedure undertaken by an EnergyPLAN user during an analysis. *The methodology here for measuring the impact is presented in Figure 7. The impact can be quantified in many ways. In this study the impact of each scenario simulated in EnergyPLAN is measured in terms of energy, environment, and economy (see Figure 7). The impact from an energy perspective is identified by measuring the primary energy supply for each scenario. This is usually subdivided by fuel or sector to demonstrate how different heating and cooling technologies influence the production and consumption of energy. The impact on the environment is presented by measuring the carbon dioxide emissions for each step. This is presented as a total and in some cases on a per capita basis, so it is comparable across different countries. Finally, the impact on the economy is obtained by calculating the total annual costs of the energy system. The costs include investments, fuels, operation & maintenance (O&M), and carbon dioxide costs. All of the investments are annualised based on the lifetime of the technology and an interest rate of 3%. The costs include all centralised electricity and heating plants, all energy grids and storage facilities (i.e. electricity, thermal, gas, and oil), all individual heating units (i.e. boilers, heat pumps, substations), and all vehicles for transport. In some graphs in this study, the cost of fuel for industry and transport, as well as the vehicle costs are removed since they remain constant throughout the scenarios (see section 8.2 for more details). Energy Economy Environment Primary Energy Supply Final Energy Consumption Subdivided in detail for Heating and Electricity Total Annual Energy System Costs Subdivided by Type (Investment, fuels, etc) Typically excludes industry and transport costs since they remain constant throughout Total Carbon Dioxide Emissions Carbon Dioxide Emissions Per Capita Compare Different Technical Alternatives & Identify the Optimal solution across all three metrics Figure 7: Key metrics used to measure the impact of the different scenarios in the EnergyPLAN tool. Energy, economy, and environment are all measured since they reflect some of the key trade-offs associated with decisions in the energy sector. For example, implementing a new solution may reduce 13

33 energy consumption, but if the costs are much higher, then it is unlikely that it can be implemented in reality. Similarly, reducing carbon dioxide emissions may be possible by using low-carbon fuels such as wind power and biomass, but if these carbon reductions are achieved using biomass or wind power that is not available, then it is again unlikely to be implemented in reality. Therefore, a balance across all three metrics is required when prioritising the most sustainable solutions for the heating and cooling sector in the future. Measuring these impacts can reveal both the type and scale of changes for different energy efficiency solutions in the future, which can subsequently indicate the relative importance of different decisions to policymakers and other key stakeholders in the energy system. It can reveal how different technologies change the energy system, and which technologies have the largest change. District heating is a good example in this context. Quite often, the cost of the district heating pipes is assumed to be the most significant part of a district heating project. However, when the heating costs are assessed from an energy systems perspective while including the costs for the fuel, the substation in the building, the network, and the lifetimes of the technologies, then district heating pipes can represent only 5% of the total district heating costs [26], which is discussed in more detail in section 5.2. This means that much more consideration should be placed on the heat supply and substation costs of the district heating system, rather than on the cost of the pipes. However, intuitively many stakeholders tend to focus on the cost of the pipes, so by completing an energy system analysis it is possible to reveal new orders of priorities on decisions like this in the energy system. 2.3 Common Considerations in All Scenarios A key consideration in an energy systems analysis is defining what choices or alternatives to compare with one another. The specific scenarios analysed in this study are described in section 3 for the heat sector and section 6 for the cooling sector. This section describes the common principles applied to all scenarios throughout the analysis. All of the scenarios are conducted under the key principles of the EnergyPLAN tool, which are presented in more detail in Background Report 1, while here there is an overview of the key considerations. Firstly, the costs in EnergyPLAN are calculated from a socio-economic perspective rather than based on a pre-defined market structure. This is in line with the technical simulation that is built into the EnergyPLAN tool. It means that the energy system will operate as efficiently as possible by using intermittent renewable energy as a first priority and then by using the most efficient power plants. It is a key assumption since it allows technical solutions to be compared based on their ability rather than based on the market constructed around them. For example, today s electricity market is not very suitable for very large penetrations of wind power, since wind power has a marginal production price of zero, so analysing the benefits of wind power within this market structure may lead to conclusions which are more related to the market rather than the technology. Secondly, the scenarios in this study are designed around changes that occur in the heating and cooling sectors for buildings. More specifically, the focus here is the space heating, space cooling, and hot water demand for residential and commercial buildings. The other sectors are considered here in terms of the knock-on effects from the heating and cooling sectors, but the other sectors are not optimised themselves. For example, if district heating is implemented, then combined heat and power plants (CHP) 14

34 are typically constructed which then have an impact on the electricity sector. Similarly, although alternatives for industrial heat are not considered directly here, if district heating is implemented in buildings, then excess heat from industry can be utilised in these buildings. In this way, the direct changes in the scenarios here relate to heating and cooling for the residential and services sector, but indirect changes to the other sectors are also accounted for. Furthermore, in every scenario the onshore wind capacity is varied from 0-50% of the electricity demand. After this analysis, the cheapest wind penetration between 0-50% is chosen for each scenario. This ensures that the flexibility of each scenario is evenly compared, which as discussed in section 2.1, is key to achieving the Smart Energy System concept. Also, if there is an electricity import in a scenario, then the power plant capacity and electric grid capacity is increased to reduce the imports to zero. This is to ensure that enough electricity can be produced when new electricity demands are added to the system. For example, if heat pumps or electric heating are implemented, then they often require new power plant and electric grid capacity. In reality this electricity may come from electricity imports in other countries, but to ensure enough capacity is constructed, the power plants are added here rather than relying on imports and assuming the capacity is built elsewhere. These are the general changes that are considered and applied for every scenario in this study. Many other changes are implemented during the specific scenarios developed for the heating and cooling sectors, which are presented in sections 3 and 6 respectively. 15

35 3 Quantifying the Impact of Increased Energy Efficiency in the Heating Sector Energy efficiency can be achieved in the heating sector in a variety of different ways. Firstly, the heat demand can be reduced by improving the building envelope using measures such as insulation, multiglazed windows, and more efficient doors. However, after the heat demand is reduced, then energy efficiency needs to focus on the supply of heat, both in terms of the resources consumed and the type of conversion technology it is put into. For example, different types of resources could be gas, excess heat, biomass, electricity, or solar energy, while different types of conversion technologies could be boilers, heat exchangers, electric heaters, or heat pumps. A low-carbon heating sector could include many combinations of these different options, so in this study, the transition between today s heating sector and a future high-efficiency heating sector has been divided into a number of steps, with each step considering the different options available. An overview of these steps is provided in Table 1, along with the technologies considered and the purpose of each step. Each step is an addition to the previous steps, so they build on top of one another. A more detailed description of each step is presented in the remainder of this section. 16

36 Table 1: Overview of the steps and technologies analysed in the heating sector. Step Technologies Purpose 0a historical A model of the 2010 energy system based on actual 2010 model energy statistics, technologies, and costs. Used as a baseline 0b. BAU business-asusual scenario 1: Heat savings 2: Heat networks 3: Individual heating 4: Renewable Heat 5: Renewable Electricity 6. Heat Roadmap ADD: Heat savings COMPARE: Gas and water (i.e. district heating) networks COMPARE: Oil boilers, Biomass boilers, heat pumps, electric heating ADD: Geothermal, waste incineration, excess industrial heat, large-scale solar thermal ADD: Large heat pumps, electric boilers OPTIMISE: Synergies in the new efficient heat sector scenario to develop the 2050 BAU model. A model of a possible future 2050 energy system, based on the latest business-as-usual (BAU) projections by the European Commission [29]. It represents what is expected to happen if policymakers do not intervene any further with policies in the energy sector. Fuel and carbon costs are also based on those expected by the European Commission in the year 2050, while technology costs are updated primarily based on forecasts by the Danish Energy Agency [24]. All of the remaining steps are analysed for the year 2050, based on this model as a starting point. Heat savings are implemented according to potential savings and associated costs. Heat network solutions are compared. These are only suitable in urban areas where the heat density is sufficiently high. These heat networks are gas based and water based (i.e. district heating). Individual heating solutions are required in the rural areas where the heat density is not sufficiently high to construct a heat network. In this step, various individual heating solutions are compared to establish which one should be combined with the heating network from the previous step. Excess heat and renewable heat sources are integrated into the district heat system based on the potential resource available, their costs and the heat demand. Large heat pumps and electric boilers are installed to improve the efficiency of the system and to further the integration of the heating and electricity sectors. New synergies can be utilised after implementing the solutions in the previous steps, so here these are utilised if possible. In addition, a number of checks are made in the final step to ensure the energy system has been simulated correctly when the changes were implemented. For example, we check if the technologies are operating in a manner we would expect in reality. 3.1 Step 0: Creating the Reference 2010 and BAU 2050 Models A detailed description of the methodologies, assumptions, and sources used to create the Reference 2010 and the BAU 2050 models is provided in Background Report 1. In brief, the 2010 model is a copy of the energy system in the year 2010 based on detailed historical data, which was primarily obtained from the 17

37 International Energy Agency [30] and Enerdata [31]. This model also uses costs based on the year 2010 for all fuels, energy plants, and carbon dioxide emissions. The BAU 2050 model is based on a projection by the European Commission for each Member State to the year 2050, assuming that the energy system develops in a business-as-usual (BAU) context. This projection determines as core element the development of the EU energy system under current trends and adopted policies. It includes current trends on population and economic development including the latest 2010 statistics and takes into account the highly volatile energy import prices environment of recent years [29]. Therefore, it represents how the energy system is expected to develop if no changes beyond existing policies are implemented. In this study, it is used as a starting point when developing the alternative high-efficiency heating sector. The fuel and carbon dioxide costs in the BAU 2050 scenario are also based on projections by the European Commission [29], while the investment and O&M costs are primarily from the EnergyPLAN Cost Database [26]. A full overview of the costs assumed for 2010 and 2050 is provided in Background Report 1. Once the projection from the European Commission is transferred into the EnergyPLAN, then a small number of changes are applied to the scenario so that all steps in the study could be evenly compared. These changes are in line with the common considerations presented in section 2.3. Firstly, the efficiencies for some of the key centralised electricity and heating technologies are updated in the 2050 model to match those expected for the year This was necessary since the exact efficiency of these plants is not visible in the data reported by the European Commission, while some of the 2010 statistics can often include errors. For example, CHP statistics for the year 2010 often include fuel consumption in condensing power plant mode, so their electrical and thermal efficiencies can often be much lower than in reality. Therefore, in the 2050 model the power plant efficiencies, CHP efficiencies, and centralised boiler efficiencies are updated as presented in Table 2. For all the BAU 2050 models, there is a very small amount of oil (~3% on average for the STRATEGO countries) and biomass (~1% on average for the STRATEGO countries) consumed in centralised CHP and power plants. Since this was so small, it was removed from the analysis to simplify the modelling and instead all centralised CHP and condensing plants for the year 2050 are either coal, gas, or both. Table 2: Efficiencies assumed for power plants, combined heat and power (CHP), and centralised boilers in 2010 and Country Power Plant CHP Electrical CHP Thermal Centralised Boiler Efficiency Efficiency Efficiency Efficiency CZ 35% 50% 19% 50% 40% 40% 86% 86% HR 38% 50% 35% 50% 41% 40% 88% 88% IT 44% 55%* 43% 50% 12% 40% 64% 85% RO 33% 50% 25% 50% 40% 40% 83% 83% UK 46% 55%* 52% 50% 39% 40% 95% 95% *The electrical efficiency is higher for Italy and the UK since they have a higher proportion of gas turbine power plants Next, the onshore wind penetration was varied between 0-50% of the electricity demand, so the cheapest wind penetration could be identified. Typically, this wind penetration was different to the one defined in the European Commission s forecast. This is most likely due to a fundamental difference between the PRIMES tool from the European Commission s work and the EnergyPLAN tool used here. EnergyPLAN simulates each hour of the year for all sectors of the energy system whereas PRIMES simulates the energy 18

38 system on an annual basis. Therefore, it is very likely that EnergyPLAN produces different results since it accounts for the short-term variations in demand and supply on an hourly resolution. Afterwards, if any imports are required in the BAU 2050 energy system, then additional power plant capacity is installed until the electricity imports are removed (see Table 3). In reality, these electricity imports are possible, as long as there is 1) sufficient transmission capacity, 2) production capacity available in a neighbouring country and 3) a market mechanism in place to allow countries to trade effectively with one another. However, it is beyond the scope of this work to simulate neighbouring countries to the STRATEGO countries, so instead the capacity required is built internally within these countries. Once again, it is likely that EnergyPLAN identifies more imbalances, both imports and exports, than the PRIMES tool in the European Commission s report [29], since EnergyPLAN simulates the energy system on an hourly basis. Table 3: Total electricity generating capacities for power plants and centralised combined heat and power (CHP) in the BAU 2050 before and after electricity imports are removed. Power Plant & CHP Electric Capacity (MWe) CZ HR IT RO UK Original BAU ,418 4,173 55,828 9,209 59,339 After Removing Electricity Imports* 10,418 4,173 75,828 11,209 79,339 *The EnergyPLAN printout sheets in the Appendix refer to this scenario as 'BAU2' Each of these changes where implemented in the BAU 2050 model that is described in detail in Background Report 1. The resulting BAU 2050 model is then used as a starting point when analysing the impact of increased energy efficiency in the heating sector. 19

39 3.2 Step 1: Adding Heat Savings Add Cost of Heat Savings (from Background Report 3) Reduce Heat Demand Key Changes Update Hourly Distribution for the Heat Demand Reduce Heat Supply (assume it reduces proportionately across all fuels) Reduce Heat Supply Capacities The previous work in Heat Roadmap Europe [3] has indicated that heat savings are very cost-effective at the beginning, but they become more expensive (on a unit basis i.e. /kwh) as more heat savings are implemented. At some point, the cost of additional heat savings surpasses the cost of sustainable heat supply, so it is cheaper to supply heat than to keep saving it. Identifying the exact point at which this occurs for each STRATEGO country is a key focus here. The total investment cost of heat savings is calculated by Ecofys and Aalborg University in Background Report 3 based on detailed energy modelling of the building stock between today and It only considers issues relating to the building envelope such as building standards, renovation rates, new building rates, and demolition rates, but it does not relate to other factors such as changes in demand due to global warming. Background Report 3a is written by Ecofys and it includes the cost of reducing the heat demand using heat savings for four STRATEGO countries. The Ecofys analysis was carried out for two scenarios: a Reference pathway and an Efficiency pathway for four of the STRATEGO countries. The Efficiency pathway quantifies the cost of implementing very high energy efficiency measures in each country between now and 2050, along with the corresponding changes in the heating and cooling demand. Since this pathway represents the higher level of heat savings, it gives some indication of what is most likely the maximum level of heat savings that is technically viable between now and 2050 in each of the countries. Therefore, the total investment cost for the heat savings is taken from this pathway in this study. These total investment costs have been annualised by Aalborg University in Background Report 3b and the results are presented here in Figure 8 for the four countries considered: CZ, HR, IT, and RO. They reveal two very important pieces of information for this analysis: 1. The total investment cost of heat savings increases as more heat savings are implemented 2. They demonstrate the maximum amount of heat savings that are likely to be implemented by 2050 for each country, even with extremely ambitious policies to support them The UK is not included here since it is beyond the scope of the work carried out by Ecofys. Therefore, a separate review was carried out by Aalborg University to establish if these costs are available in some existing work (Background Report 3b). The review was somewhat successful, in the sense that it identified an existing study with a similar analysis for the UK [32], which was carried out by Element Energy for The Committee on Climate Change. However, the results from this report suggest that 1) the potential for heat savings is much less in the UK than the other STRATEGO countries and 2) the cost of heat savings in the UK is considerably more expensive than those identified for the other four STRATEGO countries. Similarly, these costs for the UK are also more expensive than those reported for Denmark in a previous study [12]. This is a highly unlikely situation, so instead the differences between the UK and the other countries is more likely due to either a) a misunderstanding when interpreting the results from the report or 2) a difference in the methodologies employed by Ecofys in Background Report 3a compared to Element Energy in the UK. Therefore, instead of using the costs from Element Energy, it is assumed here 20

40 Accumulated Annualised Costs (M /year) that the cost of heat savings in the UK is an average of the cost for the other four STRATEGO countries. The average cost for the other four STRATEGO countries is identified based on the energy system analysis results in section 4, equating to the average cost at the cheapest level of heat savings for the other four STRATEGO countries. The resulting cost of heat savings for the UK was M 74/TWh of heat savings (i.e /kWh) at a heat saving level of 40%. These results are presented and discussed in more details in section 4. 30,000 CZ HR IT RO 25,000 20,000 15,000 10,000 5, % 10% 20% 30% 40% 50% 60% 70% Figure 8: Accumulated annualised costs of heat savings compared to the reduction in heat demand from the Efficiency Pathway of Background Report 3a for four STRATEGO countries: CZ, HR, IT, and RO. Today s heat demand in Background Report 3a is the heat demand estimated by Ecofys for the year The average heat saving costs for the STRATEGO countries are presented in Table 4 below. Table 4: Average cost of heat savings for the cheapest level of heat savings in the Czech Republic, Croatia, Italy, and Romania based on the energy modelling results in section 4, which are used to estimate the cost of heat savings in the UK. Country Heat Savings Heat Savings (% of Today's Heat Demand) Change in Heat Demand due to Heat Savings Annualised Investment Cost for the Heat Savings Unit Investment Cost for the Heat Savings Unit TWh % of Original Heat Demand M /year M /TWh Czech Republic 33-40% Croatia 8-40% Italy % Romania 47-50% United Kingdom %^ * *This is the average cost of heat savings for the other four STRATEGO countries ^A level of 40% was defined in Background Report 3b, by assuming the UK can reach a similar heat intensity to the other STRATEGO countries, which is 70 kwh/m 2. 21

41 A number of other changes need to be considered in addition to the cost of the heat savings and the resulting heat reductions. The results from Ecofys indicate that the heat demand is not reduced evenly for space heating and hot water. Hot water remains relatively constant between now and 2050, so the space heating demand is the primary reason for the heat savings. This means that the pattern of hourly variations in the heat demand also change when heat savings are implemented (see Background Report 2). The hot water demand remains constant over the whole year, but after the heat savings are implemented, then the hot water demand accounts for a much higher proportion of the total heat demand than previously. This results in more baseload in the heat demand throughout the year and less peaks in the winter and spring. As a result, the hourly distribution profile from Background Report 2 is updated when heat savings are implemented to reflect a smaller space heating demand and a higher hot water share over the year. Furthermore, since the heat demand is reduced, it means the heat supply is also reduced. It is assumed here that it reduces evenly for all types of supply technologies. In other words, if the heat demand is reduced by 30% in total, then it is reduced by 30% for gas and 30% for district heating supply. Also, since the heat demand is less, the size of the heating units is also reduced. For example, if the heat demand is reduced by 30%, then it is assumed that the size (i.e. capacity of the boiler in kw) of the individual heating units, such as boilers, is also reduced by 30%. The heat savings are now implemented in the EnergyPLAN tool while accounting for all of these changes. The heat demand is reduced in intervals of 10% and for each interval the corresponding costs of achieving those heat savings are identified. Afterwards, the cheapest level of heat savings is identified as the point where further heat savings are more expensive than the cost of the heat supply. The cost is used to refine the exact level of heat savings, since it is expected that heat savings will also reduce the energy and environmental impact of the energy system. Hence, if the costs are also being reduced, then all three key metrics measured in this study are being improved at the same time. The authors acknowledge that the heat supply during this process is primarily natural gas, oil boilers, and electric heating in most STRATEGO countries, which are typically not very sustainable forms of heat supply. Therefore, this process is repeated once again in step 6 (section 3.7), when the final Heat Roadmaps include our recommendation for a sustainable heat supply is also included. This ensures that the level of heat savings recommended is the cheapest in both a fossil-fuel and a low-carbon context. 3.3 Step 2: Comparing Heat Network Solutions Key Changes Convert natural gas in urban areas to district heating. Change the natural gas boilers to district heating substations. Build the new district heating pipes and add the heat losses that occur in those pipes Convert existing power plants to gasturbine CHP plants, so their heat can be used to supply the district heating system If there are not enough existing power plants, then construct new ones. Build thermal storage facilities so the CHP plants can regulate their electricity and heat production independently Build boilers for the district heating system so there is always sufficient backup capacity in case of a fault with the CHP units 22

42 Heat networks are only viable in densely populated urban areas where buildings are located sufficiently close to one another. This creates a high heat density (TJ/km 2 ), so it becomes economically viable to share heating infrastructure across buildings rather than developing an individual heat supply in each building. The two existing options for heat networks are gas and water (i.e. district heating). Gas is the dominant heat network today in most countries in Europe (see Background Report 4), but due to increasing gas prices and falling gas supplies, alternatives such as district heating should also be considered. In this step, these two heat network options are compared to one another in order to identify their feasibility. In all five STRATEGO countries, the urban areas are almost solely heated with natural gas. Therefore, the previous step represents a scenario where natural gas is used to heat the urban areas. In this step 2, these natural gas networks are replaced with district heating so both options can be compared with one another by comparing this step with the previous one. To begin, the natural gas boilers in the buildings are converted to district heating substations. The corresponding costs are also updated based on those reported for these two technologies in the EnergyPLAN Costs Database [26]. Afterwards, the district heating pipes are constructed based on the cost identified in the mapping from Background Report 6. The mapping here builds on the work carried out previously at an EU level in Heat Roadmap Europe [3,33]. Firstly, the heat demand is mapped for each 1 km 2 area in Europe as described in Background Report 5 (see Figure 9). Then, based on the different heat densities, the cost of building the corresponding district heating pipes are also estimated on a 1 km 2 resolution for each of the five STRATEGO countries (Background Report 6). Using the maps, a relationship can then be created between the cost of district heating pipes and the total heat demand provided by district heating. The resulting cost curves are presented in Figure 10 for each of the STRATEGO countries. These pipe costs are used in EnergyPLAN, with the exact cost for each country depending on the level of district heating that is being analysed. The amount of district heating being implemented never exceeds the existing level of natural gas in each of the BAU 2050 models for the STRATEGO countries. Therefore, natural gas is the only fuel that is replaced by district heating in this step, which means that the two networks are directly comparable when comparing this step to the previous step. 23

43 Czech Republic Croatia Italy Romania United Kingdom Figure 9: Pan-European Thermal Atlas for each of the Five STRATEGO Countries ( 24

44 Total District Heating Network Costs (M ) CZ HR IT RO UK % 10% 20% 30% 40% 50% 60% 70% 80% Share of District Heating (% of Heat Demand) Figure 10: Investment costs in district heating pipes for various levels of district heating supply in the five STRATEGO countries. These costs were updated in Version 2 (January 2016) based on the new costs in Background Report 6, but the changes did not affect the overall results. After building the district heating network, it is now necessary to design the heat supply for the district heating network. Heat can be supplied from a variety of sources such as excess heat from power plants, industry, and waste incineration as well as renewable heat from geothermal and solar thermal resources. Background Report 7 quantifies the amount of excess heat currently available in all EU member states. The results indicate that there is currently almost 8 EJ/year of excess heat available from thermal power plants alone (excluding nuclear), while Background Report 4 indicates that the current heat demand in Europe for all buildings is approximately 13 EJ/year (i.e. before the heat savings are implemented). This suggests that the excess heat from existing power plants can most likely cover the large majority of heat demand for district heating systems. Based on this, only excess heat from thermal power plants is utilised in this step to supply the district heating networks, while the feasibility of the other potential sources are analysed later in the study. If there is not enough existing thermal plant capacity, then new gas CHP plants are constructed. However, in most cases, it is likely that existing thermal power plants are being converted from electricity-only plants to combined heat and power plants. Furthermore, if the existing power plants are steam-cycle plants, then they are also converted into gas turbines. Existing steam-cycle plants can be either coal or gas, so in some cases this will include a conversion from coal to gas, while in other cases it will be a conversion from a gas steam-cycle plant to a gas turbine plant. This will not be necessary in all cases since many electricity plants today are already gas turbines. Gas turbines have much better regulating capabilities than steam-cycle plants [24], which means they are more suitable in an energy system with large amounts of wind and solar power. By implementing gas turbines here, the energy system is therefore accommodating future changes in the electricity sector as well as the heating sector. 25

45 The size of the CHP plants is dependent on the size of the district heating system that they operate on. During the mapping, the potential size of future district heating networks in terms of their annual heat demand (PJ/year) has been determined for the five STRATEGO countries. If two 1 km 2 cells both have a heat density that is sufficiently high for the development of district heating and they are located beside each other, then in the mapping they are connected together and now a district heating network has been created across two cells. In practice this covers much more than just two cells, but the principal idea remains the same. After connecting each of these cells together, the size of the future district heating networks can then be determined. Size here is classified in terms of the total heat demand for each district heating network. These networks are then subdivided in the mapping based on their size into the following subcategories: >10 PJ/year, 3-10 PJ/year, 1-3 PJ/year, PJ/year, and <0.3 PJ/year. A district heating network that is more than ~1 PJ/year would typically cover more than 20,000 dwellings which would be a relatively large town or small city. Hence, it is assumed that district heating networks above 1 PJ/year in demand use CHP plants that are relatively large (>50 MW th) which can operate in condensing and back pressure mode, while district heating networks with a demand less than 1 PJ/year, have CHP plants that must produce heat and electricity at the same time. It is important to mention that almost all of the district heating included here is likely to be in district heating networks with a demand in excess of 1 PJ/year. Although the CHP plants will be the main form of heat supply, additional capacity is also required in the form of thermal storage and backup boilers. It is assumed that a thermal storage capacity equalling 11 hours of average district heating demand is installed, based on the capacity of thermal storage facilities in existing district heating systems [34]. The thermal storage is an essential form of flexibility in the Smart Energy System concept (see Figure 4), since it enables the CHP plant to operate according to the electricity or heat demand. In other words, if the CHP plant needs to produce electricity during a time when there is no heat demand, then it can store the unwanted heat in the thermal storage. The boilers have two other important roles: firstly, they act as a backup in case the CHP plants stop working for any reason and secondly, they provide the heat during hours of high peak demand (i.e. during the coldest days of winter). In this study, it is assumed that there is enough boiler capacity installed on the district heating systems to cover 120% of the peak district heating demand. Hence, there will always be enough boilers as a backup in the unlikely event that all other heat supplies are unavailable. This is a very conservative assumption since in reality there is likely to be lower capacities of boiler capacity. After implementing all of these considerations, the district heating share is varied in a similar way to heat savings. Starting from the current level of district heating, the penetration rate is increased in intervals of 10% points in the EnergyPLAN tool (e.g. from 10% of the heat demand to 20% of the heat demand, and so on). As mentioned previously, only natural gas boilers is replaced and the heat supply for district heating is almost all excess heat from thermal power plants. If additional district heating reduces the cost of the energy system, then the analysis continues to the next level (i.e. 10% more), but if additional district heating increases the costs, then the analysis stops. Therefore, for each STRATEGO country the cheapest penetration of district heating is identified while accounting for its impact across the whole energy system in the EnergyPLAN tool. Once again, the cost is used to refine the exact level of district heating, since it is expected that district heating will also reduce the energy and environmental impact of the energy system at the same time, something which is also checked during the analysis. Therefore, as long as the costs are reducing, then all three key metrics are once again improving. 26

46 In all STRATEGO countries, the level of district heating is increased, but the expansion varies considerably from country to country. Like the savings, this procedure is also repeated in the final Heat Roadmap in step 6 (see section 3.7), to ensure that the district heating level identified here is also the cheapest after all of the steps are carried out in the final step. 3.4 Step 3: Comparing Individual Heating Solutions Key Changes Move the heating demand outside of the urban (i.e. district heating) areas to different types of individual heating Biomass boilers, heat pumps, electric heating, and oil boilers are all considered Update the costs and efficiencies of the individual heating supply depending on the resource being utilised By the time the analysis reaches step 3, additional heat savings and district heating are already implemented. The heat savings are implemented everywhere while the district heating networks are only in the urban areas. Outside of the district heating areas, the buildings are located further apart so the heat density is not high enough to economically justify the development of more district heating. In these more rural areas (although some may be considered more suburban than rural), individual heating becomes an option. Before making any changes in this step, the heat demand is being supplied by a mix of gas boilers, biomass boilers, and electric heating, although the share of each varies considerably across the STRATEGO countries (see Appendix). In this step, this mix of individual heat supplies is replaced with various single-forms of individual heating to identify the impact of using the different solutions. The modelling here represents an extreme scenario, since it is assumed that all of the heat demand is supplied by one type of individual technology when analysing each of them. This extreme situation is used in the modelling to demonstrate the impact of relying heavily on one specific solution, although it is likely that even if this technology is promoted in reality, minor shares of the others will still remain. The four different individual technologies that are compared here are biomass boilers, electric heat pumps, electric heating, and oil boilers. The penetration of district heating remains the same when comparing each of the technologies with one another, but everything else is replaced by the specific technology being assessed. When a new individual heating technology is being analysed, the first step is to move all of the heat demand in the rural areas to this new individual heating solution. For example, if it is currently a mix of electric heating and biomass boilers, but the aim is to analyse biomass boilers, then all of the heat demand under electric heating is also moved to biomass boilers. After supplying the individual heat demand with this new form of heat supply, then the costs and efficiencies representing that technology are updated. The cost of individual heating technologies are based on those reported in the EnergyPLAN Cost Database [26], but these costs will now be reduced depending on the level of heat savings implemented earlier (as described in section 3.2). The efficiencies vary for the different individual heating solutions and they are based on those that have been assumed in Background Report 4 when quantifying the current heat demand in Europe (see Table 5). Based on all of these considerations, various different individual heating technologies are modelled and compared in the EnergyPLAN tool. The optimal individual heat supply is then chosen based on a balance between the impacts they have on energy, environment, and economy. 27

47 Table 5: Efficiencies assumed for the individual heating units in this study. Individual Heating Unit Thermal Efficiency (%) Oil boilers 80% Biomass boilers 65% Heat Pumps 300% Electric Heating 100% 3.5 Step 4: Integrating More Excess and Renewable Heat Key Changes Identify the amount of Decide how much of excess heat (industry each resource to and waste) and implement based on Add the costs for these renewable heat the resource available, new heat supplies. (geothermal and solar cost, and reliability of thermal) available in the supply in the each country future. Update the CHP and thermal storage capacities after these new heat supplies are implemented. The really dramatic changes to the heating sector are implemented in the first three steps. The remaining three steps are smaller refinements to the energy system so the new synergies across the energy system can be utilised. To begin, in this step, the other forms of heat supply that are available for the district heating system are utilised. These include excess heat from industry and existing waste incineration plants, as well as renewable heat from geothermal and solar thermal energy. A number of limiting factors have been accounted for when defining the amount of heat to use from each of these sources. Firstly, geothermal, industrial excess heat, and excess heat from waste incinerator plants are usually used for baseload heat supply that occurs over the entire year. Hence, the combined amount of these three resources that can be utilised is usually restricted by the amount of baseload heat in the district heating network. Therefore, the amount of baseload heat demand has been used here as an initial guide to estimate the total geothermal, industrial excess, and waste incineration heat that is feasible. Secondly, the potential resource available from each of these technologies is also taken into account. The excess heat from industry and waste incineration plants is quantified in Background Report 7, while the potentials for solar thermal and geothermal heat are presented in Background Reports 8 and 9 respectively. It is important to emphasise that the excess heat reported here for waste incineration and industry are based on the plants that exist today. They do not include a projection of how these sectors will develop in the future. Also, the geothermal heat potential is based on the heat demands they can replace in district heating systems due to the availability of the resource nearby, rather than a quantification of the resource itself (see Background Report 9). As displayed in Table 6, the scale and mix of heat resources vary across each country, so each country is assessed individually when determining the mix to use on the district heating system. 28

48 Table 6: Excess heat available from industry and waste incineration, as well as renewable heat potentials for district heating from geothermal and solar thermal energy for each STRATEGO country from Background Reports 7, 8, and 9. Potential Heat for District Background Heating (TWh/year) Report CZ HR IT RO UK Waste Incineration n/a* 12 n/a* 11 Industrial Excess Solar Thermal n/a** Geothermal *This only considers existing plants and there is currently no waste incineration installed. However, this does not reflect the potential for the future. **A solar thermal potential was not identified for the UK in the review in Background Report 8. Next the costs of each heat supply are taken into account. It is difficult to quantify the exact cost of these technologies since it is very dependent on the local resource and the number of operating hours, which is only evident after the energy system analysis. However, typically industrial surplus heat is the cheapest, followed by waste incineration heat and finally, geothermal heat [26]. Therefore, as a guide at the start it is usually cheapest to start by utilising industrial excess heat and then moving onto the others. However, it is also important to consider the reliability of the source in the future. For example, a geothermal plant is much more predictable over the long term than industry is, since the industry might move or shut down due to broader economic issues. Similarly, waste incineration in the future may reduce due to an increase in recycling or a reduction in people s waste. Therefore, even if industrial excess is the cheapest and there is enough to supply all of the baseload demand, it may be worth utilising some geothermal energy to avoid an over-reliance on industrial excess heat. Each of these issues are taken into account in a qualitative way when determining the amount and mix of each excess heat and renewable heat supply to use on the district heating networks. It is currently not possible to do this in a quantitative way since no methodology currently exists without understanding the local conditions of a specific project. The initial mixes assumed for each country are presented in Table 7, but these should be seen as experimental estimates rather than optimal levels. Table 7: Mix of baseload heat supply from industrial excess, waste incineration, and geothermal heat assumed for each STRATEGO country compared to the total baseload demand that must be met. Utilised (% of Total District Heating Production) CZ HR IT RO UK Geothermal 11% 9% 7% 10% 4% Waste Incineration 4% 0% 5% 0% 5% Industrial Excess 16% 14% 13% 28% 16% Total Baseload Supply 31% 23% 25% 38% 25% Total Baseload Demand 31% 28% 26% 42% 32% Solar thermal heat is not as linked to baseload supply as the other resources since its output varies more over the year. However, again there is currently no clear optimal level of solar since it is also very dependent on local conditions. For example, it can depend on the local solar resource and access to land that is sufficiently close to the district heating network. To include solar, it is simply assumed here that 5% of the district heating production is supplied by solar thermal energy in each country. If this exceeds the solar thermal resource available, then the maximum resource available is utilised. Again, this 5% does not represent an optimal, but instead it is an initial estimate so solar is part of the analysis. Further 29

49 research will be required in the future to establish more optimal levels of these heat supplies based on costs, the resource available, and the future reliability. After defining how much of each resource to use, the next step is to include the costs of these technologies, which were taken from the EnergyPLAN Cost Database [26]. Since these technologies provide a lot of new heat supply, it is also possible to reduce the capacity of CHP plants on the district heating systems. The exact amount of CHP replaced depends on the amount of baseload supply replaced in each country (see Table 7). The boiler capacity is not reduced since this is still required as a backup in case the other supplies fail for any reason. The thermal storage capacity is decreased when the CHP capacity is reduced, but it is increased when solar thermal is added: the thermal storage assumed necessary to accommodate the fluctuations from the solar resource is assumed to equate to 24 hours of average solar production. 3.6 Step 5: Integrating More Renewable Electricity in the Heating Sector Key Changes Add large-scale electric heat Add large-scale electric boilers Reduce the thermal boiler pumps to the district heating to the district heating systems capacity (20% of boiler capacity) systems (10% of boiler capacity) (10% of boiler capacity) In this step, renewable electricity is utilised in the heating sector by installing large-scale heat pumps and electric boilers on the district heating systems. By implementing these technologies, it is possible to connect the electricity sector to relatively cheap large-scale thermal storage, in the same way that the electricity sector is connected to thermal storage when individual heat pumps are implemented. This means that intermittent electricity production, like wind and solar power, can utilise centralised thermal storage facilities on district heating networks to balance their output. The large-scale heat pumps are much more efficient than the electric boilers, so these are prioritised for the majority of heating from electricity. However, the electric boilers are much cheaper to install, so these are more useful when capturing peaks that occur from the wind and solar power over a small number of hours. Like the renewable heat in the previous step, the optimal levels of heat pumps and electric heating are currently not defined for district heating systems. Therefore, it is assumed here that both the heat pump and electric boiler capacities equate to 10% of the original boiler capacity. After constructing these, it is then possible to reduce the thermal boiler capacity by 20%. Once again, these are included here to evaluate how much district heating can utilise synergies across the energy system, rather than to specify an optimal level of heat pump and boiler capacity. The cost and efficiencies for the large-scale heat pumps and electric boilers are obtained from the EnergyPLAN Costs Database [26]. 3.7 Step 6: Heat Roadmap Validate the level of heat savings Validate the level of district heating Key Changes Add some minor individual heating shares to account for the mix that is likely in reality (5% solar and 5% biomass) Ensure the same amount of biomass is utilised in the BAU 2050 scenario and the final Heat Roadmap Match the mix of renewable electricity production with the potentials identified in Background Report 8 30

50 The energy system and especially the heat sector look very different compared to today after adding all of the energy efficiency improvements in the previous steps. In this final Heat Roadmap step, the final scenario is stress-tested and compared with the original BAU 2050 scenario. The stress-tests include a recalculation of the optimal level of heat savings and district heating supply that should be implemented. Once again both of these are varied in intervals of 10% to ensure that the amount identified earlier is still the cheapest level in this final step. In some cases, the cost between one interval and next is less than a 0.1% higher. Where this occurs, the higher level of heat savings or district heating is chosen, since the higher shares result in lower energy consumption at practically the same cost. Afterwards, some minor shares of individual heating are also included in the final Heat Roadmap. As mentioned in section 3.4, the individual heating scenarios here are very extreme. They assume that all of the rural areas outside of the urban (i.e. district heating) areas are supplied by only one technology. However, in practice this will most likely include minor shares of other individual heating solutions. To account for this 5% of the individual heating demand is converted to both solar and biomass in this final step. Once these minor shares are implemented, then the amount of biomass consumed in the final Heat Roadmap scenario is compared to the amount consumed in the original BAU 2050 scenario. If the biomass consumption in the final Heat Roadmap scenario is less, then it is increased to the same level as in the BAU 2050, usually by replacing coal or natural gas. This is to make the scenarios somewhat comparable since it is more likely that the biomass consumption will remain the same when the overall objective is to reduce carbon dioxide emissions. None of the final Heat Roadmap scenarios consume more biomass than the original BAU 2050 model, so in all cases, it was possible to replace some coal or natural gas with biomass. Finally, as mentioned during the Methodology in section 2.3, the cheapest onshore wind capacity is identified for every scenario simulated in this study. The other renewable electricity capacities are kept the same as those assumed in the BAU 2050 model. However, in some cases the amount of renewable electricity in the final scenario exceeded the resources identified in Background Report 8 of this study. In the final change, the amount of renewable electricity utilised in the Heat Roadmaps is reduced to match the resource available. All of the renewable electricity resources available are not utilised in all countries, so these are available when decarbonising other sectors such as industry and transport. The results for each of the steps across all of the STRATEGO countries are presented in the next section, while a discussion around the results is provided in section 5. All of the changes proposed here result in an extremely efficient heating sector that fits with the long-term ambitions of a low-carbon energy system. 31

51 4 Results for the Heating Sector The quantitative results relating to the energy efficiency potentials of the heating and cooling sectors in Czech Republic, Croatia, Italy, Romania and United Kingdom are provided in Table 8 and Table 9 for the three key metrics in this study: Energy, Environment and Economy. These results demonstrate the potential impact of increased energy efficiency in the heating and cooling sectors for each of the STRATEGO countries. The Heat Roadmap scenarios are compared to the BAU 2050 scenarios from a total energy system perspective (Table 8), as well as for the Heating, Cooling and Electricity sectors on their own (Table 9). When comparing the Heat Roadmap scenarios to the BAU 2050 for the entire energy system (see Table 8 and Figure 11), the energy efficiency potentials in terms of primary energy savings are between ~15-25%, with the largest reductions in fossil fuel consumption. Due to these savings in fossil fuel consumption, there is a corresponding reduction in carbon dioxide emissions of ~20-30% for all the STRATEGO countries. Furthermore, the energy efficiency gains also affects the socio-economic costs, which despite increased investment costs, are reduced slightly (5-10%) compared to the BAU 2050 scenario. Therefore, the Heat Roadmap scenarios have a positive effect on all three key metrics: a reduction in energy, a reduction in carbon dioxide, and a reduction in costs. A more detailed breakdown of these figures is provided in the Appendix of this report. Table 8: Heat Roadmap impacts on Energy, Environment and Economy compared to the 2050 BAU scenario for the entire energy systems. All Sectors Energy Environment Economy Heat Roadmap vs. BAU 2050 Change in Primary Energy Supply Change in Carbon Dioxide Unit TWh/year % Mt/year % Change in Energy System Costs (excludes vehicle costs) Billion % /year Czech Republic % % -3-8% Croatia % -5-19% -1-7% Italy % % -13-8% Romania % % -3-9% United Kingdom % % -15-8% All Five Countries % % -35-8% Similar trends can be observed when the energy efficiency gains are assessed for the Heating, Cooling and Electricity sectors on their own (see Table 9 and Figure 11), but the scale of the reduction is increased since industry and transport remain constant in both scenarios (see section 8.2). For example, the primary energy supply for the heating, cooling, and electricity sectors only are reduced by approximately 30-40% between the BAU 2050 and the final Heat Roadmap scenarios for each country. This also changes the CO 2 reduction shares that are now between 40-70%, while the costs are reduced by a total of almost 15%. Again, this demonstrates the positive impact on all three key metrics, when considered for the Heating, Cooling, and Electricity (HCE) sectors on their own. In total, the primary energy supply can be reduced by ~1000 TWh/year if the Heat Roadmap scenarios are implemented in all five STRATEGO countries, which is the same as all of the energy required in the Czech Republic, Croatia, and Romania in 2010 combined (see Appendix). Similarly, the combined 32

52 reductions in carbon dioxide emissions of almost 300 Mt/year is also more than all of carbon dioxide emissions emitted from the Czech Republic, Croatia, and Romania in 2010 (~225 Mt/year, see Appendix). This was possible while reducing the overall costs of the energy system, demonstrating the potential benefits of supporting energy efficiency improvements in the heating and cooling sectors in the future. Table 9: Heat Roadmap impacts on Energy, Environment and Economy compared to the 2050 BAU scenario for the Heating, Cooling and Electricity sectors. Heating, Cooling and Electricity Sectors Only Heat Roadmap vs. BAU 2050 Energy Environment Economy Change in Primary Energy Supply Change in Carbon Dioxide Unit TWh/year % Mt/year % Change in Energy System Costs (excludes vehicle costs) Billion % /year Czech Republic % % -3-14% Croatia % -5-47% -1-12% Italy % % % Romania % % -3-14% United Kingdom % % % All Five Countries % % % The energy efficiency gains are achieved by implementing a number of steps that enable a more efficient heating and cooling sector. The main changes relate to heat savings, the implementation of district heating, converting individual heating to heat pumps, and integrating excess and renewable heat sources in the district heating system. It is important to emphasise that the level of heat savings and district heating are analysed in detail in order to identify optimal levels in each country, while renewable and excess heat integration are estimates based on existing knowledge from Background Reports 7, 8 and 9. 33

53 Change for the Heating, Cooling, and Electricity Sectors Heat Roadmap Scenario in 2050 Compared to a Business-As-Usual Energy System for the Year 2050 Czech Republic Croatia Italy Romania United Kingdom 0% -10% -20% -30% -40% -50% -60% -70% -80% Primary Energy Supply Carbon Dioxide Emissions Total Annual Costs Change for the Heating, Cooling, and Electricity Sectors Primary Energy Supply Carbon Dioxide Emissions Change for All Sectors Total Annual Costs Figure 11: Heat Roadmap impacts on Energy, Environment and Economy compared to the BAU 2050 scenario relative to the original Heating, Cooling and Electricity Sectors and relative to the total energy system, which also includes the industry and transport sectors (i.e. all sectors). The final amount of each energy efficiency measure after they have been implemented and optimised in the final Heat Roadmap scenarios is presented in Table

54 Table 10: Heat savings, district heating shares, individual heating options and renewable and excess district heat supply implemented in the Heat Roadmap scenarios for the STRATEGO countries. Amount of Each Energy Efficiency Measure in the Heat Roadmap Scenarios Heat Savings Reduction as a Percentage of the BAU 2050 Heat Demand District Heating % of Total Heat Demand after Heat Savings (vs. % today) Individual Heating Technology Primary Technologies District Heat Supply form Renewable Heat & Excess Heat* % of District Heat Production Czech Republic 40% 40% (25%) Heat pumps are recommended as 60% Croatia 40% 40% (15%) the primary technology with 45% Italy 30% 60% (<5%) small shares for biomass boilers, 35% Romania 50% 40% (20%) and solar thermal. The exact mix of 45% United each technology is 40% 70% (<5%) Kingdom not optimised. 40% *This is defined as geothermal, solar thermal, large heat pumps, electric boilers, and excess heat from existing industrial and waste incineration plants. Biomass and excess heat from thermal power plants is not included in this share. The feasible levels of heat savings are between 30-50% of the total BAU 2050 heat demand, which have been identified while considering the costs of implementing the heat savings and the resulting impacts that heat savings have on the overall energy system. These savings refer to the reduction in the total heat demand, which is made up of both space heating and hot water. However, the savings are only achieved by reducing the space heating demand, which is reduced by almost 5% more than the total savings level defined for each country (see Figure 12 and Figure 13). For example, the total savings in Italy are 30%, but the space heating reductions are closer to ~35%. This is due to the fact that the hot water demand increases for each country which is caused by a number of factors such as an increased building area, an increase in population, and a general improvement in living standards: this is discussed in more detail in Background Report 3a and Heat Roadmap Europe [3]. The improvements in the building envelope also have an impact on the cooling demand, but as discussed later in detail (see Section 6.1), the cooling demand is much smaller so the changes are insignificant from a national energy system perspective. 35

55 Heating Demand (TWh/year) Cooling Demand (TWh/year) Heating Demand (TWh/year) Cooling Demand (TWh/year) Space Heat Demand Hot Water Demand Cooling Demand (TWh/year) Ref 2010 BAU 2050 HR 2050 Ref 2010 BAU 2050 HR 2050 Ref 2010 BAU 2050 HR 2050 CZ HR RO Figure 12: Heating and cooling demand in the Ref 2010, BAU 2050, and Heat Roadmap (HR 2050) scenarios for the Czech Republic, Croatia, and Romania. 0.0 Space Heat Demand Hot Water Demand Cooling Demand Ref 2010 BAU 2050 HR 2050 Ref 2010 BAU 2050 HR 2050 IT Figure 13: Heating and cooling demand in the Ref 2010, BAU 2050, and Heat Roadmap (HR 2050) scenarios for Italy and the United Kingdom. Heat savings are analysed first, since these are typically an economically viable solution in existing energy systems. Afterwards, the optimal level of district heating is identified with the results indicating that it should provide between 40-70% of the total heat demand (Table 10), with the highest shares of district heating in the countries with the highest heat densities and the cheapest heat sources. The towns and UK 0 36

56 cities with the highest heat densities in each country can be viewed in the online maps ( After the heat savings are implemented everywhere and the district heating systems are installed in the urban areas, the remaining heat is supplied by individual heating options. These should primarily be individual heat pumps due to their relatively high efficiency, which reduces the primary energy supply and minimises the reliance on scarce resources such as biomass (see section 4.1 for more details). In the Heat Roadmap scenarios, the results from the excess heat (Background Report 7) and the renewable energy resource assessments (Background Reports 8 and 9) have been used to estimate the mix of renewable and excess heat sources for the district heating networks. For example, the amount and cost of each resource available is considered along with the baseload demand in the district heat networks (see section 3.5). The resulting shares of excess and renewable heat in the district heating networks are between 30-60% of the district heat supply. It is possible to increase this share, but this may lead to some wasted heat production during the summer when the district heat demand is at its minimum. These results demonstrate how renewable heat, which would otherwise be wasted, can be captured and utilised in the buildings if a district heating network is in place. They also demonstrate how district heating can be economically supplied with very large shares of renewable energy, which is most likely due to the relatively low cost of thermal energy storage. These are the high-level changes that are occurring during the transition from BAU 2050 to the final Heat Roadmap scenarios. However, a lot of individual technologies are contributing to these broad changes. The specific changes for the key technologies in the heating and electricity sectors during the transition to the Heat Roadmap scenarios are outlined in Table 11. It provides some indication of the key technological changes that are required to implement large amounts of energy efficiency in the heating and cooling sectors. These changes are summarised in Figure 14, which indicates that existing technologies which need to grow the fastest are: Individual heat pumps and individual solar thermal for buildings in the rural areas Onshore wind, offshore wind, solar photovoltaics, and hydro power for electricity production. District heating pipes to connect the existing heat demand to the large potential of excess heat and heat from renewable resources. CHP plants, including waste CHP, to supply district heating networks and to produce electricity. Centralised boilers and large-scale thermal storage for the district heating networks. Heat savings to reduce the heat demand in residential and commercial buildings. It is very important to note that heat savings is a broad change that will require a very significant development in more specific technologies relating to the building envelope. These are discussed and presented in more detail in Background Reports 3a and 3b, so the very important role and scale of heat savings required should not be underestimated based on its position in Figure 14. Nuclear power also grows between the Ref 2010 and Heat Roadmap scenarios, but this is due to the original forecasts in the BAU 2050 scenario, since this has not been analysed or adjusted in the modelling in this study. The existing technologies which grow in the Heat Roadmap scenarios are extremely important and represent the most important changes required. Hence, the change required can start today based on technologies that are already available and even if none of the new technologies required are developed sufficiently, the Heat Roadmap scenarios will still have a positive impact (see section 4.2). The new technologies that should ideally also be developed for the Heat Roadmap scenarios are (see Figure 14): 37

57 Large-scale solar thermal to supply district heating networks. Centralised geothermal to supply district heating networks. Industrial excess heat to supply district heating networks. Large-scale heat pumps to supply district heating networks. Large-scale electric boilers to supply district heating networks. Concentrated solar power for electricity production. Tidal power for electricity production. It is natural that a large number of the new technologies relate to district heating, since this is expanded significantly in all five countries. However, as mentioned earlier, the exact mix of heat supply for the district heating systems has not been optimised here, so in the future some of these resources may become more dominant. For example, if large-scale solar thermal develops faster than geothermal heat, then the role of large-scale solar could be more significant than anticipated here. Furthermore, these new technologies are not as significant in the final Heat Roadmap scenarios as the contribution from technologies which exist today. Finally, as existing technologies expand and new technologies are developed, others must be replaced. The main technologies in decline during the implementation of the Heat Roadmaps are: The heat demand in buildings, which is reduced as the heat savings are implemented. The heat production outside of district heating areas, which is primarily from gas boilers and oil boilers in the Ref 2010 scenario. These are primarily replaced by a combination of heat savings (see section 5.1), district heating in the urban areas (see section 5.2), and individual heat pumps in the rural areas (see section 4.1). The heat produced from individual biomass boilers is also reduced in the Heat Roadmap scenarios compared to today. Although biomass boilers are utilised in the Heat Roadmaps, the biomass is prioritised for other parts of the energy system such as industry and transport. This is discussed in more detail in section 4.1. Condensing power plants for electricity production, which are replaced with CHP plants that produce both electricity and heat. These are the changes required across all five STRATEGO countries combined. However, the changes vary from one country to the next, primarily depending on the current status of the energy system rather than the future target. The target is the same since all countries will benefit from increased energy efficiency in the heating sector using a combination of heat savings, district heating, individual heat pumps, individual biomass boilers, and individual solar. However, the STRATEGO countries all have different levels of these individual technologies today, so changes across the technologies vary. The exact changes for each country are provided in the same format as Table 11 and Figure 14 in the Appendix (see section 11.10). 38

58 Table 11: Some key technical data in the heating, cooling, and electricity sectors for the Ref 2010, BAU 2050, and HR 2050 scenarios for all five countries combined. Technical Data All Five STRATEGO Countries Combined Sector Demand / Supply / Technology Unit Ref 2010 BAU 2050 Heat Roadmap 2050 Heat Demand for Buildings TWh/year 1,033 1, District Heating - Total Production* TWh/year DH - Solar Thermal TWh/year DH - Geothermal TWh/year DH - Industrial Excess TWh/year DH - Waste Incineration TWh/year DH - Combined Heat & Power MW 23,885 39, ,312 Heating DH - Heat Pumps MW ,691 DH - Electric Boilers MW ,691 DH - Boilers MW 39,673 43, ,508 DH - Thermal Storage GWh Other Heating - Total Production TWh/year Individual Heat Pumps TWh/year Individual Biomass Boilers TWh/year Individual Solar Thermal TWh/year Cooling Demand for Buildings TWh/year Cooling Individual Cooling - Heat Pumps TWh/year (for sections 6 and 7) District Cooling - Heat Pumps** MWe 0 0 1,822 Onshore Wind MW 10,365 45,724 46,347 Offshore Wind MW 1,593 21,062 22,752 Solar Photovoltaic MW 5,521 63,803 58,984 Concentrated Solar MW 0 0 3,000 Electricity Tidal MW 0 3,536 0 Hydro MW 24,781 28,624 28,624 Power Plants MW 138, ,537 22,782 Nuclear MW 16,165 20,472 20,472 Total (including CHP) MW 220, , ,273 Total for the Heating, Cooling, and Primary Energy Supply TWh/year 3,185 3,169 2,113 Electricity Sectors Carbon Dioxide Emissions Mt/year Total for All Sectors Primary Energy Supply TWh/year 5,680 5,742 4,688 Carbon Dioxide Emissions Mt/year 1,240 1, *Includes losses in the district heating pipes. **There is no district cooling in the Heat Roadmap scenarios. This represents the amount of district cooling that is implemented when 35% of the cooling demand in the services sector is converted to district cooling, which is discussed later in sections 6 and 7. 39

59 DH - Solar Thermal DH - Geothermal DH - Industrial Excess DH - Heat Pumps DH - Electric Boilers Concentrated Solar Individual Heat Pumps DH - Waste Incineration Offshore Wind Solar Photovoltaic DH - Combined Heat & Power Individual Solar Thermal Onshore Wind DH - Boilers DH - Total Production DH - Thermal Storage Heat Savings* Hydro Heat Demand for Buildings Other Heating - Total Prod. Individual Biomass Boilers Technical Change (% of Original Value) Power Plants All Five STRATEGO Countries Combined HR 2050 vs. BAU 2050 HR 2050 vs. Ref % 2000% 1500% 1000% 500% 0% -500% New Technologies** Growing Technologies Declining Technologies Status of Some Key Technologies in the Heat Roadmap Compared to the Ref 2010 Scenario Figure 14: Status of some (not all) key technologies in the electricity and heat sectors in the Heat Roadmap scenarios compared to the Ref 2010 and BAU 2050 scenarios for all five STRATEGO countries combined. *Heat savings is a broad change that will require a very significant development in more specific technologies relating to the building envelope, which is more evident in Figure 26. **New Technologies do not exist in the current energy systems of the STRATEGO countries, so they do not have a growth rate. 4.1 Considerations when Comparing Different Individual Heating Technologies Several factors are taken into account when analysing the preferable individual heating option in the Heat Roadmap scenarios. For the other steps there is usually a general step where one solution improves all three key metrics (Energy, Environment and Economy), but the situation is more complex for the individual heating options. In relation to the costs, Table 12 indicates that there is only a small difference between the individual heating options, except for oil boilers which are significantly more expensive. It is therefore difficult to prioritise one solution above the other based on the costs, especially since these differences are so small that the cheapest options is likely to change based on reasonable changes in the assumptions (such as the cost of biomass boiler or the COP of the heat pumps). 40

60 Primary Energy Consumption for Individual Heating in Heating, Cooling and Electricity sectors(twh/year) Oil Boiler Biomass Boiler Electric Heating Heat Pumps Oil Boiler Biomass Boiler Electric Heating Heat Pumps Oil Boiler Biomass Boiler Electric Heating Heat Pumps Table 12: Changes in socio-economic costs compared to the previous step for the STRATEGO countries when implementing different individual heating options Individual Heating Options Change in Costs from Previous Step (%) Oil Boilers Biomass Boilers Electric Heating Czech Republic 8% 1% 2% -1% Croatia 2% -1% -1% 0% Italy 3% -1% 0% -2% Romania 9% 1% 1% 3% United Kingdom 4% -1% 0% 0% Heat Pumps The primary energy supply after implementing the various individual heating options in each STRATEGO country (step 3 from section 3.4) is illustrated in Figure 15 and Figure 16. As expected, oil boilers lead to a very large oil consumption and similarly biomass boilers lead to an even larger biomass demand. For electric heating and heat pumps, the electricity demand increases, which is produced by a mix of different fuels depending on the country, but in general the coal and gas consumption increases with the electricity demand. However, the scale of the electricity demand increase is much more pronounced for electric heating than it is for the heat pumps, which is expected to the much higher efficiency of the heat pumps. Similarly, it is clear across all countries that heat pumps are the most efficient out of all the individual heating solutions, since the primary energy demand is the lowest in all countries when individual heat pumps are utilised. To be more specific, the primary energy supply is approximately 10-20% less with heat pumps compared to the other individual heating options in each country (see Figure 15 and Figure 16) Renewables Nuclear Biomass Gas Oil Coal Czech Republic Croatia Romania Figure 15: Primary energy demand in the Heating, Cooling and Electricity sectors for different individual heating options in Czech Republic, Croatia and Romania. 41

61 Primary Energy Consumption for Individual Heating in Heating, Cooling and Electricity sectors(twh/year) Renewables Nuclear Biomass Gas Oil Coal Oil Boiler Biomass Boiler Italy Figure 16: Primary energy demand in the Heating, Cooling and Electricity sectors for different individual heating options in Italy and United Kingdom. The changes in primary energy demand also affects the CO 2 emissions when implementing different individual heating options, as displayed in Table 13. Oil boilers and electric heating increase emissions while the biomass boilers and heat pumps decrease emissions. Hence, from a CO 2 emission perspective either biomass boilers or heat pumps are preferable. It is however important to note that biomass boilers only have the lowest carbon dioxide emissions as it is assumed that biomass consumption is carbondioxide neutral, which has been heavily debated recently, and a changed carbon emission factor for biomass consumption will therefore also impact the comparison of emissions from biomass boilers and the other alternatives. So far, this means that biomass boilers and heat pumps both decrease the carbon emissions and they have similar costs, but the heat pumps are the most efficient. This leads to the final key consideration, which is the potential resource available for each of these technologies. Table 13: Changes in CO 2 emissions compared to the previous step for the STRATEGO countries when implementing different individual heating options. Individual Heating Options Change in CO2 from Previous Step (%) Electric Heating Heat Pumps Oil Boilers Biomass Electric Boilers Heating Czech Republic 5% -6% 5% -3% Croatia 4% -7% 7% -4% Italy 3% -5% 1% -4% Romania 8% -7% 22% 1% United Kingdom 2% -5% 1% -4% 42 Oil Boiler Biomass Boiler Electric Heating United Kingdom Heat Pumps Heat Pumps Although biomass is renewable, it is recently perceived as a very limited resource that should be prioritised for sectors of the energy system where 1) it offers the most benefit and 2) where there are no alternatives, such as electricity. Recent studies that have analysed the decarbonisation of the complete

62 energy system have concluded that biomass is most valuable in the transport sector [35 37]. Here it can be used in heavy-duty and long-distant transport where very few alternatives are available to replace fossil fuels. These studies indicate that biomass consumption in the Heating, Cooling and Electricity sectors should therefore be minimised, since other alternatives exist for these sectors. This is also evident in Figure 17 and Figure 18 for the STRATEGO countries. These figures present the biomass potentials for each country according to Background Reports 8 and 9, along with the biomass consumption corresponding to two different scenarios: firstly, the biomass demand used only for individual biomass boilers if these are chosen to cover the entire individual heating demand, and secondly, the biomass demand is presented when 50% of the fossil fuel required in the BAU2 scenarios is based on biomass. The latter demonstrates how much biomass would potentially be necessary to decarbonise the entire energy system, including industry and transport, assuming further energy efficiency is carried out so that only 50% of the fuels across all sectors will be necessary in the future. When considering the entire energy system, including 50% of the fossil fuels in the industrial and transport sectors, then the biomass demand in all countries exceeds the available biomass potentials. Although Romania has the largest biomass potential compared to the fuel demand it is still likely to be a challenge to produce enough biomass to completely decarbonise the energy systems. This demonstrates the long-term concern of supplying enough biomass when deep decarbonisation is required across the entire energy system. Heat pumps can minimise the overall primary energy supply and minimise the long-term reliance on biomass, while also reducing the carbon dioxide emissions at a similar cost to biomass boilers. Therefore, considering this broader effect on the energy system, individual heat pumps are recommended as the primary individual heating technology in the Heat Roadmaps here. The type of heat pumps are assumed to be 50% ground-source heat pumps and 50% air-source, as no further analysis was undertaken to identify the optimal mix. The analysis here is very extreme, since there is only one individual heating technology analysed each time. However, in reality there will likely be a mix of individual heating technologies depending on the very local conditions. For example, a building might be located next to a forest and thus have easy and cheap access to some biomass. Therefore, although the scenarios here reflect one specific technology, in reality heat pumps are likely to be the main individual heating technology, rather than the only individual heating technology. To account for this mix, 5% of the individual heat demand is provided by individual solar thermal and 5% by biomass boilers in the Heat Roadmap scenarios for all countries. 43

63 Biomass (TWh/year) Mapping PlanEnergi Biomass Boilers BAU 50% Fossil fuel Mapping PlanEnergi Biomass Boilers BAU 50% Fossil fuel Mapping PlanEnergi Biomass Boilers BAU 50% Fossil fuel Biomass (TWh/year) Potential from Different Sources Consumption for Different Scenarios Czech Republic Croatia Romania Figure 17: Biomass potentials for Czech Republic, Croatia and Romania compared to the biomass consumption when 1) biomass demand for biomass boilers only to cover the entire individual heating demand and 2) if biomass is required to replace 50% of the fossil fuels in the BAU2 scenarios. The biomass potentials from the Mapping in Background Report 9 and from PlanEnergi in Background Report 8 use different methodologies (e.g. no energy crops are included in the mapping), so the potentials estimated are different. Potential from Different Sources Consumption for Different Scenarios Mapping PlanEnergi Biomass Boilers Italy BAU 50% Fossil fuel Mapping PlanEnergi Biomass Boilers United Kingdom BAU 50% Fossil fuel Figure 18: Biomass potentials for Italy and the United Kingdom compared to the biomass consumption when 1) biomass demand for biomass boilers only to cover the entire individual heating demand and 2) if biomass is required to replace 50% of the fossil fuels in the BAU2 scenarios. The biomass potentials from the Mapping in Background Report 9 and from 44

64 Primary Energy Supply for the Heating, Cooling, and Electricity Sectors (TWh/year) Carbon Dioxide Emissions for the Heating, Cooling, and Electricity Sectors (Mt/year) PlanEnergi in Background Report 8 use different methodologies (e.g. no energy crops are included in the mapping), so the potentials estimated are different. 4.2 Quantification of the Impact in the Individual Steps The final results from each step in the heating analysis are presented in this section for each country, including the primary energy supply, carbon dioxide emissions and annual energy system costs. Some figures are only shown for Italy, which is used as an example to show some of the more detailed changes in the results. However, the same figures are available for all of the STRATEGO countries in the Appendix of this report Primary Energy Supply and Carbon Dioxide Emissions In the example for Italy in Figure 19, the fuel mix and carbon dioxide emissions are illustrated for all steps including the 2010 reference and the 2050 BAU scenarios. It shows how the efficiency of the energy system is improved during the transition from the heating sector in the BAU 2050 scenario to the highefficiency heating system proposed in the Heat Roadmaps. The primary energy supply is reduced in combination with a reduction in the carbon dioxide emissions, since the majority of the fuel savings consist of fossil fuels Italy 250 Electricity Import(+) / Export(-) Wave & Tidal Geothermal Heat Solar Heat Geothermal Electricity Solar Electricity Wind Hydro Waste Biomass (excl. waste) 0 0 Nuclear Natural Gas Oil Coal CO2 Emissions Figure 19: Step impacts on the primary energy supply and CO 2-emissions in the Heating, Cooling and Electricity sectors for Italy. In Figure 20 and Figure 21, the development in total primary energy supply is demonstrated for all the countries as well as the developments in carbon dioxide emissions. The primary energy supply trends show a decreasing demand for Czech Republic, Croatia and Romania in all the steps following the BAU 2050 scenario, although it is relatively constant after the individual heating in step 3 to the final Heat Roadmap scenario. This indicates that the largest energy efficiency potentials occur when heat savings, district heating, and individual heat pumps are added, rather than in the final steps where the district heating supply is optimised. As expected, the primary energy improvements also reduce the carbon 45

65 Primary Energy Supply for the Heating, Cooling, and Electricity Sectors (TWh/year) Carbon Dioxide Emissions for the Heating, Cooling, and Electricity Sectors (Mt/year) dioxide emissions compared to the 2050 BAU scenario. The reductions in carbon dioxide emissions differ between countries according to the fuel mix in the BAU 2050 scenario: for example, the reductions are less in Croatia where there is a higher share of renewable energy compared to the Czech Republic, which has a large share of coal consumption in the BAU 2050 scenario. Romania has an unusual change in carbon dioxide emissions for step 3 and 4. These unusual changes occur since almost all of the power plants in Romania use coal, whereas in other countries, the power plants are typically a mix of coal and gas. In step 3, it occurs when the heat pumps are installed for two key reasons: 1) there is a relatively high share of biomass boilers in the Romania BAU 2050 scenario and 2) the additional electricity required for the heat pumps is primarily provided by coal. This means that biomass is effectively replaced by coal in step 3 for Romania. In the final Heat Roadmap Romania scenario, this extra coal is replaced with the biomass that is saved and as displayed in Figure 20, this reduces the carbon dioxide emissions significantly, even to a level that is below step 2 when the biomass boilers were in place. In step 4, the carbon emissions also increase when new renewable heat is introduced. This occurs since the gas-based CHP production is reduced and the shortfall in electricity production is compensated for by coal-based condensing power plants. As mentioned previously, it is more likely that the saved biomass will be used to produce the shortfall in electricity, rather than using additional coal, which is implemented in the final Heat Roadmap Romania scenario. Therefore, adding heat pumps in step 3 and renewable heat in step 4 do improve the efficiency and carbon dioxide emissions of the system when the biomass saved is used instead of coal, but this is only evident in the final Heat Roadmap Romania scenario and not in the steps themselves. CZ PES HR PES RO PES CZ CO2 HR CO2 RO CO Ref 2010 BAU 2050 Step 1 Savings Step 2 DH Step 3 Individual Heat Step 4 RE Heat Step 5 Large HP Heat Roadmap 0 Figure 20: Primary Energy Supply (PES) and CO 2-emissions for Czech Republic, Croatia and Romania. The trends from the Czech Republic and Croatia also apply to Italy and the United Kingdom, which generally have a lower primary energy supply and lower carbon emissions as more measures are implemented. The primary energy supply reduction is particularly large for the United Kingdom, which is likely due to the very low district heating share for residential and services buildings in the BAU 2050 scenario (<2% of the heat demand). Consequently, the largest emission reductions are achieved in the UK 46

66 Primary Energy Supply for the Heating, Cooling, and Electricity Sectors (TWh/year) Carbon Dioxide Emissions for the Heating, Cooling, and Electricity Sectors (Mt/year) when more district heating is added, while at the same time the centralised plants are converted from coal and gas electricity plants to gas-based CHP plants. It is also interesting to note that the amount of natural gas required in the final Heat Roadmap scenario is less than it is in step 1. When district heating is implemented, natural gas is used in CHP plants since these are the most flexible form of thermal production, so they are most suitable when accommodating large amounts of wind and solar power on the electricity sector. However, the amount of natural gas is lower in the Heat Roadmap scenarios since there is more natural gas saved in the buildings when district heating is implemented, than is required in the final Heat Roadmap scenarios to power the CHP plants. Therefore, the decision to use natural gas in the CHP plants to improve the electricity sector has not resulted in an extra dependence on natural gas for any of the STRATEGO countries, due to the energy efficiency improvements and renewable energy that could be implemented in the following steps. IT PES UK PES IT CO2 UK CO Ref 2010 BAU 2050 Step 1 Savings Step 2 DH Step 3 Individual Heat Step 4 RE Heat Step 5 Large HP Heat Roadmap Figure 21: Primary Energy Supply (PES) and CO 2-emissions for Italy and United Kingdom The reductions in carbon dioxide emissions vary significantly in absolute terms between countries, so Figure 22 displays the annual CO 2 emissions per capita for all of the countries. This suggests that the reductions from BAU 2050 to the Heat Roadmaps are between 1-3 tonne/capita/year, with the largest per capita reduction in the Czech Republic. This is most likely due to the very large dependence on coal in the Czech Republic. 47

67 Unit Carbon Dioxide Emissions (t/capita/year) CZ HR IT RO UK Ref 2010 BAU 2050 Step 1 Savings Step 2 DH Step 3 Individual Heat Step 4 RE Heat Step 5 Large HP Figure 22: Carbon Dioxide Emissions per capita/year for all the STRATEGO countries. Heat Roadmap Energy System Costs As presented already in Table 8 and Table 9, the overall costs of the energy system are reduced when the Heat Roadmap scenario is implemented. A more detailed breakdown of these costs is provided here for each step for Italy in Figure 23. These results indicate that in addition to the overall costs, the structure of the costs also changes during the transition towards the Heat Roadmap scenario. Compared to the original BAU 2050 scenario, the final Heat Roadmap Europe scenario has a higher share of investments and a lower share of fuel costs. This happens due to the increasing energy efficiency in the system, which reduces the fuel consumption as more investments are made in infrastructure such as heat savings, district heating grids, CHP plants, individual heat pumps, and renewable energy production plants. Similar figures and trends are available for the other STRATEGO countries in the Appendix to this report. Since the Heat Roadmap Europe scenarios have a higher proportion of investments, it is likely that they would also lead to the creation of more jobs within the countries [3,7,37]. This has not been analysed here, but typically a reduction in fossil fuels will lead to a reduction in imports in most European countries and hence an improved balance-of-payment, while replacing this with spending on local infrastructure will support more domestic jobs within the country. The overall impacts of the steps on the energy system costs in the Heating, Cooling and Electricity sectors of all STRATEGO countries are illustrated in Figure 24 and Figure 25. Like in Figure 23 for Italy, here it is evident that the largest reduction in the costs occurs in step 1 when the heat savings are implemented, while after that the costs are relatively stable for most countries until the Heat Roadmap scenarios. The largest cost reduction, apart from the heat savings, occurs when implementing more district heating, especially in the UK and Italy. For the UK, the costs are reduced significantly for district heating because there is a high heat density in the country and there is a large amount of excess heat that is wasted in existing power plants and industry. Even though the total costs remain relatively stable after the heating savings are implemented, it is important to note that the structure of the costs changes in a similar fashion to those presented in Figure 23 for Italy (see Appendix). In other words, the share of investments 48

68 Annual Socio-Economic Costs for the Heating, Cooling, and Electricity Sectors (Billion /year) increases as more energy efficiency measures are implemented. A detailed breakdown of the total investments and the annual costs for the BAU 2050 and Heat Roadmap scenarios is provided in Table 14. Italy Annual Investments Operation & Maintenance Fuel Carbon Dioxide Ref 2010 BAU 2050 Step 1 Savings Step 2 DH Step 3 Individual Heat Step 4 RE Heat Step 5 Large HP Heat Roadmap Figure 23: Step impacts on the socio-economic costs in the Heating, Cooling and Electricity sectors for Italy split between investments, operation and maintenance, fuels and CO 2. As mentioned previously, maintaining the same overall costs while increasing the proportion of investments is likely to result in additional jobs, since this will typically result in local investment rather than the import of fossil fuels. Table 14 and Figure 26 indicate that the current energy systems in the STRATEGO countries required very large investments on boilers for heating and condensing power plants for electricity. However, as expected, the Heat Roadmap scenarios reduce the need for these boilers due to the investments in heat savings, district heating, and individual heat pumps. In total, the five STRATEGO countries require almost 600 billion of investments in heat savings between 2010 and 2050, almost 300 billion in district heating plants, pipes and substations, as well as approximately 200 billion of investments in individual heat pumps (see Table 14). Introducing district heating and heat pumps will in turn save approximately 200 billion of re-investments between 2010 and 2050 in individual coal, oil, and gas boilers, while the CHP plants will reduce the need for almost 200 billion of re-investments in condensing power plants. Furthermore, these investments in energy efficiency measures will reduce the fuel costs by approximately 50 billion/year based on a comparison between the total BAU 2050 and Heat Roadmap fuel costs. These fuel savings will be less at the beginning since the fuel prices are lower today than in 2050, but assuming an average fuel saving of 25 billion/year over 30 years between 2020 and 2050 would result in approximately 750 billion of savings on what is mostly an imported resource i.e. fossil fuels. Overall, Table 14 and Figure 26 outline the key investments required to implement the Heat Roadmap scenarios, while also illustrating how the investments result in overall reductions in the annual costs of 49

69 Annual Socio-Economic Costs for the Heating, Cooling, and Electricity Sectors (Billion /year) Annual Socio-Economic Costs for the Heating, Cooling, and Electricity Sectors (Billion /year) the energy system. Due to these increased investments, it is very likely that the Heat Roadmap scenarios will result in more jobs within each of the STRATEGO countries while also reducing the cost of energy. As already discussed in relation to Table 11, the mix of technologies required varies between each of the STRATEGO countries, so the key investments also vary. Therefore, the total investments for different key technologies during the transition to the Heat Roadmap scenario are provided in the Appendix for each STRATEGO country, similar to Table 14 and Figure 26 (see section 11.11). 25 Czech Republic Croatia Romania Ref 2010 BAU 2050 Step 1 Savings Step 2 DH Step 3 Individual Heat Step 4 RE Heat Step 5 Large HP Heat Roadmap Figure 24: Step impacts on the socio-economic costs in the Heating, Cooling and Electricity sectors for Czech Republic, Croatia and Romania. Italy United Kingdom Ref 2010 BAU 2050 Step 1 Savings Step 2 DH Step 3 Individual Heat Figure 25: Step impacts on the socio-economic costs in the Heating, Cooling and Electricity sectors for Italy and United Kingdom. 50 Step 4 RE Heat Step 5 Large HP Heat Roadmap

70 Table 14: Total investments for some (not all) key technologies in the heating, cooling, and electricity sectors of the Ref 2010, BAU 2050, and HR 2050 scenarios. Total Investment Costs All Five STRATEGO Countries Combined Sector Technology Unit Ref 2010 BAU 2050 Heat Roadmap 2050 Heat savings Billion District Heating Substations Billion District Heating Pipes Billion DH - Solar Thermal Billion DH - Geothermal Billion DH - Industrial Excess Billion DH - Waste Incineration Billion Heating DH - Combined Heat & Power Billion DH - Heat Pumps Billion DH - Fuel & Electric Boilers Billion DH - Thermal Storage Billion Individual Heat Pumps Billion Individual Biomass Boilers Billion Individual Solar Thermal Billion Individual Gas Boilers Billion Individual Coal and Oil Boilers Billion Individual Cooling - Heat Pumps Billion Cooling District Cooling Substations** Billion District Cooling Pipes** Billion District Cooling - Heat Pumps** Billion Onshore Wind Billion Offshore Wind Billion Electricity Solar PV, CSP, and Tidal Billion Hydro Billion Condensing Power Plants Billion Total Annualised Investments* Billion /year Operation & Maintenance Billion /year Total for the Heating, Cooling, Fuel Billion /year and Electricity Sectors Carbon Billion /year Total Annual Costs Billion /year Total for All Sectors Total Annual Costs Billion /year *Annualised based on a fixed rate repayment over the lifetime of the technology and an interest rate of 3%. **There is no district cooling in the Heat Roadmap scenarios. This represents the amount of district cooling that is implemented when 35% of the cooling demand in the services sector is converted to district cooling, which is discussed later in sections 6 and 7. 51

71 Heat savings Individual Heat Pumps DH - Combined Heat & Power Solar PV, CSP, and Tidal DH - Heat Pumps District Heating Substations DH - Fuel & Electric Boilers Offshore Wind Onshore Wind Hydro District Heating Pipes Individual Solar Thermal DH - Solar Thermal DH - Geothermal DH - Industrial Excess DH - Thermal Storage Individual Biomass Boilers Individual Coal and Oil Boilers Individual Gas Boilers Condensing Power Plants Total Investment Costs (Billion ) All Five STRATEGO Countries Combined Ref 2010 BAU 2050 Heat Roadmap New & Growing Investments Declining Investments Status of Some Key Technologies in the Heat Roadmap Compared to the Ref 2010 Scenario Figure 26: Total investments for some (not all) key technologies in the heating, cooling, and electricity sectors in the Ref 2010, BAU 2050, and HR 2050 scenarios for all five STRATEGO countries combined Cost Sensitivity Analysis The energy system costs are affected by a number of cost assumptions such as the investment costs, fuel costs, and carbon prices. Therefore, a sensitivity analysis is presented here quantifying the impact of using different cost assumptions (additional sensitivity analysis are carried out in section 5.5). The costs assumed in each of the scenarios described so far are based on forecasted costs in the EnergyPLAN Cost Database for the year of 2050 [26]. To investigate the sensitivity of these costs, the results are repeated here assuming costs corresponding to the years 2010 and 2030, instead of the year Once again, Italy is used here as a case study, but similar trends can be seen for the other countries in the Appendix. The results for Italy are presented in Figure 27, which compares the total annual energy system costs when implementing all of the steps in the Heat Roadmap Italy scenario by assuming costs corresponding to the years 2010, 2030, and All the steps and changes are compared to the BAU 2050 cost. It is evident that for the 2050 costs, there is a total reduction of approximately 5-10% between the BAU 2050 and the final Heat Roadmap scenario. For 2030 the cost reduction is approximately 10% compared to the 2050 BAU scenario, while based on the 2010 costs, the Heat Roadmap and BAU 2050 scenarios are at a similar price level (the HR scenario is 3% less which is deemed the same). This indicates that when using 2010 costs, the Heat Roadmap scenarios have similar costs as the BAU 2050 scenarios, so there are is 52

72 Change in Total Annual Costs for Heating, Cooling, and Electricity (% of BAU 2050 Costs) likely no economic savings like there is for the 2030 and 2050 costs. This means that the additional energy efficiency measures in the Heat Roadmap scenario can be achieved at no extra costs, even under today s cost assumptions (i.e. 2010), but as the transition moves closer towards 2050, the Heat Roadmap changes are likely to become more economically viable. Considering the context of the transition, if it begins today, it is likely that it will begin with the most economically viable measures first and then move to the others. For example, the most economically attractive heat savings will likely be implemented before moving to the more costly ones. Therefore, it is likely that the changes in the Heat Roadmap scenario will reduce the energy system costs in reality as the transition is implemented, if the costs evolve as reported in the EnergyPLAN Cost Database [26]. Finally, Figure 27 also indicates that the economic difference between the Heat Roadmap and BAU 2050 scenarios is relatively small compared to the changes that are likely to occur in each step if the energy costs evolve as expected. For example, the cost of the BAU 2050 scenario is almost 50% less when the 2010 costs are assumed instead of the 2050 costs, which is primarily due to reductions in the fuel prices. Similarly, the cost of the Heat Roadmap Italy scenario is approximately 50% less when 2010 costs are assumed instead of 2050 costs. In contrast, the cost difference between the BAU 2050 and HR-IT scenario is only 5-10% for both 2010 and 2050 cost assumptions. Hence, future fuel prices are a much greater risk to the future costs of the energy system than investing in efficiency in the heating sector. 0% Italy 2010 Costs 2030 Costs 2050 Costs -10% -20% -30% -40% -50% -60% -70% BAU 2050 Step 1 Savings Step 2 DH Step 3 Individual Heat Step 4 RE Heat Step 5 Large HP Heat Roadmap Figure 27: Socio-economic cost changes compared to the 2050 BAU when applying 2050, 2030 and 2010 costs for Italy Sunk Costs The final important consideration in the results are the sunk costs that can occur during the transition from one heating system to another. Sunk costs are the costs that are lost in large pieces of infrastructure when they are made obsolete, since once the infrastructure is implemented, there is a certain proportion of the costs that can never be recovered again. For example, if a power plant is constructed, then a new road may have been built to that power plant. If the power plant is decommissioned, then the cost of that 53

73 road cannot be recovered even if the power plant is no longer in use, since it was specifically built for that power plant. In relation to this study the three key areas of energy efficiency are heat savings in the buildings, the introduction of district heating instead of natural gas in the urban areas, and the introduction of heat pumps, biomass boilers, and solar thermal for individual heating in rural areas. Some of these have sunk costs and some are more significant than others. Firstly, in relation to heat savings, these are an additional investment on top of the existing building stock rather than a replacement of existing infrastructure and therefore it is assumed here that they do not have an associated sunk cost. For individual heating in the rural areas, the existing fleet is primarily made up of oil boilers and biomass boilers. These are relatively small pieces of technology which can be replaced one-by-one over a longperiod of time. Typically, most consumers will replace a boiler when it has reached the end of its life and furthermore, if they are replaced by a heat pump as suggested here, then the existing central heating system can still be utilised. Therefore, when an oil boiler is replaced by a heat pump in this study, it is also assumed that there are no sunk costs. In practice, the oil storage tank is the most likely form of sunk cost that could occur, but this is a very small share of the total costs in an oil boiler so it is considered negligible here. In contrast to the heat savings and individual heating in the rural areas, the introduction of district heating instead of natural gas in the urban areas could result in significant sunk costs. There are two types of sunk costs considered here during this transition: Sunk costs in the heat supply for district heating Sunk costs in the gas network when it is replaced As already discussed on different occasions in this report, there are a variety of resources that can be utilised to supply heat to the district heating network such as excess heat from thermal power plants, waste incineration, and industry as well as renewable heat from solar thermal and geothermal heat. For solar thermal and geothermal heat there are no sunk costs since practically none of the plants in the Heat Roadmap scenarios currently existing today. In relation to waste incineration and industrial excess heat, their primary purpose is not to create heat, it is to manage waste and to produce goods respectively. Therefore, it is unlikely that most of these facilities will change their current practices or location to supply heat to a district heating network and instead, will only deliver heat if the district heating network is sufficiently close to the existing premises. As a result, it is also assumed here that these facilities do not represent a major part of the sunk costs that could occur when natural gas heating is replaced with district heating. However, the major sunk cost that could occur when a new heat supply is developed for district heating relates to the power plants. It is assumed in the Heat Roadmaps that heat can be captured from existing power plants by converting them from electricity-only condensing power plants to gas based combined-cycle CHP plants. By doing so, natural gas is effectively moved from the building level in natural gas boilers to the central level in CHP plants. This could result in sunk costs for the following reasons: The existing power plants may not be close enough to district heating network to supply heat. Therefore, the existing power plant will need to be decommissioned and a new power plant 54

74 constructed closer to the urban area. Hence, the existing power plant will have some sunk costs after it is decommissioned. If the existing power plant is located near the district heating system, it may still have sunk costs since it could be based on coal or biomass today rather than district heating. When it is converted to district heating there may be a sunk cost, such as the shipyard where the coal or biomass was once delivered to the power plant. The energy modelling is carried out by taking snapshots of the energy system under three different scenarios: a 2010 reference scenario and two potential 2050 scenarios (BAU and Heat Roadmap). Therefore, the modelling does not account for the transition between these different scenarios from 2010 and Instead it captures a snapshot of the starting point (i.e. 2010) and a two potential finishing points in When one energy system is compared to the other, the sunk costs are therefore not considered. In practice they could be added to the modelling as an additional cost, but they were not included here due to a lack of knowledge about 1) how the existing power plant fleet will be affected when different levels of district heating are implemented and 2) due to a lack of knowledge about how much of the total costs in a power plant are sunk costs. The first issue could be resolved in the future by improving the connection between the modelling and mapping developed in this study (see section 8.3), but this was beyond the scope of the STRATEGO project. Instead, a sensitivity analysis has been developed here to consider these sunk costs, to establish how big of an impact they could have on the results. In the sensitivity analysis, it is assumed that all of the CHP plants in the Heat Roadmap scenarios are new plants, which are built in addition to the BAU 2050 power plant fleet in each STRATEGO country. By doing so, the cost of the Heating, Cooling, and Electricity (HCE) sectors in Heat Roadmap scenarios are increased by 1-6% (average is 3%), as displayed in Figure 28. This varies across the STRATEGO countries since they all have different levels of CHP plants in operation today. For example, the UK and Italy have very little CHP today, while Romania and the Czech Republic already have relatively high shares of CHP in their power plant mix. Countries that have a high level of CHP today will already have their power plants located close to the urban areas where the district heating networks are located. These CHP plants will not need to be moved in the future Heat Roadmaps where the district heating system is expanded. In the extreme sensitivity scenario analysed here, countries with a high share of CHP therefore have lower sunk costs, since they have less plants that need to be relocated closer to the urban areas. To recap, the additional sunk cost that occurs when it is assumed that all non-chp plants must be relocated is an increase of approximately 3%. In contrast, the Heat Roadmap scenarios had originally reduced the costs in each country by 12-16% (see Table 9), which is more than double the new additional sunk costs in each country. Therefore, even if it is assumed that all of the existing power plants must be relocated closer to the cities to convert them to CHP plants, and it is assumed that all of their construction costs are lost as sunk costs, then the Heat Roadmap scenario will still result in an overall reduction in the energy system costs. This is an extremely conservative scenario since it is highly unlikely that 1) none of the existing power plants can be converted to CHP plants without relocating them closer to the urban areas and 2) that the sunk costs for the existing power plants are equal to 100% of the construction costs. This suggests that the cost of the final Heat Roadmap scenarios is increased by potential sunk costs when converted from electricity-only to CHP plants, but the scale of these sunk costs is unlikely to change the conclusion that the final Heat Roadmap scenarios are the same cost or even cheaper than the BAU 2050 scenario. 55

75 Increase in Costs for the Heat Roadmap Scenarios When Different Sunk Costs are Added (% of the BAU 2050 HCE Costs*) The other potential sunk cost is the natural gas grid. Even though natural gas is removed from the individual buildings, the natural gas grid is still a very important piece of infrastructure in the Heat Roadmap scenarios, primarily for the CHP plants 1. As previously mentioned, the key difference is that the BAU 2050 scenario used natural gas at the building level while the Heat Roadmap scenario uses natural gas at the central plant level i.e. in CHP plants. Therefore, the natural gas grid will still be required in the Heat Roadmap scenarios, but the smaller pipes which go to the individual buildings will no longer be necessary. These will thus result in some form of sunk costs. These have not be included in the analysis so far primarily due to a lack of knowledge about how much of the natural gas grid costs are sunk costs when it is replaced with district heating. Therefore, to examine the importance of this, a sensitivity analysis is carried out here where it is assumed that all of the natural gas grid costs that were saved when district heating was added to the BAU 2050 scenario, are added back to the Heat Roadmap scenarios. In other words, it is assumed that the entire existing natural gas grid at the building level is still maintained even though it is no longer in use. The cost of the natural gas grid is based on a fuel handling cost of ~ 3/GJ of natural gas [26,38]. By adding the cost of the existing natural gas grid, the cost of the Heat Roadmap scenarios is increased by 1-3% (average 2%), as displayed in Figure 28. Once again, even under this highly conservative assumption that 100% of the natural gas grid costs are sunk costs, the Heat Roadmap scenarios are still cheaper than the original BAU 2050 scenario. By adding the sunk costs from both the power plants and the natural gas grid, the total increase in the costs is in the region of 3-9% (average is 5%), which is still less than the cost savings in the Heat Roadmap scenarios. 100% Costs of Natural Gas Grid Removed from Buildings 100% Costs of PP Replaced by CHP Cost Savings in the HR Scenario vs. BAU 2050 (X) 16% 14% 12% 10% 8% 6% 4% 2% 0% CZ HR IT RO UK Figure 28: Change in the total annual costs in the Heat Roadmap scenarios for the heating, cooling, and electricity (HCE) sectors when additional sunk costs for power plants and the natural gas grid are added. *The results are expressed as a percentage of the BAU 2050 scenario so they are comparable with the results in Table 9. All of the sensitivity analyses carried out for the sunk costs are based on the 2050 cost assumptions, so these have also been repeated based on 2010 costs. The results are presented using two different 1 The natural gas grid will also be essential to decarbonise the industry and transport sectors, but analysing these is beyond the scope of STRATEGO so more information can be obtained here: 56

76 Change in Total Annual Costs for Heating, Cooling and Electricity (% of Original Costs) assumptions for the sunk costs: 1) where 100% of the replaced natural gas grid and existing power plant costs are maintained, similar to the previous analysis and 2) where 50% of the natural gas grid and existing power plant costs are maintained. The 50% sensitivity is included since it is highly unlikely that any of the natural gas grid or power plants have sunk costs in the region of 100%. However, since the exact proportion of sunk costs is unknown, a sensitivity of 50% is also included to illustrate how the results vary. The results in Figure 29 when Assuming 2050 Costs in HR Scenarios (right side of Figure 29) are the same as those reported previously in Figure 28, except now they are reported as a percentage difference compared to the original Heat Roadmap scenario rather than the BAU 2050 scenario. In comparison to the 2050 cost assumptions, when 2010 costs are assumed the impact of the sunk costs becomes more significant. As displayed in Figure 29, the average increase in the costs is now 5-26% (average is 13%) when it is assumed that 100% of the costs are sunk costs, while it is 3-13% (average is 6%) when it is assumed that 50% of the costs are sunk costs. The costs are more significant in 2010 since the cost of fuel is lower than in As the cost of natural gas increases, the fuel becomes a more dominant part of the cost mix. In other words, as the natural gas fuel price increases, the infrastructure cost reduces as a percentage of the total costs while the fuel cost increases as a proportion of the total costs. Therefore, if the calculations are carried out using today s prices (i.e. 2010), then the assumptions used for sunk costs could have an impact on the results, but as fuel prices increase in the future, the impact will diminish to an almost negligible level, or at least to a level where its impact is comparable to many other sensitive assumptions (see section 5.5). Gas Grid & PP: 50% Sunk Costs Gas Grid & PP: 100% Sunk Costs 30% 25% 20% 15% 10% 5% 0% CZ HR IT RO UK CZ HR IT RO UK Assuming 2010 Costs for the HR Scenarios Figure 29: Change in the total annual costs in the final Heat Roadmap scenarios for the heating, cooling, and electricity (HCE) sectors using different assumptions for the amount of sunk costs related to the natural gas grid and power plants. In conclusion, the sunk costs will increase the costs of the energy system, but it is unlikely that this increase will be sufficient to make the Heat Roadmap scenarios more expensive than the BAU 2050 scenarios. This is due to the relatively small increases in the total costs compared to the savings in the Heat Roadmap scenarios, even when the assumptions for the amount of sunk costs are extremely high. However, the sunk costs in the power plants and gas grids may be a concern in the short term while 57 Assuming 2050 Costs in the HR Scenarios

77 natural gas prices remain low, thus making the grid a higher proportion of the total natural gas heating supply costs. Finally, the changes reported here for sunk costs are much smaller than the changes reported previously in section 4.2.3, when the fuel, investment, carbon, and maintenance costs were adjusted based on different years i.e. 2010, 2030, and This indicates that the future development of the fuel prices in Europe are more significant than the inclusion or exclusion of sunk costs from the analysis. In general, the sunk costs should be minimised by utilising existing power plants where feasible and by implementing the transition over a long time horizon, so technologies are replaced at the end of their lifetime. 58

78 5 Discussion for the Heating Sector Several issues concerning the results and findings for the heating sector are discussed here in more detail. The discussion covers some deeper aspects relating to heat savings, heat networks, individual heating, the sensitivity analysis and availability of resources in the future. This chapter contains a number of key messages that support the conclusions from this study, along with some more detailed reflections. 5.1 Heat Savings Key Message: Heat savings should begin today and be strongly supported in existing buildings while they are undergoing other refurbishments and in new buildings, to the point where their total heat demand is reduced to kwh/m 2, depending on the specific country. The results indicate that heat savings have a positive impact on economy, energy, and environment for all the countries analysed in this study. The level of heat savings recommended in this study based on the energy modelling is 30-50% of the total heat demand, depending on the country. This number relates to the total reduction across the entire building stock, so the reduction may be higher in some buildings than others. For example, older buildings are more likely to have higher levels of heat savings. At the individual building level, this number is more comprehensible when defined as the resulting unit heat demand (i.e. heat demand per unit of floor area in kwh/m 2 ). Table 15 presents the total heat demand before and after the heat savings are implemented in each STRATEGO country, along with the corresponding unit heat demand. Here it is evident that a 30-50% reduction in the heat demand equates to a unit heat demand in the range of kwh/m 2. Beyond this point, it the cost of additional savings is likely to be more expensive than supplying sustainable heat. This should not be viewed as an exact value for each building, but it can be used as a guideline when renovating a building or designing a policy to support the retrofit of buildings. Table 15: Heat demand in the BAU 2050 and Heat Roadmap scenarios (i.e. before and after heat savings are implemented as total heat demand and kwh/m 2. The UK is not included since it is not included in Background Report 3a. Country Floor Area 2050 (Background Report 3a) Heat Demand Before Heat Savings (BAU 2050) Heat Demand After Heat Savings (HR 2050) All Buildings Total Unit Total Unit Million m 2 TWh kwh/m 2 TWh kwh/m 2 Czech Republic Croatia Italy Romania The cheapest level of heat savings identified here (i.e % reduction) will be difficult to implement and in some cases represent the maximum level of heat savings that are technically feasible, even with very strong political support (see Figure 8). The amount of heat savings is not only limited by the cost, but it is also limited by the other activities taking place in the building stock. Firstly, to ensure that the heat savings are economically viable, they should be implemented at the same time as other renovations are carried out on the buildings. By doing so, the investment costs are reduced since the heat savings are only a marginal additional cost on top of other measures that are taking place anyway, such as an extension or maintenance. If the heat savings are the only measure being implemented (i.e. direct costs), then it is 59

79 likely that they are more expensive than supplying heat [3]. This means that the amount of heat savings that can be economically implemented each year is restricted by the amount of buildings that are either undergoing other renovations or the amount of new buildings, which combined usually account for ~2% of the building stock each year. This means that the heat savings need to implemented gradually over a long-term time horizon and that this implementation should begin as soon as possible. It also means that if this process does not begin soon, it will be more expensive to catch up at a later stage by implementing the heat savings as direct costs rather than as marginal costs. Finally, it is important to acknowledge that heat savings may not have the impact that is expected, usually due to changes in the occupant s behaviour after the savings have been implemented. For example, a recent study based on the city of Geneva indicates that the actual space heating demand in renovated multi-storey buildings was % higher than what it was calculated to be before the savings were installed [39]. This rebound potential is an important consideration when designing the heat supply, since it is important to consider the impact of a higher heat demand than expected. 5.2 Heating Networks (Urban Areas) Key Message: District heating can be expanded significantly in all countries. If district heating is expanded in the urban areas (primarily larger cities), then it can potentially reduce the costs of the energy system, reduce fossil fuel imports, reduce carbon dioxide emissions, increase the efficiency of the energy system, and increase renewable energy production. The results in STRATEGO WP2 indicate that district heating should be expanded in all the countries up to a level of approximately 40-70% of the heat demand, depending on the specific country (see Table 10). This is an extremely large increase for some countries, especially for the Italy and the UK which currently have very low levels of district heating (less than 2% for residential and services). Implementing district heating up to these levels improves the energy efficiency of the heating, cooling and electricity sectors while also reducing energy system costs and reducing carbon dioxide emissions. The exact level of district heating varies across countries depending on their local conditions and resources. Below is a description of some of the key characteristics that determine if district heating expansions are feasible in a country based on the STRATEGO findings. Firstly, the optimal level of district heating depends on the heat densities within the country, which is typically dependent on how close people live to one another. If people live close to one another, then a smaller amount of district heating pipes are required to connect their heat demands to a district heating network. The heat density is a balance between the heat demand and the size of the area. This is why urban areas, and especially large cities, are usually very attractive for district heating expansions, since they have a lot of heat demand with a relatively small area. The amount of heat located in areas with a sufficiently high heat density for district heating is calculated and mapped in Background Reports 4, 5, and 6. Current trends suggest that cities will expand in the future, so more people are likely to live closer together. This is not considered in this study, but could potentially increase the optimal level of district heating identified here. Secondly, the availability of resources has a large impact on the feasibility of expanding a district heating network, since the resources determine the cost of supplying the heat. These resources can be in the form of excess heat (i.e. from existing power plants, industries or waste incinerators), where currently this heat is wasted in rivers, seas or in the air instead of being utilised in a district heating network. The 60

80 resources can also stem from renewable sources such as solar thermal, geothermal or large heat pumps using ambient heat sources, but the availability of these resources varies according to the local conditions. If all of these resources have been utilised, then new production plants such as CHP plants and boilers can also be built. For all the STRATEGO countries, there is more existing excess heat today and potential renewable heat for the future available than required to supply the entire district heating proposed in these countries. For example, the excess heat which is currently wasted from industry alone equals to around half of the total district heating demand in all of the countries. Different mixes of these excess heat and renewable heat resources are utilised in the final Heat Roadmap scenarios for each STRATEGO country, which has already been discussed in section 3.5. Thirdly, the district heating system creates synergies across the different sectors in the energy system, especially electricity, heating, cooling, and industry (as discussed in section 2.1). For example, if largescale heat pumps are installed on district heating networks, then they can be used in combination with thermal storage to integrate excess wind or solar power in the electricity sector. However, the synergies available across the different sectors can vary depending on the design of the energy system in that specific country. For example, if these is only a small share of wind or solar power installed a country, then it is unlikely that large-scale heat pumps will be necessary on the district heating network to integrate surplus production, but if there is a high share of wind or solar, then they are usually a very valuable asset [40]. Therefore, the synergies that can be utilised across the electricity, heating, cooling, and industry sectors due to the installation of district heating, depend on the technologies and design of that country s energy system. This also demonstrates why district heating cannot be seen as an isolated technology, instead it is a network that is part of a larger energy system. This became evident during the modelling in the STRATEGO countries since some countries had a higher share of intermittent renewable energy (Croatia), while others had almost no renewables (Czech Republic), and similarly, some countries had a high share of nuclear power (Czech Republic), while other countries had no nuclear power (Italy). These are some examples of how the surrounding energy system structure can affect the synergies that can be utilised when district heating is implemented. Hence, this also defines the optimal level of district heating identified for each STRATEGO country. In conclusion, identifying the optimal level of district heating is a complex process which is affected by a number of surrounding factors in the energy system, and therefore it is important to analyse the potential of district heating from a complete energy systems perspective. Focusing on the cost breakdown of the heating sector in the different countries indicate that the district heating pipes represent an unexpectedly small part of total costs for the district heating system. Firstly, the district heating system consists of three key parts: heat supply, district heating pipes, and individual substations in the buildings (these are heat exchangers which transfer the heat from the pipes into the buildings). The cost of the heat supply is extremely difficult to quantify since quite often the supply is connected to another sector also. For example, CHP is connected to heat and electricity, while waste incineration is connected to heat and waste treatment. However, a typically production price on a district heating network is ~ 50/MWh: this is the average cost of heat production in the 20 largest district heating systems in Denmark [41]. Assuming this average cost for the heat supply, along with the same costs used for the year 2050 for the other district heating components, Figure 30 presents the estimated total annualised costs for a district heating system supplying 50,000 dwellings. Here it is evident that the district heating pipes account for only ~5% of the total costs. This is partly due to the relatively long lifetime of the district heating pipes, which is 40 years, in comparison to the other components, which have lifetimes 61

81 Total Annual Costs (M /year) of approximately years. These costs also represent the costs of district heating in high heat density areas such as city centres, so these pipe costs will likely increase as the heat density is reduced, but it is unlikely that on average the pipe costs will be more than ~15% of the total costs. Therefore, although the district heating pipes can account for a large part of the initial investment, they account for a relatively small share of the district heating costs. This means that the cost of the heat supply and the individual substations are more critical over the lifetime of the district heating system than the cost of the pipes. In line with the previous point, during the analysis here it also became apparent that the cost of the individual heating is very significant when comparing various heat alternatives to one another. For example, Figure 30 has already demonstrated how the costs of the substations in the buildings are higher than the costs of the pipes on a district heating network. However, individual substations are the cheapest form of individual heating technology [26], while other technologies such as gas boilers, biomass boilers, and heat pumps have larger investment and maintenance costs. Therefore, the price difference between the individual heating technologies is a key assumption when comparing different heating technologies with one another. This is demonstrated again in Figure 30 by estimating the cost of heating the 50,000 buildings using natural gas instead of district heating. Once again it is evident that the individual natural gas boilers represent a much higher share of the production costs than the pipes in the district heating scenario, and furthermore, they represent approximately one-third of the total costs. This can become even more extreme for heating units with higher investments, especially heat pumps. The key message here is that the visible and relatively large upfront cost of the district heating pipes represents a relatively small part of the production price, compared to the typically less visible cost of the heating unit within the building itself. In both cases, the fuel/heat supply cost is the most important consideration thus demonstrating the importance of energy efficiency DH Substation DH Pipes DH Heat Supply NG Boiler NG Fuel 10 0 District Heating (DH) Natural Gas (NG) Figure 30: Estimated cost of heating 50,000 typical dwellings using natural gas boilers and district heating. It is assumed that each dwelling has an annual heat demand of 15 MWh, the natural gas and heating unit costs are from the EnergyPLAN Cost Database [26], while the district heating supply price is assumed to be 50/MWh [41]. 62

82 5.3 Individual Heating (Rural Areas) Key Message: Electric heat pumps are the most sustainable option for heating in the rural areas, where the majority of buildings are single-family homes, which is based on balance between costs, efficiency and resources. Further research is required to define the smaller share of other individual heating technologies that will supplement these heat pumps, such as biomass boilers and solar thermal. The individual heating options are mostly relevant in rural areas where network solutions are not viable due to the low heat densities. In these areas, a comparison of different alternatives in the form of oil boilers, biomass boilers, electric heating and heat pumps is conducted here with the results indicating that the costs are the same between these alternatives, except for oil boilers, which are more expensive. The other factors that influenced the comparison are the efficiencies and the resources available. The conclusion is that the heat pumps are more efficient and can rely on electricity from a number of different sources, while the biomass boilers use a large amount of biomass, which should be reserved for the transport and industrial sectors when converting towards a smart energy system. This is already discussed in sections 2.2 and 0. The methodology used in this study to calculate the individual heating unit costs also has a major influence on overall costs of the biomass and heat pump alternatives, which is discussed in section 8. Finally, as stated previously, the scenarios here are extreme for individual heating as all of the individual heating is based on a single technology during the assessment, whereas in reality there will be a mix. More research is necessary in the future to identify this mix, but the key recommendation here is that heat pumps will most likely be the primary individual heating technology in a sustainable heating sector. 5.4 Renewable Electricity, Renewable Heating, and Biomass Resources Key message: In all the countries there are large amounts of renewable and excess heat available, but there is a limited supply of renewable electricity, while there is likely to be a shortfall of biomass if the aim is to decarbonise the entire energy system. Figure 31 gives an overview of the different renewable energy resources available, along with the corresponding demand that they are likely to fulfil. The potential resources and demands are not directly comparable, since other resources and fuels can also be used in these sectors, but the aim here is to establish if each renewable resource is likely to be scarce or plentiful. The comparison suggests that there is a relatively large amount of renewable and excess heat available for the STRATEGO countries (Background Reports 7, 8, and 9), when compared against the future district heating demand that has been identified in the Heat Roadmaps here. On average there is almost 3 times more heat available in each of the countries than is required to meet the district heating demands proposed in the corresponding Heat Roadmaps. Furthermore, these heat supplies come from a variety of different sources such as power plants, industry, waste incineration, solar thermal, and geothermal resources, as displayed in Figure 32. Therefore, even if one resource is not available in the future, it is likely that there will be another to replace it. For example, if the heat produced from power plants is reduced due to increases in wind and solar power production, then the more heat can be obtained from industry or waste incineration instead of the power plants. Similarly, the waste incineration potentials here are only for existing plants so they do not account for potential increases that may occur if waste incineration is expanded to reduce landfill. This comparison suggests that there is unlikely to be a shortage of excess heat or renewable heat available for district heating networks in the future. 63

83 Sustainable Energy Resources Available Renewable & Excess Heat Potential (% of District Heat Supply)* Renewable Electricity Potential (% of Electricity Supply)** Biomass Potential (% of Demand if 50% of Fossil Fuel is Replaced for All Sectors in BAU2)*** 500% 450% 400% 350% 300% 250% 200% 150% 100% 50% 0% Czech Republic Croatia Italy Romania United Kingdom Figure 31: Renewable and excess heat potentials, renewable electricity and biomass potentials as well as the district heating, electricity and fossil fuel demands in the Heat Roadmap scenarios. *Includes excess heat from power plants, industry and waste incineration (Background Report 7) as well as renewable heat form solar thermal (Background Report 8), geothermal (Background Report 9). **Renewable electricity potentials are from Background Report 8 and include wind power, solar PV, concentrated solar, geothermal, wave, tidal, reservoir hydro and river hydro. ***Biomass potentials are also from Background Report 8 and include residual and dedicated energy crops, wood, waste and biogas. 64

84 Excess & Renewable Heat Potentials and District Heating Supply (TWh/year) Thermal Power Plants Geothermal Solar Thermal Industrial Excess Waste Incineration HR District Heating Supply Resources Supply Resources Supply Resources Supply Resources Supply Resources Supply Czech Republic Croatia Italy Romania United Kingdom Figure 32: Excess and renewable heat potentials for each of the STRATEGO countries, in comparison to the district heating supply proposed in each of their corresponding Heat Roadmaps (see Background Reports 7, 8, and 9). In comparison, the renewable electricity potential is much lower than the electricity demand in all of the STRATEGO countries. All of the STRATGO countries have a renewable electricity potential of approximately 50% of the electricity demand, except for the Czech Republic, which can only cover 7%. These comparisons should be viewed with caution since the assumptions can often vary considerably across studies analysing the renewable energy potential in the future. However, based on existing knowledge, which is the focus of the review in Background Report 8, the comparison indicates that there is more likely going to be a shortage of renewable energy on the electricity grid, than a shortage of renewable heat on the district heating networks in the STRATEGO countries. Furthermore, the biomass potentials from Background Report 8 indicate that in three countries there is enough biomass potential to replace all of the fossil fuels in the heating, cooling and electricity sectors, but the other two countries (Italy and the UK) have higher fossil fuel demands in the Heating, Cooling and Electricity sectors than the biomass potential. If 50% of the BAU 2050 fossil fuel demand is converted to biomass, then none of the countries will have enough biomass available. As discussed previously in section 4.1, this demonstrates the importance of considering the impact of the solutions in the heating sector on the entire energy system. If the aim is to decarbonise the entire energy system, it is likely that the majority of the biomass available will need to be reserved for the industry and transport sectors where very few alternatives are available to replace fossil fuels, compared to the electricity, heating, and cooling sectors where there are many other resources. It is important that future research evaluates both the likely demand and supply of bioenergy in the future for Europe and the individual Member States. To conclude, there are large amounts of renewable and excess heat resources available to the extent that they even exceed the district heating demand in the Heat Roadmap scenarios while there is a lack of renewable electricity potentials and biomass resources if it is to replace respectively the fossil fuels and 65

85 meet the entire electricity demand. These resource issues therefore poses new challenges if the entire energy system is to be converted into renewable energy and energy efficiency measures therefore also has to be implemented in the electricity, industry and transport sectors. 5.5 Sensitivity Analysis Key Message: future projections for the cost of fuels, investments, operation, and maintenance have a very large impact on the overall energy system costs, but they do not change the key recommendations in the Heat Roadmap scenarios. There is a very large number of assumptions in the calculations in this study to reach the overall results. After completing the scenarios, a number of sensitivity analysis were carried out to evaluate how robust the Heat Roadmap scenarios are to reasonable changes in the assumptions. The most sensitive assumption identified related to the costs assumed, which are defined based on the costs for the years 2010, 2030, and 2050 in the EnergyPLAN Cost Database [26]. The results from the cost sensitivity analysis have already been presented in section 4.2.3, since these assumptions had a very large impact on all scenarios. However, other sensitivity analyses which had a much smaller influence are also presented here in Figure 33 and Figure 34. The sensitivity analyses included here are as follows: Increasing the interest rate to 6%: this was 3% in all of the calculations so far. Removing the minimum requirements for grid stabilisation in the EnergyPLAN tool: these were originally 30% grid stabilisation, 20% minimum power plant operation and 10% minimum CHP plant operation. Improving the capacity factor for onshore wind by 10% points in each country: this usually increased the capacity factor from ~17% to 27% Making the district heating pipes three times more expensive in terms of investments and operation and maintenance: this accounts for likely increases in the district heating pipe costs if heat savings are implemented, since these savings are likely to reduce the heat densities calculated in the mapping in Background Reports 4, 5, and 6. Since it was previously found that year of the costs chosen has the largest impact on the overall energy system costs, these sensitivity analyses are carried out for both 2050 costs and 2010 costs. The analysis shows that the sensitivity of doubling the interest rate has the largest impact out of all these factors: the overall energy system costs increasing by between 3-10% with the 2050 costs and by 5-7% with the 2010 costs. The other factors change have almost no impact on the overall system costs, with the changes in the region of 0-2% compared to the original costs and assumptions applied in the Heat Roadmap scenarios. For all issues considered here, the change in the Heat Roadmap scenario is practically the same as the change in the BAU 2050 scenario, so these issues are unlikely to change the overall trends identified in the results. Furthermore, the changes here, even for the interest rate, are very small (max 10% change) compared to the changes highlighted earlier when costs corresponding to different years were considered (max 60% change), thus highlighting how future projections for fuel, carbon, investment, and maintenance costs are by far the most influential factors on the overall energy system costs. 66

86 Change in Total Annual Costs for the Entire Energy System (% of Original Costs) Change in Total Annual Costs for the Entire Energy System (% of Original Costs) 2050 Costs Interest Rate 6% (vs. 3%) Onshore Wind Capacity Factor (+10% Points) 12% No Grid Stabilisation (vs. 30%, 20% PP, 10% CHP) District Heating Pipe Costs x3 10% 8% 6% 4% 2% 0% -2% -4% BAU 2050 HR 2050 BAU 2050 HR 2050 BAU 2050 HR 2050 BAU 2050 HR 2050 BAU 2050 HR 2050 CZ HR IT RO UK Figure 33: Energy system cost sensitivity of changing interest rates, Grid stabilisation, onshore wind power capacity factors and district heating pipe costs for the cost year of Interest Rate 6% (vs. 3%) Onshore Wind Capacity Factor (+10% Points) 8% 7% 6% 5% 4% 3% 2% 1% 0% -1% 2010 Costs No Grid Stabilisation (vs. 30%, 20% PP, 10% CHP) District Heating Pipe Costs x3 BAU 2050 HR 2050 BAU 2050 HR 2050 BAU 2050 HR 2050 BAU 2050 HR 2050 BAU 2050 HR 2050 CZ HR IT RO UK Figure 34: Energy system cost sensitivity of changing interest rates, Grid stabilisation, onshore wind power capacity factors and district heating pipe costs for the cost year of

87 6 Quantifying the Impact of Increased Energy Efficiency in the Cooling Sector Convert 35% of the cooling demand from individual electric cooling to district cooling Key Changes Assume all district cooling is provided using conventional district cooling Centralised chillers supply the cold, cooling pipes distribute the cold, and substations pass the cold from the pipes into the buildings From a national energy planning perspective, the current profile and future development of the cooling sector is much more uncertain than the heating sector. Almost all of the cooling in Europe is currently provided by electric heat pumps, so the actual cooling demand is not usually measured. Instead, the cooling demand is usually included in the electricity demand of a building. The only place that cooling demand is actually measured is on district cooling networks which account for a very small share of the cooling supply. Furthermore, the cooling demand currently implemented in a building is not as predictable as the heating demand. For example, if two identical buildings are located next to one another, with the same profile of inhabitants (i.e. number, age, professions), then it is very likely that the heat demand in both buildings are very similar to one another. However, it is difficult to make the same conclusion for cooling, since even though both buildings would ideally need the same cooling demand, people tend to be less predictable about the level of cooling they implement. Finally, another issue for cooling is the variation. The only existing map of cooling demand across Europe before this study was produced in the Ecoheatcool project [42]. The map suggests that the cooling demand in Europe can vary by +/-40%, whereas the same report suggested that the heat demand across Europe only varies by approximately +/-20%. Each of these factors add to the uncertainty in the cooling sector, so a key part of this project was to start profiling what the cooling demand actually looks like. 6.1 Current and Future Potential Cooling Demand One of the main focuses of Background Report 4 is to profile not only today s cooling demand, but the future potential cooling demand also. A detailed overview of the cooling demand for each EU Member State is provided in Background Report 4, but here the focus is on the five STRATEGO countries. As presented in Figure 35, the first key finding in this study in relation to the cooling demand is that the current cooling demand is significantly lower than the heating demand in all STRATEGO countries. 68

88 TWh/year CZ HR IT RO UK Cooling Demand Heat Demand Cooling Demand Heat Demand 2010 Maximum Potential HR 2050* Figure 35: Current and future potential cooling demand in the five STRATEGO countries for both residential and services. *The Heat Roadmap heat demands are those after the heat savings are applied, which is usually a reduction of approximately 30-50% in the heat demand (see Table 10). To be more specific, the current cooling demand in all five STRATEGO countries is only 1-13% of the current heating demand, even in countries with relatively warm climates (see Figure 36). Even if the heat demand is reduced dramatically, in line with the recommendations from the Heat Roadmaps (HR) in section 4, the current cooling demand will still only be up to 20% of the heat demand (which is for Italy). However, the analysis in Background Report 4 also illustrates the key uncertainties relating to the cooling demand, since it estimates that only 16% of the buildings in Europe currently satisfy their cooling requirements. Again, this reflects some of the difficulties relating to the cooling sector compared to the heating sector. However, this also reflects the huge potential for the cooling demand to increase in the future. If people start meeting their cooling requirements, then the cooling demand could expand by approximately six times in Europe, with each of the STRATEGO countries having a potential expansion of 4-17 times the current cooling demand (see Figure 35). Therefore, if the cooling demand does expand rapidly in the future, in combination with a decrease in the heating demand, then the cooling demand could reach up to 30-70% of the heating demand across the five STRATEGO countries. In this context, the cooling sector will have a major influence on the rest of the energy system, but at today s levels, the heat demand is far more significant. It is beyond the scope of this study to predict how much the cooling demand will increase by in the future based on changes in people s behaviour and needs. 69

89 CZ HR IT RO UK 80% 70% 60% 50% 40% 30% 20% 10% 0% % of Current Heat Demand % of HR 2050 Heat Demand % of Current Heat Demand % of HR 2050 Heat Demand Current Cooling Demand Max Potential Cooling Demand Figure 36: Scale of the Current (2010) and Future (2050) Potential Cooling Demand compared to the Current and HR 2050 Heat Demand for each of the STRATEGO countries. As described in Background Report 1, it is assumed here that the future cooling demand will evolve as forecasted in the most recent projections by the European Commission for the year 2050 [29]. After forecasting this cooling demand, it is then adjusted according to the changes in heat savings presented in Background Report 3. However, these are relatively small changes, since the focus here is heat savings, so the changes in cooling demand as a result of the heat savings are relatively low due to a specific focus on the heating demand. As a result, the cooling demand is almost exactly the same in the HR 2050 scenarios as it is today (see Figure 37). Considering the potentials outlined in Figure 35, this is very likely an underestimation of the future cooling demand. 70

90 Cooling Demand for Different Scenarios (TWh/year) Ref 2010 HR 2050* CZ HR IT RO UK Figure 37: Today s cooling demand and the cooling demand in the Heat Roadmap (*HR) scenarios. 6.2 Comparing Individual Cooling and District Cooling Supply Using the Heat Roadmap scenarios developed in section 4, the aim in this section is to analyse the impact of increased energy efficiency in the cooling supply in the future. As already highlighted, the cooling demand is not considered in as much detail as the heating sector, due to the relatively small size of the cooling sector today (Figure 35). For example, savings have not been analysed explicitly for cooling, but instead the cooling demand results from the heat savings. Therefore, the focus here is on the supply side of the cooling sector. Today, almost all cooling in Europe is provided using electricity via individual heat pumps/chillers. The only other mainstream alternative is district cooling, but today these only provide approximately 1% of the cooling demand in Europe [43]. In this analysis, individual electric cooling is compared with district cooling to quantify if district cooling can improve the efficiency of the energy system. District cooling can be designed using a number of different configurations (see Table 16). 71

91 Table 16: Different types of supply, distribution, and end-user products for different district cooling systems [44]. Type of District Cooling 1) Conventional District Cooling (Figure 38) 2) Natural Cooling 3) Hybrid Cooling (Figure 39) 4) Sorption Cooling (SCH) Supply Large-scale heat pumps/chillers Natural cooling, usually from the sea or a river Heat Heat Components in Each Type of District Cooling Design Extra Steps in the Hybrid Units in the Distribution System Building Cold Pipes - - Cold Pipes - - Heat Pipes Heating Pipes Central Absorption Heat Pumps Cold Pipes - - Substations for Cold Substations for Cold Substations for Cold Individual Sorption Heat Pumps In conventional district cooling (Figure 38), the cold is produced in a central plant and delivered to a network of cold pipes, which pass the cold onto the consumer via substations (heat exchangers) that move the cold from the pipes into the building. Natural cooling operates in a similar way, except the cold is obtained from a natural source like a river or the sea rather than from a chiller. User Central Cooling Station User User Cooling Network Figure 38: Conventional district cooling: recreated with permission from AREA [44]. Sorption cooling uses a central heating source and the district heating pipes as the primary producer. The heat is connected to sorption heat pumps: these are driven by the heat to produce cold. In a hybrid system, central sorption heat pumps are used for districts or communities, so there are also district cooling pipes connecting multiple buildings after the sorption chiller (as in Figure 39). However, these sorption heat pumps could potentially be placed at the building level also, so district cooling pipes are not necessary. 72

92 Energy Volume (GWh) SCH* User Central Heating Station SCH* SCH* User User Heating Network Cooling Network Figure 39: Hybrid system that provides cooling using district heating and sorption heat pumps: recreated with permission from AREA [44]. *Sorption Cooling. In practice these different configurations of district cooling can be mixed together on the same district cooling networks, in the same way as different heat supplies can be mixed together on a district heating network. Figure 40 from the RESCUE project [45] provides a typical example of how these different district cooling configurations could work together. The analysis in this study has not considered how all of these district cooling configurations could work together. Since this is the first detailed analysis of district cooling, it is assumed in the analysis here that all of the cooling is provided using conventional district cooling, which is that displayed in Figure 38. Furthermore, the analysis here only considers the services sector for two key reasons: 1) services buildings are usually the most attractive places to start developing district cooling since they are often located very close together in the city and they have relatively high cooling demands and 2) the mapping in Background Report 6, which was carried out to estimate the cost of developing district cooling pipes, only includes the services sector to date. Distribution of Production Free Cooling Absorption Chiller Electrical Chiller Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Month of the Year Figure 40: Example for the mix of different cooling supplies from different district cooling designs (see Table 16) on the same district cooling system: recreated with permission from Swedblom et al. [45]. 73

93 A number of changes are required to simulate a change from electric cooling to conventional district cooling. Firstly, the central chillers need to be constructed, which are assumed here to be the same price as large-scale heat pumps on district heating systems [26]. The coefficient of performance (COP) for these centralised chillers is assumed to be 7, based on the performance of existing units [46], while the capacity is estimated by assuming that the chillers have 1200 hours of operation per year [45]. Next, the district cooling pipe costs must be constructed. The cost for these pipes is obtained from the mapping in Background Report 6, where the cooling density of the services sector is linked to estimated district cooling costs for each of the STRATEGO countries. It is also assumed here that there are 10% losses in the district cooling pipes [43]. No data was obtained for the cold substations/heat exchangers in the buildings, so here it is assumed that they are three times the cost of a district heating substation. They are assumed to be higher since the temperature difference in district heating (~40 C) is usually much larger than in district cooling (~10 C), so the district cooling substations are usually larger which is the reason for the additional costs. These individual substations replace existing individual cooling units. Existing cooling units on services buildings are assumed to be 300 kw air-cooled chillers using the costs reported in the RESCUE project [45], while the COP is assumed to be 3 [46]. When district cooling is installed, the individual cooling unit is replaced with a substation that captures cold from the district cooling pipes, which are supplied using the centralised chillers. The number of individual cooling units in the Heat Roadmap scenarios is based on the total number of services buildings in the country, multiplied by the saturation rate for cooling in the services sector for that country (from Background Report 4). Therefore, as discussed in the heating methodology earlier, it is assumed that each building with cooling has one cooling unit. It is currently unclear how much district cooling is feasible in each of the STRATEGO countries. Although the mapping in Background Report 6 has initiated the process of defining a suitable district cooling level, it is difficult to make any concrete conclusions based on these results since it is unknown if the cooling densities utilised in the mapping correlate to the development of district cooling. This is an area for further investigation in the future. Therefore, in this analysis rather than identifying an optimal level of district cooling, a more simple assumption is applied to analyse the effect of district cooling. In the scenarios here, it is assumed that 35% of the existing cooling demand in the services sector is converted to district cooling, to quantify the impact of adding district cooling to the system. The 35% is based on a typical share that currently occurs in cities with district cooling [46], but again this is not an optimum level, it is a rough approximation to establish if the implementation of district cooling has a major influence on the energy system. 74

94 Cooling Demand (TWh/year) 7 Results and Discussion for the Cooling Sector Electric cooling is converted to district cooling here in the final Heat Roadmaps developed in section 4. Although 35% of the services cooling demand is converted for each STRATEGO country, the total share of cooling varies significantly since the breakdown of the cooling demand between the residential and services sectors varies significantly across the countries. As displayed in Figure 41 and Figure 42, the services cooling demand in Croatia and Italy is relatively small compared to the residential sector, while the Czech Republic has an even split between both, and the services cooling demand is larger than the residential demand in Romania and the United Kingdom. This means that overall share of district cooling is higher in Romania and the United Kingdom than in the other countries. Although this is important for the cooling sector, from an energy system perspective, the volume of the services cooling is likely to be more significant. 2.5 HR-CZ HR-HR HR-RO Residential Services Total Individual Cooling District Cooling Cooling Demand by Sector Cooling Demand Cooling Demand by Supply Figure 41: Cooling demand by sector and by supply after district cooling is added to the Heat Roadmaps (HR) for the Czech Republic (CZ), Croatia (HR), and Romania (RO). Combining the results from Figure 41 and Figure 42 with those presented earlier in Figure 36, suggests that the changes in Italy are likely to have the most significant impact from an energy system perspective, where the total cooling demand for services is ~13% of the HR-IT 2050 heat demand. The cooling demand for services in the other four STRATEGO countries is very small (<3% of the heat demand) in the HR scenarios, so changes to the cooling demand are unlikely to affect the overall energy system significantly. 75

95 Cooling Demand (TWh/year) HR-IT HR-UK Figure 42: Cooling demand by sector and by supply after district cooling is added to the Heat Roadmaps (HR) for Italy (IT) and the United Kingdom (UK). The final results after converting 35% of the cooling demand to district cooling for each country are presented in Table 17. As expected, due to the small volume of cooling required in comparison to the energy demand for the rest of the energy system, the impact on the overall energy system is relatively small. As expected, Italy has the largest impacts, but these are still very small, with a 0.5% reduction in energy demand and a 1% reduction in carbon dioxide emissions. However, although the scale is relatively small, the trend in all countries is a reduction in the impact on all three key metrics, which are energy, environment, and economy. This suggests that district cooling does have a positive impact, although it is difficult to be certain in this initial assessment. Table 17: Impact on the heating, cooling and electricity sectors after installing 35% district cooling in the services sector in each of the Heat Roadmaps for the STRATEGO countries. Heating, Cooling and Electricity Sectors Only Heat Roadmap: 35% vs. 0% DC for Services Residential Services Total Individual Cooling District Cooling Cooling Demand by Sector Cooling Demand Cooling Demand by Supply Energy Environment Economy Change in Primary Energy Supply Change in Carbon Dioxide Unit TWh/year % Mt % Change in Energy System Costs (excludes vehicle costs) Billion % /year Czech Republic % % % Croatia % % % Italy % % % Romania % % % United Kingdom % % % 76

96 Cooling Demand (TWh/year) It is also important to emphasise, that although the impact has been small from an energy system perspective, the impact has been relatively large for the cooling sector itself. For example, the annual cost of cooling sector for the five STRATEGO countries is presented in Figure 43 and Figure 44. Here it is evident that district cooling has reduced the costs of the cooling sector by approximately 15% for all countries, ranging from 9-21% to be exact. This suggest that district cooling could be very beneficial to the local area, even though it currently will not have a major influence on the rest of the energy system. Its role in the overall energy system will be very dependent on how the cooling demand develops in the coming years, since if the cooling demand expands towards its full potential (as presented in Figure 35), then the type of cooling supply that is chosen will likely have a significant impact on the energy system. 600 Electricity* Individual Chillers Individual Substations Cooling Pipes Centralised Chillers Original 35% Cooling Original 35% Cooling Original 35% Cooling HR-CZ HR-HR HR-RO Figure 43: Annualised Cost of the Key Technologies that are Altered when District Cooling in added to the Heat Roadmap (HR) for the Czech Republic (CZ), Croatia (HR) and Romania (RO). *The value of the electricity consumed is estimated based on an average price of 40/MWh [47]. 77

97 Cooling Demand (TWh/year) Electricity* Individual Chillers Individual Substations Cooling Pipes Centralised Chillers Original 35% Cooling Original 35% Cooling HR-IT Figure 44: Annualised Cost of the Key Technologies that are altered when District Cooling is added to the Heat Roadmap (HR) for Italy (IT) and the United Kingdom (UK). *The value of the electricity consumed is estimated based on an average price of 40/MWh. The potential impact of a large cooling demand in the future is estimated here using Italy as a case study. It is important to emphasise that this is only an estimation of how the cooling sector could influence the overall energy system, rather than a suggestion about how the cooling demand is likely to evolve. For this sensitivity analysis, it is simply assumed that all of the cooling demands are met in Italy, both in the residential and services sector. This increases the demand for cooling from today s 46 TWh/year to 186 TWh/year. The analysis starts with the final Heat Roadmap Italy scenario from section 4, so in the first scenario, it is assumed that all of the new additional cooling demand is met by individual chillers (i.e. individual heat pumps). Afterwards, it is assumed that 100% of the total cooling demand for services is converted to district cooling. The methodology described in section 6 is repeated in the same way with this new share of district cooling, but the investment cost for the district cooling pipes is increased. The cooling density reduces with the expansion of district cooling, so the unit investment cost of the pipes increases since more piping is required per unit of cold demand replaced. In line with the estimates from the mapping in Background Report 5, the investment cost of the district cooling pipes increases from ~55 /kwh when 35% of the services cooling demand was converted to ~ 165/kWh here, where 100% of the cooling demand is converted. The impact of these high future cooling demands for Italy is presented in Figure 45. The results confirm that an increasing cooling demand could have a significant impact on the rest of the energy system. When the new cooling demand is added to the original Heat Roadmap Italy scenario, then the primary energy supply increases by ~10% and the carbon dioxide emissions by almost 20%. As a result, the benefits of district cooling also become more significant: when all of the services sector cooling demand is converted to district cooling, the primary energy supply is reduced back down by 3% and the carbon dioxide emissions by 5%. In other words, additional cooling demand will have a negative effect on the energy system (i.e. more energy and more CO 2), but these initial results suggest that this negative impact can be reduced by using district cooling instead of individual electric chillers. Again, the results here for the 78 HR-UK

98 Primary Energy Supply for the Heating, Cooling, and Electricity Sectors (TWh/year) Carbon Dioxide Emissions for the Heating, Cooling, and Electricity Sectors (X, Mt/year) cooling sector are much more uncertain than those presented previously in the heat sector, so the trends in the results for the cooling sector are more significant than the exact changes. Similarly, the costs have not been calculated for this hypothetical scenario since there is too much uncertainty at present in the assumptions to model such an extreme change. In conclusion, the future impact of the cooling sector on the rest of the energy system is very dependent on the future development of the cooling sector. Therefore, the choice of cooling supply is not likely to have a major influence on the overall efficiency of the national energy system if cooling demands remain at similar levels to today. However, the choice of cooling supply is likely to have a major impact at a local level, since the results in Figure 43 and Figure 44 indicate that choice of cooling supply can significantly affect the cooling sector itself Individual Cooling Individual Cooling 100% DC Services 25% Cooling (Heat Roadmap) 100% Cooling (Max Potential) Figure 45: Primary energy supply and carbon dioxide emissions in the Heating, Cooling and Electricity sectors in the original Heat Roadmap Italy scenario from section 4, along with two new scenarios with the max potential cooling demand in the future: one scenario supplies the cooling demand with individual chillers in all of the buildings (i.e. residential and services), while the other uses individual cooling in the residential buildings and district cooling in the services buildings. 0 79

99 8 Discussion about the Methodology and Tools in STRATEGO WP2 The analysis carried out in this study represents one potential transition to a high-efficiency heating sector for each of the STRATEGO countries. The starting point for each country is a business-as-usual projection for the year 2050 for each of the countries, based on the most recent modelling carried out by the European Commission [29]. As described in detail in section 3, the efficiency of the heating sector is then improved from both a demand and supply perspective: the demand is reduced using various levels of heat savings while the supply is improved using primarily district heating in the urban areas and individual heat pumps in the rural areas. The results (section 4) indicate that a combination of these measures can reduce the energy consumption, reduce the carbon dioxide emissions, and reduce the cost of energy in each of the STRATEGO countries. Different combinations of these technologies are required in all countries, although the mix varies from country-to-country. A broad range of tools and methodologies have been developed to create and analyse these highefficiency scenarios for each of the STRATEGO countries. This is already reflected in the wide range of Background Reports accompanying this main report, but a brief overview of the tools and methodologies utilised is also provided in Table 18 and Table 19 respectively. Some key features have defined these methodologies which are worth highlighting once again. Firstly, the EnergyPLAN tools used here to quantify the impact of improved efficiency in the heating and cooling sector is a complete energy system model, as discussed in section 2. It thus accounts for synergies across the electricity, heating, cooling, industry, and transport sectors, which are a key consideration when comparing the impact of different measures. Secondly, the methodologies created in this study are repeatable for other Member States in Europe. Data is primarily obtained from common databases that are shared across all EU Member States so the analysis can be repeated in the future. Furthermore, many of the tools developed in this study are freely available on the Heat Roadmap Europe website, such as the EnergyPLAN tool, the EnergyPLAN models, and the maps developed for the five STRATEGO countries ( Therefore, these can be used to develop even more scenarios than those provided in this study. For example, it is possible to download the EnergyPLAN tool and models, change the mix of individual heating, and quantify the impact of this change in terms of energy, economy, and environment. During this study, it became apparent that using a complete energy system approach will lead to different conclusions than comparing technologies individually. 80

100 Table 18: Primary tools utilised to develop the heating strategies in this study. BR refers to Background Report. Tools Name Purpose Output Reports EnergyPLAN To simulate the electricity, heating, cooling, transport sectors on an hourly basis Energy, economic, and environmental impact of different energy scenarios This Report, BR1, BR2 PETA (Pan-European Thermal Atlas) ArcGIS + ArcMap (GIS Mapping) BEAM Meteonorm To create maps with the location and scale of heat demand, cooling demand, excess heat, and renewable heat To simulate how the building stock will evolve over time based on different energy efficiency targets and different changes to the building stock (e.g. demolition, renovations, etc.) Meteorological data necessary for developing hourly renewable energy distributions (e.g. wind, solar, etc.) Technical and economic potential of district heating and district cooling networks. Quantify the heat available for district heating and cooling from thermal power plants, industry, waste incineration, geothermal, and solar thermal heat Heating demand, cooling demand, and investment cost for the building envelope for different levels of heat savings Meteorological data BR5, BR6, BR7, BR9 BR3 BR2 MATSim Agent based modelling to create a distribution for energy consumption in transportation Hourly energy consumption data for transportation in Croatia also applied in other STRATEGO countries BR2 81

101 Table 19: Primary methodologies utilised to develop the heating strategies in this study. BR refers to Background Report. Methodologies Name Purpose Primary Tool(s) Considered Reports Creating National Energy Models Converting energy statistics into a suitable format for the Inputs for EnergyPLAN BR1 Based on Historical Data EnergyPLAN tool Creating National Energy Models Based on Future Projections of the Energy System Creating Hourly Distribution Data Designing the scenarios to quantify the impact of a highefficiency heating and cooling sector Quantifying the impact of increased energy efficiency in the heating and cooling sectors Quantifying the Current Heating Demand in Europe Quantifying the Future Heating Demand in Europe Quantifying the Current and Potential Future Cooling Demand in Europe Mapping the Heat Demand in Europe Mapping the Cooling Demand in Europe Calculating the Excess Heat available to Supply District Heating in Europe Quantifying the renewable energy resources available Mapping the Renewable Energy Resources Converting energy statistics from a future projection of the energy system into a suitable format for the EnergyPLAN tool Creating an hourly profile for electricity, heating, cooling, and transport demands, as well as wind, wave, and solar production. The inputs from all of the Background Reports are combined to design new scenarios in EnergyPLAN for the heating and cooling sectors. For example, what resources are available and how much of each solution can be implemented. Simulating various renewable energy scenarios and quantifying the impact of different measures/technologies. Estimating the existing heat demand in Europe based on historical data Calculating how the heating and cooling demand will evolve in the residential and services building stock Calculating the existing cooling demand in buildings based on historical data and estimating the maximum cooling demand in the future if all buildings are cooled to a comfortable level To identify the technical and economic potential of developing district heating networks To identify the technical and economic potential of developing district cooling networks Locating and quantifying the potential heat available from thermal power plants, industrial excess heat, and existing waste incineration plants in Europe Review of existing studies to identify the renewable energy resources available in each country Locating and quantifying the amount of solar, geothermal, biomass, and heat for large-scale heat pumps available for district heating systems in Europe Outputs from the software used by the European Commission [29], PRIMES, and Inputs for EnergyPLAN Inputs for EnergyPLAN Inputs for EnergyPLAN Outputs from EnergyPLAN Input for the GIS Mapping Output from the BEAM tool and Inputs for the EnergyPLAN tool Input for the GIS Mapping Output from the GIS Mapping and Input for the EnergyPLAN Tool Output from the GIS Mapping and Input for the EnergyPLAN Tool Inputs for the GIS Mapping and EnergyPLAN tool Inputs for the GIS Mapping and EnergyPLAN tool Output from the GIS Mapping and Inputs for the EnergyPLAN tool BR1 BR2 Main Report Main Report BR4 BR3 BR4 BR5 BR5 BR7 BR8 BR9 82

102 Unit Cost of Various Heat Supplies ( /kwh) 8.1 Unit Costs Compared to Energy System Costs In Background Report 3b, the unit cost of heat savings is compared to the unit cost of heat supply. To recap, the results suggest that the level of heat savings for each STRATEGO country could vary from 0-60% if the cheapest cost of heat supply is considered as the cut-off point (see Figure 46). This could lead to the conclusion that in countries like Italy and Romania, very small levels of heat savings are economically feasible. However, after evaluating the economic viability of heat savings from an energy systems perspective in section 4, the cheapest level of heat savings for these technologies is defined as 30% and 50% for these countries respectively. This is most likely because the energy systems analysis considers the mix of heating technologies that are present in each country, and also the synergies that occur across the different sectors in each country. For example, this is also apparent when comparing the cost of different individual heating technologies CZ HR IT RO Unit Cost of Various Heat Supplies % 10% 20% 30% 40% 50% 60% Heat Savings (% of Today's Heat Demand) Figure 46: Comparison between the unit cost of heat supply and the unit cost of heat savings, along with the corresponding level of heat savings for each STRATEGO country. Note: today s heat demand refers to the year 2014 for the Czech Republic, Croatia, Italy, and Romania. The unit cost of heat supply is also provided in Background Report 3b, as displayed in Figure 47 here. These unit costs suggest that in the year 2050, heat pumps are the cheapest, then biomass boilers, and finally electric heating. However, when the same assumptions are applied in the energy system analysis, the results indicate that all three of these technologies have approximately the same costs. The key difference between them is their efficiency, which is discussed in detail in section 4.1. This combined with the previous example about heat savings, are just two examples of the issues that arise if the dynamics across the complete energy system are not accounted for, thus highlighting the importance of modelling the complete energy system, as is the case in EnergyPLAN, rather than comparing technologies as individual pieces. Similarly, this also emphasises the importance of looking at the complete national 83

103 Unit Cost of Heat Production ( /kwh) energy system as well as the local conditions. If a technology is chosen purely from a local perspective without accounting for the impact on the broader energy system, then again some of the system dynamics may be overlooked. This was emphasised during the discussions earlier about the availability of bioenergy if the aim is to decarbonise the entire energy system, and not only the heat sector (see section 5.4) Unit Cost of Various Heat Supplies Oil Boiler Natural Gas Boiler Biomass Boiler Air Source Heat Pump Ground Source Heat Pump Electric Heating District Heating Figure 47: Unit cost for different years and costs for different heat sources. 8.2 Boundary in the Energy Systems Analysis It is essential that future decisions in the energy system are based on a complete energy system approach, which is discussed in detail in section 2.1. However, the figures and tables throughout the results section in this report, in both section 4 and section 7, have typically only included the heating, cooling, and electricity (HCE) sectors (i.e. excluding industry and transport). This was justified for this particular study based on the assumption that 1) industry and transport remain almost exactly the same in each of the scenarios analysed here where the focus is on the heating and cooling sectors, and 2) excluding industry and transport makes it easier to see the impact of different measures in the heating and cooling sectors. Here the impact of choosing this system boundary in the methodology is evaluated and discussed. Figure 48 presents the primary energy supply and carbon dioxide emissions for the HCE (Heating, Cooling, and Electricity), industry, and transport sectors, while Figure 49 presents their corresponding annual energy system costs. These Figures validate the two initial motivations for isolating the heating, cooling, and electricity sectors from the remainder of the energy system in the results. Figure 48 indicates that the energy in the transport and industry sectors account for 40-50% of the total primary energy supply in the BAU 2050 and HR-CZ scenarios, but there is no change in the energy consumed for industry and transport across both of the scenarios. Although there are some minor synergies utilised in the Heat Roadmap scenario, such as the capture of excess heat from industry, the input fuels for industry remain the same since the heat is not new, but it is already available. Hence, the original demand for fuels in transport and 84

104 Primary Energy Supply (TWh/year) Carbon Dioxide Emissions (Mt/year) industry remain the same. This validates the initial assumptions that industry and transport are unlikely to change significantly, and they also represent a high proportion of the total primary energy supply BAU 2050 Czech Republic Heat Roadmap Figure 48: Primary energy supply and carbon dioxide emissions for the Czech Republic subdivided by the Heating, Cooling, and Electricity (HCE) sectors, Industry sector, and the Transport sector. Similarly, the costs in the transport and industry sectors account for ~65% of the total costs in the energy system. However, this includes the vehicle cost which account for ~40% of the total costs, so if these are excluded, then the heating, cooling, and electricity sectors combined account for a larger, but similar, share as transport and industry. Again, the results in Figure 49 justifies the boundary chosen in this study, since even though the industry and transport sectors account for a very large share of the total costs, they remain constant between the BAU 2050 and HR-CZ scenario. These results for the Czech Republic in Figure 48 and Figure 49 are very similar to those observed for all of the STRATEGO countries HCE Renewable Resources HCE Nuclear HCE Gas HCE Oil HCE Coal Industry Biomass Industry Gas Industry Oil Industry Coal Transport Biomass Transport Gas Transport Oil +HCE CO2 +Industry CO2 Transport CO2 85

105 Total Annual Costs (Billion /year) HCE CO2 HCE Fuels HCE O&M HCE Investments Industry CO2 Industry Fuel Transport CO2 Transport Fuel Vehicles O&M Vehicles Investments 0 BAU 2050 Czech Republic Figure 49: Annual energy system costs for the Czech Republic subdivided by the Heating, Cooling, and Electricity (HCE) sectors, Industry sector, and the Transport sector. 8.3 Future Improvements in the Methodology There are a number of key improvements that can be made to the methodologies utilised in this study. Many of these are very detailed and specific to a small part of one specific methodology, so here only the key improvements are discussed. Firstly, one of the most significant areas of further improvements relates to the mix of individual heating solutions. Here, extreme scenarios were compared with one another where all of the heating outside of the district heating areas were provided by oil, biomass, electric heating, or electric heat pumps. However, it is very likely that individual heating will not all be one single technology, but instead a mix of technologies based on some very local considerations. For example, if a rural house is located next to a forest area, then it is likely that this house has cheap and easy access to some biomass for heating. Similarly, if a suburban house on the edge of a district heating network already has natural gas installed, then it may be more economical to continue using the gas heating in these suburban areas between the district heating and rural zones, since there may not be enough space to install geothermal based heat pumps. In general, it is difficult to make decisions for the individual heating mix without making a complete energy system strategy that includes industry and transport also. For example, only then is it possible to quantify the impact of prioritising the biomass resource for the different sectors. Similarly, very little information is currently available on the stock of individual heating units today as well as the number of different buildings types such as single-family, multi-family, and multi-storey. This also applies to the commercial sector where the number and size of heating units is difficult to profile. Here data from the ENTRANZE study [48] and other sources is used to estimate the total number of buildings and it is assumed that each building has one heating unit, see Background Report BR1. However, a more 86 Heat Roadmap

106 detailed profile of the existing residential and services building stock that includes the location of the building, size of the heating unit, annual heat demand, number of dwellings, and heating fuel type would be very beneficial in the future. This type of information would improve the assumptions for the costs of individual heating units in future analysis. A good example from this study is the investment cost of individual heating from heat pumps compared to biomass boilers. Two costs are used for all heating units in this study, one for multi-family buildings in urban areas and one for single-family buildings in rural areas [26,49]. The unit investment cost of heat pumps in multi-family buildings ( 800/kW) is almost five times more expensive than biomass boilers ( 170/kW). These multi-family buildings are assumed to have approximately 40 dwellings. In comparison, the unit cost of heat pumps for single-family buildings is only 1.5 times more expensive for heat pumps ( 1000/kW) than for biomass boilers ( 670/kW). This means that the relative investment cost of heat pumps is much higher than biomass boilers in multi-family urban areas, than it is in rural singlefamily areas. Again, these costs represent an extreme variation from a single-family building to a multifamily building with approximately 40 dwellings. In reality this represents the cost of going from an extreme rural/suburban area where families are living in single-family detached residences, to an extreme urban area where 40 families are living in the same building. However, in reality the city will transition in a much more gradual way from single-family to small multi-family buildings of 2-4 families for example, and then progress towards the large multi-storey, multi-family buildings of 40 dwellings. In future studies, this more gradual change of individual heating solutions will need to be considered, where it may be feasible to use the mapping developed in the current study. For now, it demonstrates the risks of using extreme situations to identify the boundary between different solutions, which will become very important when defining the optimal mix of individual heating technologies. Next, the previous Heat Roadmap Europe studies also include numerous sources of excess and renewable heat for the district heating supply such as power plants, industry, and geothermal. However, this was the first attempt to optimise the mix of these different supplies with one another. For example, industrial excess heat, waste incineration, and geothermal were defined as baseload so their combined output was limited to the baseload district heating demand over the year. However, for many of the other sources the methodology employed here was still experimental rather than optimal. For example, solar thermal was assumed to be 5% of the district heating production and large-scale heat pumps simply replaced 10% of the thermal boiler capacity. In the future, a more systematic methodology should be investigated to identify how the optimal mix of these various heat sources for district heating can be defined. This will most likely build on the hot-spot mapping from Heat Roadmap Europe [3,50], since decisions are very closely linked to the local resources available. Similarly, the connection between the modelling and the mapping could be enhanced even more in future studies. In general, the mapping to date has provided information for the energy modelling such as district heating potentials, district heating costs, and heat supply options. However, in the future information could also flow back from the modelling to the mapping. For example, a least-cost level of district heating has been identified for each of the countries in this study. However, this has not been fed back into the mapping. In the future, the mapping could be updated to display a final scenario representing the district heating systems which exist for this least cost level of district heating rather than displaying all of the potential district heating systems could be implemented. By doing so it will be possible to improve many of the assumptions in the final scenario in the modelling, since the mapping will give a more detailed breakdown of the changes required for the final scenario. For example, the mapping could then 87

107 demonstrate how many of the existing power plants can be converted to CHP plants and how many new CHP plants will be necessary for the final district heating level proposed. The cooling demand and the potential for district cooling will also need further research. In many ways, the evolution of the cooling analysis is similar to that of the heating sector in Heat Roadmap Europe, but the cooling demand is only included in detail for the first time in this study whereas the heat sector has been a central part of Heat Roadmap Europe since the first study in 2012 [2]. For example, in this study the cooling demand today and the maximum potential cooling demand for the future has been quantified in Background Report 4. Similarly, the first attempt to start mapping the cooling density was carried out in Background Report 5. However, due to some remaining uncertainties this mapping has not been connected to the modelling, which is similar to the situation after the first Heat Roadmap Europe study where the mapping was more of a guide than a direct modelling input. In future research, the mapping can be improved by 1) defining a more realistic evolution for the cooling demand, which will be somewhere between the current cooling demand and the maximum cooling demand, 2) creating a more realistic division across cooling densities so that they reflect the probability of constructing a district cooling network, and 3) by adding the residential cooling demand to the maps since currently they only include the commercial sector. Similarly, the modelling of district cooling in EnergyPLAN will also need to be improved in the future. In this study, the district cooling was simulated as a cooling supply from chillers, district cooling pipes, and district cooling substations. However, as described in section 6, absorption heat pumps and natural cooling could also be used for providing cooling to buildings. These features should also be investigated in future heating and cooling assessments. Finally, the heating, and cooling sectors are the key focus in all of the scenarios analysed. Although industry and transport are also in the modelling, they did not change in many of the scenarios since they were not directly affected (see section 8.2). Similarly, although the electricity sector is affected in the scenarios, it is not optimised here since only changes caused by the heating and cooling sectors are accounted for. In the future, these assessments should consider the whole energy system as much as possible. This may not be possible in the immediate future since a lot of knowledge is still required about the future direction of the energy system. However, as a next step, it is recommended that future heating and cooling strategies begin to incorporate more measures and synergies in the industrial sector, since this is more likely to have an effect on the heating and cooling sector than the transport sector. This will enable energy planning for the heating and cooling sector to move closer to the Smart Energy Systems approach discussed in section

108 9 Conclusions and Recommendations The overall aim in STRATEGO WP2 is to develop low-carbon heating and cooling strategies, which are called Heat Roadmaps, and subsequently to quantify the impact of implementing them at a national level for five EU Member States, which are Czech Republic, Croatia, Italy, Romania, and the United Kingdom. This main report for STRATEGO WP2 has fulfilled this aim by combining results from the nine Background Reports together in hourly energy modelling of the national energy systems in each of these five countries. The Background Reports provide detailed information about the current and future energy system in each of these countries including: The structure and scale of the existing and future energy system (Background Report 1) The hourly pattern of demand and supply across heating, cooling, and electricity (Background Report 2) The current heating and cooling demands in the buildings (Background Reports 4 and 5) The future development of the heating and cooling demands in the buildings (Background Reports 3 and 4) The potential to expand district heating and cooling (Background Reports 6 and 7) The potential renewable energy resources available (Background Reports 7, 8, and 9) The analysis is based on the year 2050, which is far enough away to allow the energy efficiency measures proposed here to be implemented. The energy systems and their costs for the year 2050 are based on the most recent projections for each country in the modelling carried out by the European Commission [29]. These 2050 models are recreated here in the hourly energy systems analysis tool, EnergyPLAN, and then they are combined with the results from the Background Reports to quantify the impact of implementing different energy efficiency measures in each of the STRATEGO countries. By using the EnergyPLAN tool, the methodology has accounted for potential synergies that can occur across the electricity, industry, and transport sectors when alternatives are implemented in the heating and cooling sectors. However, the aim in this study is to improve the energy efficiency of the heating and cooling sectors, rather than to optimise these other sectors also. The overall conclusion is that a combination of energy efficiency measures, in the form of heat savings, district heating in the urban areas, and primarily heat pumps, with smaller shares of biomass boilers and solar thermal, in the rural areas, reduces the energy system costs, energy demand, and carbon dioxide emissions in all five STRATEGO countries for the year 2050 compared to a Business-As-Usual projection. In addition to reducing the energy system costs, the energy efficiency measures have also changed the type of costs in the heating and cooling sectors. Many of the energy efficiency measures are related to investments in new technologies or infrastructures, while the impact of the energy efficiency measures is a reduction in energy demand. In total, the five STRATEGO countries require almost 600 billion of investments in heat savings, almost 300 billion in district heating plants, pipes, and substations, as well as approximately 200 billion of investments in individual heat pumps (see Table 14). This will reduce the need for approximately 200 billion of re-investments in existing coal, oil, and natural gas boilers, while the new CHP plants will reduce the need for almost 200 billion of re-investments in condensing power 89

109 plants. Furthermore, these investments in energy efficiency measures will reduce the fuel costs by approximately 50 billion/year, which in a European context is typically imported fossil fuels. The resulting final Heat Roadmap scenarios all have a higher share of investment costs and a lower share of fuel costs. Therefore, it is likely that the final Heat Roadmap scenarios will result in more local jobs and investments in each of the STRATEGO countries. The mix of energy efficiency solutions is different between the five STRATEGO countries (see Table 10), but all of them should be increased compared to their current level. Overall, the heat demand should be reduced by approximately 30-50% compared to today, district heating should supply 40-70% of the heat demand (compared to 0-20% today), and the remaining heat demand in the rural areas should primarily be supplied by electric heat pumps, supplemented by smaller shares of individual solar thermal and biomass boilers. The levels of savings, district heating, and electric heat pumps recommended here for the STRATEGO countries are in line with the previous results for the whole of Europe in the Heat Roadmap Europe studies [2,3,50]. These are mostly broad recommendations that will need to be supported by more specific technology developments, some new and some existing. Most of the technologies required already exist today, but they need to be implemented to a much larger degree. The technologies which need to grow the fastest are, starting from the highest (see Figure 14): Individual heat pumps. Heat from existing waste incineration plants to supply district heating networks. Offshore wind for electricity production. Solar PV for electricity production. CHP plants to supply district heating networks and to produce electricity. Individual solar thermal. Onshore wind. Centralised boilers to supply district heating networks. Large-scale thermal storage to manage the variations in supply and demand on the district heating networks. Heat savings to reduce the heat demand in the buildings. It is very important to note that heat savings is a broad change that will require a very significant development in more specific technologies relating to the building envelope. These are discussed and presented in more detail in Background Reports 3a and 3b, so the very important role and scale of heat savings required should not be underestimated based on its position here. Hydro power to produce electricity. These existing technologies should ideally be supported by the following new technologies, although their development should be seen as beneficial rather than crucial to the transition (see Figure 14): Large-scale solar thermal to supply district heating networks. Centralised geothermal to supply district heating networks. Industrial excess heat to supply district heating networks. Large-scale heat pumps to supply district heating networks. Large-scale electric boilers to supply district heating networks. Concentrated solar power for electricity production. Tidal power for electricity production. 90

110 It is natural that a large number of the new technologies relate to district heating, since this is expanded significantly in all five countries. However, the exact mix of heat supply for the district heating systems has not been optimised here, so in the future some of these resources may become more dominant. Furthermore, these new technologies are not as significant in the final Heat Roadmap scenarios as the contribution from technologies that already exist today. Finally, as existing technologies expand and new technologies are developed, others must be replaced. The main technologies in decline during the implementation of the Heat Roadmaps are: The heat demand in buildings, which is reduced as heat savings are implemented. The heat production outside of district heating areas, which is primarily from gas boilers and oil boilers today. These are primarily replaced by a combination of heat savings (see section 5.1), district heating in the urban areas (see section 5.2), and individual heat pumps in the rural areas (see section 4.1). The heat produced from individual biomass boilers is also reduced in the Heat Roadmap scenarios. Although biomass boilers are utilised in the Heat Roadmaps, the biomass is prioritised for other parts of the energy system such as industry and transport, so overall there is a reduction compared to today (section 4.1). Condensing power plants for electricity production, which are replaced with CHP plants that produce both electricity and heat. The specific mix of these technologies varies between each of the countries due to their differences in scale, resources, and structure. However despite these differences, each of the five countries benefit from an overall increase in the level of heat savings, district heating, individual electric heat pumps, and individual solar thermal. Expanding these technologies in each of the STRATEGO countries reduces their energy demand, carbon dioxide emissions, and energy costs simultaneously, so it is very likely developing these core technologies will also benefit the other EU Member States. Below is a more specific list of 20 key conclusions and recommendations from this study, divided by specific categories relating to the heating and cooling sector. 9.1 Heat Savings 1. Heat savings reduce the energy demand, carbon emissions, and costs in all countries, but eventually they become more expensive than the cost of sustainable heat supply. Heat savings have a very positive impact on the energy system and they should be strongly supported in all five STRATEGO countries. However, once the heat demand has been reduced by approximately 30-50%, then it is likely that further heat savings will exceed the cost of supplying sustainable heat, via technologies such as district heating or electric heat pumps. Therefore, heat savings should be considered in combination with sustainable heat supply in the future. 2. The average heat demand in residential and services buildings combined, including space heating and hot water, should be reduced by approximately 30-50% in total. This equates to a heat density of approximately kwh/m 2, depending on the specific country. The total heat demand reduction required at national level is also translated into a building-level metric in this study, based on the total forecasted floor area for residential and services buildings in the year This indicates that the unit heat demand in individual buildings should be reduced to approximately 91

111 kwh/m 2, depending on the specific country in STRATEGO. This may vary across specific buildings, but it is a useful guide as a national average target for national energy policies. 3. There are synergies between the reduction of the heat demand and improvements in the heat supply such as reducing the thermal capacity required and enabling more heat sources to be utilised on the district heating network. Heat savings will not eliminate the need for heat in buildings entirely, but by removing some of the heat demand, they will improve the supply of heat. For example, if the heat demand in the buildings is reduced then the thermal capacity (i.e. kw th) required to heat the buildings will also be reduced. In the rural areas, this means that the consumer can purchase a smaller heat pump to meet their heating needs and in some cases, the lower heat demand also means that the heat pump can use the existing radiator system to meet the heat demand instead of converting to underfloor heating. Similarly, the thermal capacity on the district heating networks can also be reduced when heat savings are implemented, which will mean that these networks will require smaller supply thermal capacities from technologies such as CHP plants, boilers, and heat pumps, than they would without the savings. Furthermore, by implementing savings in the buildings the peak demand on the district heating network is reduced the most, so the supply on the district heating network has a higher proportion of baseload demand, thus reducing the average cost of supplying heat to the district heating system. Finally, by implementing heat savings in the buildings, the supply temperature of the district heating network can be reduced thus enabling the network to access more heat from renewable resources such as solar and geothermal, as well as more excess heat (more information is available from the 4 th Generation of District Heating homepage: 4. Heat savings should be implemented over a long-term time horizon, in combination with other building renovations. The heat savings in this study are based on the marginal cost of implementing them while carrying out other renovations in the buildings at the same time. For example, this could be repairing a roof or adding an extension to an existing building or similarly, it could be the construction of a new building. However, a very small share of buildings are newly built or renovated each year, typically in the region of 1-2% of the building stock. This means that the heat savings can only be implemented in a small share of the building stock each year, so they will need to be implemented over decades not years. If they are not implemented at the same time as other renovations, then heat savings may not be economically viable since the costs will be higher. Therefore, the implementation of heat savings should begin today so there is sufficient time to implement them at the lowest price. 9.2 Heating in Urban Areas 5. District heating is more efficient and cost effective in urban areas than natural gas networks. District heating systems should be implemented in high heat-density areas (cities) and to a lesser degree in suburban and rural areas, since the cost of installing district heating increases as the heat densities reduces, which typically occurs as the distance increases from the urban centres. Detailed mapping of the heat demand, using a 1 km 2 resolution, is used here to estimate the cost of building the district heating pipes in the urban areas for each of the STRATEGO countries. This is combined with other inputs relating to supply and demand in the EnergyPLAN tool to calculate the total cost of the energy system, including 92

112 the district heating system. In comparison to the natural gas alternative, the district heating solution reduces energy demand, carbon dioxide emissions, and energy costs when it is installed in the urban areas. 6. District heating is technically and economically viable in the North and South of Europe. The heat density is sufficiently high in cities in both the North and South of Europe to develop and/or expand district heating networks. For example, the district heating level identified for Italy is 60% of the heat demand where as for the Czech Republic, which is further North, the district heating level identified is 40% of the heat demand. This demonstrates that the potential for district heating is not directly linked to the general climate or outdoor temperature, as is often assumed to be the case. Instead, the proximity of buildings to one another and the standard of the building envelopes are likely causing the variations in the optimal level of district heating identified in this study. 7. District heating can utilise very large amounts of excess heat and heat from renewable resources, which are wasted today in the energy system. There is currently more heat being wasted form thermal power production in each of the STRATEGO countries than is required to supply all of the district heating demand in the final Heat Roadmap scenarios proposed here. District heating systems can capture this excess heat and use it to replace natural gas for heating the buildings. Furthermore, there are many other excess heat and renewable heat resources available such as excess heat from existing industries and waste incinerators, as well as renewable heat from solar thermal, geothermal, and large-scale heat pumps. When these resources are also included, then the total heat supply available for district heating is approximately double or more of the district heating supply required in each of the STRATEGO countries. This highlights the scale of heat that is available for district heating systems in each of the countries. Furthermore, if district heating pipes are not installed, then these resources cannot be recovered and so they will continue to be wasted in the future. 8. District heating pipes represent a relatively small fraction of the annualised district heating system cost (~5-15%). The initial investment cost in the district heating pipes is relatively large and extremely visible, in the sense that the pipes are built in a public space and their implementation requires a lot of coordination and planning. However, the results here indicate that the pipe costs are a relatively small part of the production cost for district heating, which is most likely due to their relatively low investment compared to their very long lifetime of approximately 40 years. Overall, the pipe costs account for only approximately 5% of the annualised district heating system cost, while the remainder is for the individual substations (i.e. heat exchangers) in the buildings (25%) and the cost of the heat supply (70%). The pipe costs will increase per unit of heat delivered as the heat density is reduced in more suburban areas, but they are unlikely to exceed 15% of the total annualised costs on average. Therefore, although the pipes can represent a large initial cost, over the lifetime of the district heating system, the substation and heat supply costs are more important for the viability of the district heating network. 9. The sunk costs that could occur during the implementation of district heating do affect the results for the Heat Roadmap scenarios, but the scale of their impact is not significant enough to change the overall conclusion. Two types of potential sunk costs have been analysed in this study when the heating in buildings is converted from natural gas to district heating: 1) the sunk costs when the existing power plants are 93

113 replaced with CHP plants and 2) the sunk costs when the existing natural gas grid is decommissioned for individual buildings. The sunk costs are analysed as part of a sensitivity analysis, rather than as part of the main results due to 1) a lack of knowledge about specific power plants in the existing fleet will be affected when different levels of district heating are implemented and 2) a lack of knowledge about how much of the total costs in a power plant and the natural gas grid are sunk costs, compared to for example operation & maintenance costs. The sensitivity analysis carried is extreme and concludes that even if all of the power plants today need to be decommissioned, and even if all of their costs and the existing natural gas grid costs are sunk costs, then the Heat Roadmap scenarios are still cheaper than a business-as-usual scenario. This suggests that in the long-term, the conclusions are not sensitive to assumptions related to the sunk costs for existing power plants or natural gas grids (see Figure 28). Furthermore, the results suggest that maximising the use of existing power plants will avoid more sunk costs than decommissioning the natural gas grid at the building level. Hence, if existing power plants are located near urban areas, then they should be rebuilt as CHP plants rather than building a new CHP plant elsewhere. 9.3 Heating in Rural Areas 10. Individual heat pumps are the most preferable individual heat solution based on a balance across energy demand, emissions, and cost. They should be supplemented by smaller shares of individual solar thermal and biomass boilers. None of the individual heating solutions analysed here were the optimal across all three metrics: energy demand, carbon emissions, and energy costs. The results indicate that biomass boilers, electric heating, and electric heat pumps have similar costs to one another. Biomass boilers had the lowest carbon dioxide emissions (assuming the net carbon emissions from biomass are zero), but the heat pumps had the lowest energy demand. Therefore, the optimal individual heating solution is identified here based on a balance across all three metrics. In brief this could be reduced to the following question: is the reduced carbon dioxide emission from biomass boilers more sustainable than the lower energy demand for electric heat pumps? The key issue during this comparison relates to the sustainability of biomass. If biomass is used in the heating sector, then it is unlikely that there will be a sufficient amount of biomass available to decarbonise other parts of the energy system, especially industry and transport. Therefore, it is concluded here that individual heat pumps is the most sustainable alternative for individual heating in the future and so it should be the primary form of individual heating. However, it should be supplemented by individual solar thermal and furthermore, if buildings have easy and affordable access to biomass, then it is likely that a biomass boiler will be preferable. 11. The optimal mix of individual heating technologies should be analysed in more detail. The comparison of individual heating solutions in this study represents a number of extreme scenarios, since it assumed that only one type of individual heating is installed when each technology is analysed. For example, when analysing heat pumps, it is assumed that all of the individual heating is converted to heat pumps. However, in reality individual heating is likely to be a mix of technologies. For example, if a building is located close to a forest, then it may have relatively cheap and easy access to biomass, thus resulting in a biomass boiler. To account for some mix, 5% of the individual heat demand is from solar thermal and 5% from biomass boilers in the final Heat Roadmap scenarios, with the remainder coming from electric heat pumps. In conclusion, the key recommendation here is that the exact mix of individual heating technologies is an area for further research in the future. 94

114 12. Individual heat pumps may be too expensive in suburban areas, where the heat supply transitions from district heating to an individual heating solution. This should be analysed further at a local level. From a cost perspective, one of the key advantages of district heating is the value of heat capacity when it is shared across multiple buildings (i.e. the /kw of thermal capacity). In other words, the boiler capacity on a district heating system that connects 1000 buildings is much smaller than the boiler capacity would be if each individual building had its own boiler. However, as district heating expands into the lower heat and population density areas, there will be a transition from district heating to an individual heating solution, such as heat pumps. A key factor determining both the boundary where district heating ends, and the heating solution that will replace district heating is the cost of capacity for the new individual solution. If this transition occurs where there are single-family buildings, then heat pumps are most likely the most viable individual heating solution in line with the analysis in this study. However, if the transition from district heating to an individual heating solution occurs in a suburban area with multi-family and multi-storey buildings, then the heat pumps may be too expensive due to the relatively large cost of capacity for heat pumps in these buildings (see Background Report 3b). In this case, individual biomass boilers or retaining the current natural gas supply may be the most attractive alternative. Once again, the key recommendation here is that more research is required in the future to identify what type of individual heating will be most beneficial at the boundary between district heating and an individual solution. This type of analysis should take as the district heating network expands towards the low heat density areas and it should be carried out at a local level, where it is possible to get more detailed information about the building stock and the availability of resources within these boundary areas. 9.4 Cooling 13. The current cooling demand is relatively low compared to the heat demand, but in the future the cooling demand could be relatively larger. At present, the cooling demand is less than 15% of the heating demand in all STRATEGO countries, even in relatively warm parts of Europe such as Italy and Croatia. Typically, all of the buildings that need heat are already heated today, whereas buildings often do not use cooling even though they need it to maintain a comfortable indoor temperature. People currently accept the discomfort associated with a lack of cooling more than they accept a lack of heating. After profiling the cooling demand in this study, it became apparent that less than 20% of the cooling demand is actually met today in each of the STRATEGO countries. Therefore, if this is met in the future as people s living standards improve, then the cooling demand could increase substantially. Since the heat demand is provided in almost all buildings in Europe, the focus in the heat sector in the coming decades is not to heat more buildings, instead it is to reduce the demand for heat in buildings. The final Heat Roadmap Europe scenarios suggest that the heat demand could be economically reduced by 30-50%, so if this is achieved in combination with an expansion of the cooling demand, then the cooling demand could represent up to 30-70% of the heat demand. In other words, the heat demand is likely to fall in the future whereas the cooling demand is likely to increase in the future. Therefore, depending on the evolution of the heating and cooling demand in the future, the cooling demand could be relatively larger in the future. A more detailed analysis should be carried out to establish how much the cooling demand is likely to grow in the future, especially in relation to how many buildings in Europe are likely to actually meet their cooling needs. 95

115 14. District cooling can reduce the cost and energy demand in the cooling sector, but at present the benefits occur at a local level. At present, almost all cooling is provided by individual electric chillers in the buildings. In this study, 35% of the cooling demand in the services sector is replaced with district cooling in each of the STRATEGO countries, with the results indicating that it has a positive effect: the energy consumption for cooling is reduced along with the cost of cooling. However, since the cooling demand is relatively small at present, the impact is negligible in comparison to the scale of the national energy system, which means that district cooling is mostly benefiting the local energy system. A sensitivity analysis is carried out here for Italy, where the cooling demand is increased from today s level to a scenario where all of the cooling demand in the buildings is satisfied. In this scenario, implementing district cooling does have an impact on the national energy system, by changing its energy demand and carbon emissions by almost 5%. Once again, this means that the impact of cooling in the future will depend on how it evolves. For now, alternatives for cooling should be analysed at a local/municipal level rather than at national level, and district cooling should be considered as potential alternative to individual electric cooling. 15. The optimal level of district cooling is still unclear. This study includes the first attempt to map the cooling demand in Europe on a 1 km 2 resolution. The map presents the cooling density across Europe, which can be used to identify locations where district cooling is feasible. This follows the same methodology that has been used for district heating in this and previous studies. However, since there are very few existing district cooling networks in place, it is still unclear how the cooling density relates to the feasibility of district cooling. Therefore, the mapping in this study is not used to define the optimum level of district cooling in each STRATEGO country, but instead the mapping is used as a guideline for the costs of constructing the district cooling pipes. In this study, a district cooling penetration of 35% for the services sector is assumed for each country based on existing experiences, but this is used as a guideline to evaluate the potential role of district cooling rather than suggesting that it is optimal. More research is required to identify more precisely where and to what extent district cooling should be implemented and once again, it is important to evaluate district cooling as an alternative for cooling at a local level rather than from a national energy system perspective. 16. The design of the district cooling network should be analysed in more detail. District cooling can exist in a variety of forms such as conventional district cooling (based on cold water pipes), sorption district cooling (based on warm water pipes), and hybrid district cooling (based on cold and warm water pipes). Here it is assumed that all district cooling is conventional district cooling, but depending on the local conditions, other designs may be more suitable at a local level. It is highly recommended that the feasibility of these various district cooling designs is analysed at a local level at the same time as district heating is being considered, since synergies can exist in both the construction and operation of these two networks. 9.5 Sustainable Resources for the Energy System in the Future 17. There is a large amount of excess heat and heat from renewable resources available, but there is likely to be a shortage of renewable electricity and bioenergy in the future. There is a large amount of excess heat available today from thermal power plants, industry, and waste incinerators as well as renewable heat from geothermal, solar thermal, and large-scale heat pumps. These resources can be used for heating the buildings in Europe, instead of mostly natural gas, if a district heating 96

116 network is installed to capture them. Overall, these resources could potentially cover approximately 300% of the district heating supply that is required in the final Heat Roadmap scenarios. However, the renewable electricity resources available in each of the STRATEGO countries can only cover around 50% of the electricity demand in the final scenarios. Similarly, a brief analysis in this study has indicated that there is unlikely to be enough sustainable bioenergy available to decarbonise the entire energy system, especially if biomass is prioritised in the heating and cooling sectors. Therefore, district heating networks should be installed to prevent the waste of existing excess heat resources and to utilise the large potential of renewable heat available. Maximising the use of these excess and renewable heat resources will ensure that renewable electricity and bioenergy can be prioritised for other sectors such as electricity, industry, and transport, where there are fewer decarbonisation alternatives available. 18. Further energy efficiency improvements are necessary in electricity, industry, and transport to decarbonise the energy system. Quantifying the role of energy efficiency in the heating and cooling sectors is the primary focus in this study. Although the resulting impact on the remainder of the energy system has also been considered, alternatives have not been analysed to explicitly improve the energy efficiency or decarbonise the electricity, industry, and transport sectors. Due to the lack of renewable electricity and bioenergy that is likely to be available for these sectors, energy efficiency measures should also be identified and quantified for these sectors. For example, the Smart Energy System concept ( which describes how to maximise the synergies across the entire energy system during the transition to a carbon neutral energy system, could be analysed for different EU Member States in the future [18]. 9.6 Methodologies and Tools for Analysing the Heating and Cooling Sector 19. Alternative technologies in the heating and cooling sector should be analysed from a complete energy systems perspective. The solutions implemented in the heating and cooling sector can often influence other parts of the energy system. For example, if electric heat pumps are implemented then they increase the demand for electricity, while if biomass boilers are implemented then they increase the demand for biomass instead. This means that there is less electricity or biomass available for some other demand in the energy system, such as electricity production for example. However, the impact of prioritising electricity or biomass for heating or electricity can only be determined if both the heating and electricity sectors are part of the analysis. There are numerous other examples of these synergies and conflicts, but the key conclusion is that these alternatives can only be compared with one another by analysing the entire energy system. Otherwise, the impact of these alternatives will not be comparable since the synergies resulting from these changes will not be accounted, which can lead to suboptimal solutions from an energy systems perspective. Similarly, utilising these synergies is extremely important to accommodate intermittent renewable energy in the future, especially in the electricity sector, for example by connecting wind and solar power to thermal and fuel storage ( Therefore, it is crucial that alternatives for all sectors of the national energy system are considered from a complete energy system perspective, and not as isolated pieces of the energy system. 97

117 20. A combination of mapping and modelling is essential to analyse the heating and cooling sectors, but it should also be expanded to other parts of the energy system in the future. The analysis here combines geographical mapping with hourly energy system modelling to design and analyse various alternatives for the heating and cooling sector. The mapping provides detailed information about the local situation, while the modelling quantifies the impact on the broader national energy system. Combining these two methodologies is extremely useful during the analysis since it connects the aggregated data in the national energy modelling to specific locations in the country. The mapping has been essential in the energy modelling when designing both the supply and demand of the district heating and cooling networks, but in the future, there is considerable scope to improve the exiting methodology as well as expand the connection to other parts of the energy system. Some examples of future improvements include: a) The location of excess heat could be compared in a more systematic way to the location of future district heating networks (similar to the hot spots analysis in Heat Roadmap Europe [3,33]). b) The individual heating mix and the type of individual heating on the boundary of the district heating network could be refined by mapping the buildings and the resources available in these locations in more detail. c) The location of existing and future electricity production could be optimised to fit the future needs of the district heating and electricity grids, as well as to reduce the sunk costs during the implementation of the new district heating networks. 21. A variety of different expertise is required to inform, design, and analyse a holistic heating and cooling strategy. Developing the heating and cooling strategies in this study is based upon five different tools and approximately 13 uniquely different methodologies (see Table 18 and Table 19). Designing alternatives for the heating and cooling sector requires many different considerations such as the impact on the surrounding energy system, the role of savings, and the design of heat networks. Detailed knowledge about many of these different alternatives has been combined in the STRATEGO project to create a final Heat Roadmap which considers a wide variety of solutions together. This variety of expertise across various components of the heating and cooling sector in STRATEGO WP2 has resulted in many discussions and considerations, which have revealed new synergies and potential conflicts when designing and analysing the final Heat Roadmap scenarios. Therefore, combining this variety of expertise, from the technology level to the national energy planning level, is very important in the methodology and should also be replicated in future studies relating to other sectors of the energy system. 98

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122 11 Appendix The appendix primarily includes more detailed tables and figures for each STRATEGO country during the transition from the BAU 2050 scenario to the Heat Roadmap scenarios. Many of the modelling assumptions are reported in Background Report 1, so they are not presented here List of Figures in the Report Figure 1: Key tasks and partners in STRATEGO WP Figure 2: Interaction between sectors and technologies in a typical national energy system, with the primary components of the heating sector highlighted with dashed lines Figure 3: Comparison of the unit cost and efficiency for various forms of energy storage [23 26] Figure 4: Interaction between sectors and technologies in a renewable energy system, with the primary components of the heating and cooling sectors highlighted with dashed lines [18] Figure 5: Screenshot of Version 12.1 of the EnergyPLAN tool Figure 6: Procedure undertaken by an EnergyPLAN user during an analysis. *The methodology here for measuring the impact is presented in Figure Figure 7: Key metrics used to measure the impact of the different scenarios in the EnergyPLAN tool Figure 8: Accumulated annualised costs of heat savings compared to the reduction in heat demand from the Efficiency Pathway of Background Report 3a for four STRATEGO countries: CZ, HR, IT, and RO. Today s heat demand in Background Report 3a is the heat demand estimated by Ecofys for the year Figure 9: Pan-European Thermal Atlas for each of the Five STRATEGO Countries ( 24 Figure 10: Investment costs in district heating pipes for various levels of district heating supply in the five STRATEGO countries Figure 11: Heat Roadmap impacts on Energy, Environment and Economy compared to the BAU 2050 scenario relative to the original Heating, Cooling and Electricity Sectors and relative to the total energy system, which also includes the industry and transport sectors (i.e. all sectors) Figure 12: Heating and cooling demand in the Ref 2010, BAU 2050, and Heat Roadmap (HR 2050) scenarios for the Czech Republic, Croatia, and Romania Figure 13: Heating and cooling demand in the Ref 2010, BAU 2050, and Heat Roadmap (HR 2050) scenarios for Italy and the United Kingdom Figure 14: Status of some (not all) key technologies in the electricity and heat sectors in the Heat Roadmap scenarios compared to the Ref 2010 and BAU 2050 scenarios for all five STRATEGO countries combined. *Heat savings is a broad change that will require a very significant development in more specific technologies relating to the building envelope, which is more evident in Figure 26. **New Technologies do not exist in the current energy systems of the STRATEGO countries, so they do not have a growth rate Figure 15: Primary energy demand in the Heating, Cooling and Electricity sectors for different individual heating options in Czech Republic, Croatia and Romania Figure 16: Primary energy demand in the Heating, Cooling and Electricity sectors for different individual heating options in Italy and United Kingdom Figure 17: Biomass potentials for Czech Republic, Croatia and Romania compared to the biomass consumption when 1) biomass demand for biomass boilers only to cover the entire individual heating demand and 2) if biomass is required to replace 50% of the fossil fuels in the BAU2 103

123 scenarios. The biomass potentials from the Mapping in Background Report 9 and from PlanEnergi in Background Report 8 use different methodologies (e.g. no energy crops are included in the mapping), so the potentials estimated are different Figure 18: Biomass potentials for Italy and the United Kingdom compared to the biomass consumption when 1) biomass demand for biomass boilers only to cover the entire individual heating demand and 2) if biomass is required to replace 50% of the fossil fuels in the BAU2 scenarios. The biomass potentials from the Mapping in Background Report 9 and from PlanEnergi in Background Report 8 use different methodologies (e.g. no energy crops are included in the mapping), so the potentials estimated are different Figure 19: Step impacts on the primary energy supply and CO 2-emissions in the Heating, Cooling and Electricity sectors for Italy Figure 20: Primary Energy Supply (PES) and CO 2-emissions for Czech Republic, Croatia and Romania Figure 21: Primary Energy Supply (PES) and CO 2-emissions for Italy and United Kingdom Figure 22: Carbon Dioxide Emissions per capita/year for all the STRATEGO countries Figure 23: Step impacts on the socio-economic costs in the Heating, Cooling and Electricity sectors for Italy split between investments, operation and maintenance, fuels and CO Figure 24: Step impacts on the socio-economic costs in the Heating, Cooling and Electricity sectors for Czech Republic, Croatia and Romania Figure 25: Step impacts on the socio-economic costs in the Heating, Cooling and Electricity sectors for Italy and United Kingdom Figure 26: Total investments for some (not all) key technologies in the heating, cooling, and electricity sectors in the Ref 2010, BAU 2050, and HR 2050 scenarios for all five STRATEGO countries combined Figure 27: Socio-economic cost changes compared to the 2050 BAU when applying 2050, 2030 and 2010 costs for Italy Figure 28: Change in the total annual costs in the Heat Roadmap scenarios for the heating, cooling, and electricity (HCE) sectors when additional sunk costs for power plants and the natural gas grid are added. *The results are expressed as a percentage of the BAU 2050 scenario so they are comparable with the results in Table Figure 29: Change in the total annual costs in the final Heat Roadmap scenarios for the heating, cooling, and electricity (HCE) sectors using different assumptions for the amount of sunk costs related to the natural gas grid and power plants Figure 30: Estimated cost of heating 50,000 typical dwellings using natural gas boilers and district heating. It is assumed that each dwelling has an annual heat demand of 15 MWh, the natural gas and heating unit costs are from the EnergyPLAN Cost Database [26], while the district heating supply price is assumed to be 50/MWh [41] Figure 31: Renewable and excess heat potentials, renewable electricity and biomass potentials as well as the district heating, electricity and fossil fuel demands in the Heat Roadmap scenarios. *Includes excess heat from power plants, industry and waste incineration (Background Report 7) as well as renewable heat form solar thermal (Background Report 8), geothermal (Background Report 9). **Renewable electricity potentials are from Background Report 8 and include wind power, solar PV, concentrated solar, geothermal, wave, tidal, reservoir hydro and river hydro. ***Biomass potentials are also from Background Report 8 and include residual and dedicated energy crops, wood, waste and biogas

124 Figure 32: Excess and renewable heat potentials for each of the STRATEGO countries, in comparison to the district heating supply proposed in each of their corresponding Heat Roadmaps (see Background Reports 7, 8, and 9) Figure 33: Energy system cost sensitivity of changing interest rates, Grid stabilisation, onshore wind power capacity factors and district heating pipe costs for the cost year of Figure 34: Energy system cost sensitivity of changing interest rates, Grid stabilisation, onshore wind power capacity factors and district heating pipe costs for the cost year of Figure 35: Current and future potential cooling demand in the five STRATEGO countries for both residential and services. *The Heat Roadmap heat demands are those after the heat savings are applied, which is usually a reduction of approximately 30-50% in the heat demand (see Table 10) Figure 36: Scale of the Current (2010) and Future (2050) Potential Cooling Demand compared to the Current and HR 2050 Heat Demand for each of the STRATEGO countries Figure 37: Today s cooling demand and the cooling demand in the Heat Roadmap (*HR) scenarios Figure 38: Conventional district cooling: recreated with permission from AREA [44] Figure 39: Hybrid system that provides cooling using district heating and sorption heat pumps: recreated with permission from AREA [44]. *Sorption Cooling Figure 40: Example for the mix of different cooling supplies from different district cooling designs (see Table 16) on the same district cooling system: recreated with permission from Swedblom et al. [45] Figure 41: Cooling demand by sector and by supply after district cooling is added to the Heat Roadmaps (HR) for the Czech Republic (CZ), Croatia (HR), and Romania (RO) Figure 42: Cooling demand by sector and by supply after district cooling is added to the Heat Roadmaps (HR) for Italy (IT) and the United Kingdom (UK) Figure 43: Annualised Cost of the Key Technologies that are Altered when District Cooling in added to the Heat Roadmap (HR) for the Czech Republic (CZ), Croatia (HR) and Romania (RO). *The value of the electricity consumed is estimated based on an average price of 40/MWh [47] Figure 44: Annualised Cost of the Key Technologies that are altered when District Cooling is added to the Heat Roadmap (HR) for Italy (IT) and the United Kingdom (UK). *The value of the electricity consumed is estimated based on an average price of 40/MWh Figure 45: Primary energy supply and carbon dioxide emissions in the Heating, Cooling and Electricity sectors in the original Heat Roadmap Italy scenario from section 4, along with two new scenarios with the max potential cooling demand in the future: one scenario supplies the cooling demand with individual chillers in all of the buildings (i.e. residential and services), while the other uses individual cooling in the residential buildings and district cooling in the services buildings Figure 46: Comparison between the unit cost of heat supply and the unit cost of heat savings, along with the corresponding level of heat savings for each STRATEGO country. Note: today s heat demand refers to the year 2014 for the Czech Republic, Croatia, Italy, and Romania Figure 47: Unit cost for different years and costs for different heat sources Figure 48: Primary energy supply and carbon dioxide emissions for the Czech Republic subdivided by the Heating, Cooling, and Electricity (HCE) sectors, Industry sector, and the Transport sector Figure 49: Annual energy system costs for the Czech Republic subdivided by the Heating, Cooling, and Electricity (HCE) sectors, Industry sector, and the Transport sector

125 Figure 50: Primary Energy Supply and Carbon Dioxide Emissions in the various scenarios for Czech Republic Figure 51: Primary Energy Supply and Carbon Dioxide Emissions in the various scenarios for Croatia Figure 52: Primary Energy Supply and Carbon Dioxide Emissions in the various scenarios for Italy Figure 53: Primary Energy Supply and Carbon Dioxide Emissions in the various scenarios for Romania Figure 54: Primary Energy Supply and Carbon Dioxide Emissions in the various scenarios for United Kingdom Figure 55: Electricity production for the various scenarios in Czech Republic Figure 56: Electricity production for the various scenarios in Croatia Figure 57: Electricity production for the various scenarios in Italy Figure 58: Electricity production for the various scenarios in Romania Figure 59: Electricity production for the various scenarios in the United Kingdom Figure 60: Heat production in the various scenarios for the Czech Republic Figure 61: Heat production in the various scenarios for Croatia Figure 62: Heat production in the various scenarios for Italy Figure 63: Heat production in the various scenarios for Romania Figure 64: Heat production in the various scenarios for the United Kingdom Figure 65: Annual socio-economic costs in the various scenarios for Heating, Cooling, and Electricity for the Czech Republic Figure 66: Annual socio-economic costs in the various scenarios for Heating, Cooling, and Electricity for Croatia Figure 67: Annual socio-economic costs in the various scenarios for Heating, Cooling, and Electricity for Italy Figure 68: Annual socio-economic costs in the various scenarios for Heating, Cooling and Electricity for Romania Figure 69: Annual socio-economic costs in the various scenarios for Heating, Cooling, and Electricity for the United Kingdom Figure 70: Socio-economic cost changes compared to the 2050 BAU when applying 2050, 2030 and 2010 costs for the Czech Republic Figure 71: Socio-economic cost changes compared to the 2050 BAU when applying 2050, 2030 and 2010 costs for Croatia Figure 72: Socio-economic cost changes compared to the 2050 BAU when applying 2050, 2030 and 2010 costs for Italy Figure 73: Socio-economic cost changes compared to the 2050 BAU when applying 2050, 2030 and 2010 costs for Romania Figure 74: Socio-economic cost changes compared to the 2050 BAU when applying 2050, 2030 and 2010 costs for the United Kingdom Figure 75: Status of some key technologies in the electricity and heat sectors in the Heat Roadmap scenarios compared to the Ref 2010 and BAU 2050 scenarios for the Czech Republic. *Heat savings is a broad change that will require a very significant development in more specific technologies relating to the building envelope, which is more evident in Figure 80. **New Technologies do not exist in the current energy systems of the STRATEGO countries, so they do 106

126 not have a growth rate. ***Individual solar thermal is 14 times the Ref 2010 value in the Heat Roadmap scenario. As this is an extreme outlier, it is not displayed on this graph Figure 76: Status of some key technologies in the electricity and heat sectors in the Heat Roadmap scenarios compared to the Ref 2010 and BAU 2050 scenarios for Croatia. *Heat savings is a broad change that will require a very significant development in more specific technologies relating to the building envelope, which is more evident in Figure 81. **New Technologies do not exist in the current energy systems of the STRATEGO countries, so they do not have a growth rate. 132 Figure 77: Status of some key technologies in the electricity and heat sectors in the Heat Roadmap scenarios compared to the Ref 2010 and BAU 2050 scenarios for Italy. *Heat savings is a broad change that will require a very significant development in more specific technologies relating to the building envelope, which is more evident in Figure 82. **New Technologies do not exist in the current energy systems of the STRATEGO countries, so they do not have a growth rate. 134 Figure 78: Status of some key technologies in the electricity and heat sectors in the Heat Roadmap scenarios compared to the Ref 2010 and BAU 2050 scenarios for Romania. *Heat savings is a broad change that will require a very significant development in more specific technologies relating to the building envelope, which is more evident in Figure 83. **New Technologies do not exist in the current energy systems of the STRATEGO countries, so they do not have a growth rate. ***Individual solar thermal is 1700 times the Ref 2010 value and solar PV is 800 times the Ref 2010 value in the Heat Roadmap scenario. As these are extreme outliers, they are not displayed on this graph Figure 79: Status of some key technologies in the electricity and heat sectors in the Heat Roadmap scenarios compared to the Ref 2010 and BAU 2050 scenarios for the United Kingdom. *Heat savings is a broad change that will require a very significant development in more specific technologies relating to the building envelope, which is more evident in Figure 84. **New Technologies do not exist in the current energy systems of the STRATEGO countries, so they do not have a growth rate. ***Solar PV is 120 times the Ref 2010 value in the Heat Roadmap scenario. As this is an extreme outlier, it is not displayed on this graph Figure 80: Total investments for some (not all) key technologies in the heating, cooling, and electricity sectors in the Ref 2010, BAU 2050, and HR 2050 scenarios for the Czech Republic Figure 81: Total investments for some (not all) key technologies in the heating, cooling, and electricity sectors in the Ref 2010, BAU 2050, and HR 2050 scenarios for Croatia Figure 82: Total investments for some (not all) key technologies in the heating, cooling, and electricity sectors in the Ref 2010, BAU 2050, and HR 2050 scenarios for Italy Figure 83: Total investments for some (not all) key technologies in the heating, cooling, and electricity sectors in the Ref 2010, BAU 2050, and HR 2050 scenarios for Romania Figure 84: Total investments for some (not all) key technologies in the heating, cooling, and electricity sectors in the Ref 2010, BAU 2050, and HR 2050 scenarios for the United Kingdom

127 11.2 List of Tables in the Report Table 1: Overview of the steps and technologies analysed in the heating sector Table 2: Efficiencies assumed for power plants, combined heat and power (CHP), and centralised boilers in 2010 and Table 3: Total electricity generating capacities for power plants and centralised combined heat and power (CHP) in the BAU 2050 before and after electricity imports are removed Table 4: Average cost of heat savings for the cheapest level of heat savings in the Czech Republic, Croatia, Italy, and Romania based on the energy modelling results in section 4, which are used to estimate the cost of heat savings in the UK Table 5: Efficiencies assumed for the individual heating units in this study Table 6: Excess heat available from industry and waste incineration, as well as renewable heat potentials for district heating from geothermal and solar thermal energy for each STRATEGO country from Background Reports 7, 8, and Table 7: Mix of baseload heat supply from industrial excess, waste incineration, and geothermal heat assumed for each STRATEGO country compared to the total baseload demand that must be met Table 8: Heat Roadmap impacts on Energy, Environment and Economy compared to the 2050 BAU scenario for the entire energy systems Table 9: Heat Roadmap impacts on Energy, Environment and Economy compared to the 2050 BAU scenario for the Heating, Cooling and Electricity sectors Table 10: Heat savings, district heating shares, individual heating options and renewable and excess district heat supply implemented in the Heat Roadmap scenarios for the STRATEGO countries Table 11: Some key technical data in the heating, cooling, and electricity sectors for the Ref 2010, BAU 2050, and HR 2050 scenarios for all five countries combined Table 12: Changes in socio-economic costs compared to the previous step for the STRATEGO countries when implementing different individual heating options Table 13: Changes in CO 2 emissions compared to the previous step for the STRATEGO countries when implementing different individual heating options Table 14: Total investments for some (not all) key technologies in the heating, cooling, and electricity sectors of the Ref 2010, BAU 2050, and HR 2050 scenarios Table 15: Heat demand in the BAU 2050 and Heat Roadmap scenarios (i.e. before and after heat savings are implemented as total heat demand and kwh/m 2. The UK is not included since it is not included in Background Report 3a Table 16: Different types of supply, distribution, and end-user products for different district cooling systems [44] Table 17: Impact on the heating, cooling and electricity sectors after installing 35% district cooling in the services sector in each of the Heat Roadmaps for the STRATEGO countries Table 18: Primary tools utilised to develop the heating strategies in this study. BR refers to Background Report Table 19: Primary methodologies utilised to develop the heating strategies in this study. BR refers to Background Report Table 20: Primary energy supply in the BAU 2050 and Heat Roadmap scenarios divided by fuel types

128 Table 21: Carbon Dioxide Emissions measured as total emissions and emissions per capita in the BAU and Heat Roadmap scenarios Table 22: Electricity production divided by technologies for the BAU and Heat Roadmap scenarios Table 23: Heat production divided by different sources of district heating and individual heating Table 24: Thermal storage for the STRATEGO countries in the BAU and Heat Roadmap scenarios Table 25: Annual socio-economic costs (including vehicles. transport and industry fuels) for the BAU 2050 and Heat Roadmap scenarios Table 26: Annual socio-economic costs for the Heating, Cooling and Electricity sectors for the BAU 2050 and Heat Roadmap scenarios Table 27: Grid stabilisation requirements in the BAU 2050 and Heat Roadmap scenarios Table 28: Populations in the 2010 and 2050 scenarios for the STRATEGO countries [51,52] Table 29: Key technical data in the heating, cooling, and electricity sectors for the Ref 2010, BAU 2050, and HR 2050 scenarios for the Czech Republic Table 30: Key technical data in the heating, cooling, and electricity sectors for the Ref 2010, BAU 2050, and HR 2050 scenarios for Croatia Table 31: Key technical data in the heating, cooling, and electricity sectors for the Ref 2010, BAU 2050, and HR 2050 scenarios for Italy Table 32: Key technical data in the heating, cooling, and electricity sectors for the Ref 2010, BAU 2050, and HR 2050 scenarios for Romania Table 33: Key technical data in the heating, cooling, and electricity sectors for the Ref 2010, BAU 2050, and HR 2050 scenarios for the United Kingdom Table 34: Total investments for the key technologies in the heating, cooling, and electricity sectors of the Ref 2010, BAU 2050, and HR 2050 scenarios for the Czech Republic Table 35: Total investments for the key technologies in the heating, cooling, and electricity sectors of the Ref 2010, BAU 2050, and HR 2050 scenarios for Croatia Table 36: Total investments for the key technologies in the heating, cooling, and electricity sectors of the Ref 2010, BAU 2050, and HR 2050 scenarios for Italy Table 37: Total investments for the key technologies in the heating, cooling, and electricity sectors of the Ref 2010, BAU 2050, and HR 2050 scenarios for Romania Table 38: Total investments for the key technologies in the heating, cooling, and electricity sectors of the Ref 2010, BAU 2050, and HR 2050 scenarios for the United Kingdom

129 11.3 Primary energy supply and carbon dioxide emissions Table 20: Primary energy supply in the BAU 2050 and Heat Roadmap scenarios divided by fuel types. CZ HR IT RO UK Primary Energy BAU Heat BAU Heat BAU Heat BAU Heat BAU Heat Supply (TWh/year) 2050 Roadmap 2050 Roadmap 2050 Roadmap 2050 Roadmap 2050 Roadmap Fossil fuels Coal Oil Natural Gas Nuclear Renewable sources Biomass (excl. waste) Waste Hydro Wind Solar elec Geothermal elec Solar heat Geothermal heat Wave and tidal Total Table 21: Carbon Dioxide Emissions measured as total emissions and emissions per capita in the BAU and Heat Roadmap scenarios. Country CZ HR IT RO UK Scenario Carbon Dioxide Emissions for the Total Energy System (Mt/year) Unit Carbon Dioxide Emissions (tonne CO2/capita) BAU Heat Roadmap BAU Heat Roadmap BAU Heat Roadmap BAU Heat Roadmap BAU Heat Roadmap

130 Primary Energy Supply for the Heating, Cooling, and Electricity Sectors (TWh/year) Carbon Dioxide Emissions for the Heating, Cooling, and Electricity Sectors (Mt/year) Primary Energy Supply for the Heating, Cooling, and Electricity Sectors (TWh/year) Carbon Dioxide Emissions for the Heating, Cooling, and Electricity Sectors (Mt/year) Czech Republic Electricity Import(+) / Export(-) Wave & Tidal Geothermal Heat Solar Heat Geothermal Electricity Solar Electricity Wind Hydro Waste Biomass (excl. waste) Nuclear Natural Gas Oil Coal CO2 Emissions Figure 50: Primary Energy Supply and Carbon Dioxide Emissions in the various scenarios for Czech Republic. 70 Croatia 12 Electricity Import(+) / Export(-) Wave & Tidal Geothermal Heat Solar Heat Geothermal Electricity Solar Electricity Wind Hydro Waste Biomass (excl. waste) 0 0 Nuclear Natural Gas Oil Coal CO2 Emissions Figure 51: Primary Energy Supply and Carbon Dioxide Emissions in the various scenarios for Croatia. 111

131 Primary Energy Supply for the Heating, Cooling, and Electricity Sectors (TWh/year) Carbon Dioxide Emissions for the Heating, Cooling, and Electricity Sectors (Mt/year) Primary Energy Supply for the Heating, Cooling, and Electricity Sectors (TWh/year) Carbon Dioxide Emissions for the Heating, Cooling, and Electricity Sectors (Mt/year) 1400 Italy 250 Electricity Import(+) / Export(-) Wave & Tidal Geothermal Heat Solar Heat Geothermal Electricity Solar Electricity Wind Hydro Waste Biomass (excl. waste) 0 0 Nuclear Natural Gas Oil Coal CO2 Emissions Figure 52: Primary Energy Supply and Carbon Dioxide Emissions in the various scenarios for Italy Romania Electricity Import(+) / Export(-) Wave & Tidal Geothermal Heat Solar Heat Geothermal Electricity Solar Electricity Wind Hydro Waste Biomass (excl. waste) Nuclear Natural Gas Oil Coal CO2 Emissions Figure 53: Primary Energy Supply and Carbon Dioxide Emissions in the various scenarios for Romania. 112

132 Primary Energy Supply for the Heating, Cooling, and Electricity Sectors (TWh/year) Carbon Dioxide Emissions for the Heating, Cooling, and Electricity Sectors (Mt/year) United Kingdom Electricity Import(+) / Export(-) Wave & Tidal Geothermal Heat Solar Heat Geothermal Electricity Solar Electricity Wind Hydro Waste Biomass (excl. waste) Nuclear Natural Gas Oil Coal CO2 Emissions Figure 54: Primary Energy Supply and Carbon Dioxide Emissions in the various scenarios for United Kingdom. 113

133 11.4 Electricity production Table 22: Electricity production divided by technologies for the BAU and Heat Roadmap scenarios. Electricity Production (TWh/year) BAU 2050 CZ HR IT RO UK Heat Roadmap BAU 2050 Heat Roadmap BAU 2050 Heat Roadmap BAU 2050 Heat Roadmap BAU 2050 Heat Roadmap Total thermal Condensing Power Plants CHP Plants (incl. Waste) Industrial CHP Nuclear Power Plants Renewable Sources Geothermal Onshore Wind Offshore Wind Solar Power Wave and Tidal Hydro with a Dam Run of the River Hydro Total Electricity Production

134 Ref 2010 BAU 2050 Step 1 Savings Step 2 DH Step 3 Individual Heat Step 4 RE Heat Step 5 Large HP Heat Roadmap Electricity Production (TWh/year) Ref 2010 BAU 2050 Step 1 Savings Step 2 DH Step 3 Individual Heat Step 4 RE Heat Step 5 Large HP Heat Roadmap Electricity Production (TWh/year) Czech Republic Net Import(+) / Export(-) Run of the River Hydro Hydro with a Dam Wave and Tidal Solar Offshore Wind Onshore Wind Geothermal Power Plants Nuclear Power Plants Industrial CHP CHP plants (incl. Waste) Condensing power plants Figure 55: Electricity production for the various scenarios in Czech Republic Croatia Net Import(+) / Export(-) Run of the River Hydro Hydro with a Dam Wave and Tidal Solar Offshore Wind Onshore Wind Geothermal Power Plants Nuclear Power Plants Industrial CHP CHP plants (incl. Waste) Condensing power plants Figure 56: Electricity production for the various scenarios in Croatia. 115

135 Ref 2010 BAU 2050 Step 1 Savings Step 2 DH Step 3 Individual Heat Step 4 RE Heat Step 5 Large HP Heat Roadmap Electricity Production (TWh/year) Ref 2010 BAU 2050 Step 1 Savings Step 2 DH Step 3 Individual Heat Step 4 RE Heat Step 5 Large HP Heat Roadmap Electricity Production (TWh/year) Italy Net Import(+) / Export(-) Run of the River Hydro Hydro with a Dam Wave and Tidal Solar Offshore Wind Onshore Wind Geothermal Power Plants Nuclear Power Plants Industrial CHP CHP plants (incl. Waste) Condensing power plants Figure 57: Electricity production for the various scenarios in Italy Romania Net Import(+) / Export(-) Run of the River Hydro Hydro with a Dam Wave and Tidal Solar Offshore Wind Onshore Wind Geothermal Power Plants Nuclear Power Plants Industrial CHP CHP plants (incl. Waste) Condensing power plants Figure 58: Electricity production for the various scenarios in Romania. 116

136 Ref 2010 BAU 2050 Step 1 Savings Step 2 DH Step 3 Individual Heat Step 4 RE Heat Step 5 Large HP Heat Roadmap Electricity Production (TWh/year) United Kingdom Net Import(+) / Export(-) Run of the River Hydro Hydro with a Dam Wave and Tidal Solar Offshore Wind Onshore Wind Geothermal Power Plants Nuclear Power Plants Industrial CHP CHP plants (incl. Waste) Condensing power plants Figure 59: Electricity production for the various scenarios in the United Kingdom. 117

137 Heat Production (TWh/year) 11.5 Heat production Table 23: Heat production divided by different sources of district heating and individual heating. Heat Production (TWh/year) CZ HR IT RO UK BAU 2050 Heat Roadmap BAU 2050 Heat Roadmap BAU 2050 Heat Roadmap BAU 2050 Heat Roadmap BAU 2050 Heat Roadmap District Heating Supply DH - Solar Thermal DH - Geothermal DH - Industrial Excess DH - Industrial CHP DH - Waste DH - CHP Plants DH - Heat Pumps DH - Boilers Individual Heating Coal Boilers Oil Boilers Gas Boilers Biomass Boilers Heat Pumps Electric Heating Solar Thermal Total Heat Production Czech Republic Individual Solar Thermal Individual Electric Heating Individual Heat Pumps Individual Biomass Boilers Individual Gas Boilers Individual Oil Boilers Individual Coal Boilers DH - Centralised Boilers DH - Heat Pumps DH - CHP Plants DH - Waste DH - Industrial CHP DH - Industrial Excess Heat DH - Geothermal DH - Solar Thermal Figure 60: Heat production in the various scenarios for the Czech Republic. 118

138 Heat Production (TWh/year) Heat Production (TWh/year) Croatia Individual Solar Thermal Individual Electric Heating Individual Heat Pumps Individual Biomass Boilers Individual Gas Boilers Individual Oil Boilers Individual Coal Boilers DH - Centralised Boilers DH - Heat Pumps DH - CHP Plants DH - Waste DH - Industrial CHP DH - Industrial Excess Heat DH - Geothermal DH - Solar Thermal Figure 61: Heat production in the various scenarios for Croatia Italy Individual Solar Thermal Individual Electric Heating Individual Heat Pumps Individual Biomass Boilers Individual Gas Boilers Individual Oil Boilers Individual Coal Boilers DH - Centralised Boilers DH - Heat Pumps DH - CHP Plants DH - Waste DH - Industrial CHP DH - Industrial Excess Heat DH - Geothermal DH - Solar Thermal Figure 62: Heat production in the various scenarios for Italy. 119

139 Heat Production (TWh/year) Heat Production (TWh/year) Romania Individual Solar Thermal Individual Electric Heating Individual Heat Pumps Individual Biomass Boilers Individual Gas Boilers Individual Oil Boilers Individual Coal Boilers DH - Centralised Boilers DH - Heat Pumps DH - CHP Plants DH - Waste DH - Industrial CHP DH - Industrial Excess Heat DH - Geothermal DH - Solar Thermal Figure 63: Heat production in the various scenarios for Romania United Kingdom Individual Solar Thermal Individual Electric Heating Individual Heat Pumps Individual Biomass Boilers Individual Gas Boilers Individual Oil Boilers Individual Coal Boilers DH - Centralised Boilers DH - Heat Pumps DH - CHP Plants DH - Waste DH - Industrial CHP DH - Industrial Excess Heat DH - Geothermal DH - Solar Thermal Figure 64: Heat production in the various scenarios for the United Kingdom. 120

140 Table 24: Thermal storage for the STRATEGO countries in the BAU and Heat Roadmap scenarios. CZ HR IT RO UK Large-Scale Thermal BAU Heat BAU Heat BAU Heat BAU Heat BAU Heat Storage (GWh) 2050 Roadmap 2050 Roadmap 2050 Roadmap 2050 Roadmap 2050 Roadmap Daily for CHP Seasonal for Solar Thermal Socio-economic costs Table 25: Annual socio-economic costs (including vehicles. transport and industry fuels) for the BAU 2050 and Heat Roadmap scenarios. Annual Socio- Economic Costs for the Total Energy System (Billion /year) BAU 2050 CZ HR IT RO UK Heat Roadmap BAU 2050 Heat Roadmap BAU 2050 Heat Roadmap BAU 2050 Heat Roadmap BAU 2050 Heat Roadmap Annual Investments Operation & Maintenance Fuel CO Total Table 26: Annual socio-economic costs for the Heating, Cooling and Electricity sectors for the BAU 2050 and Heat Roadmap scenarios. Annual Socio- Economic Costs for the Heating, Cooling, and Electricity Sectors (Billion /year) BAU 2050 CZ HR IT RO UK Heat Roadmap BAU 2050 Heat Roadmap BAU 2050 Heat Roadmap BAU 2050 Heat Roadmap BAU 2050 Heat Roadmap Annual Investments Operation & Maintenance Fuel CO Total

141 Annual Socio-Economic Costs for the Heating, Cooling, and Electricity Sectors (Billion /year) Annual Socio-Economic Costs for the Heating, Cooling, and Electricity Sectors (Billion /year) Czech Republic Annual Investments Operation & Maintenance Fuel Carbon Dioxide Ref 2010 BAU 2050 Step 1 Savings Step 2 DH Step 3 Individual Heat Step 4 RE Heat Step 5 Large HP Heat Roadmap Figure 65: Annual socio-economic costs in the various scenarios for Heating, Cooling, and Electricity for the Czech Republic. Croatia Annual Investments Operation & Maintenance Fuel Carbon Dioxide Ref 2010 BAU 2050 Step 1 Savings Step 2 DH Step 3 Individual Heat Step 4 RE Heat Step 5 Large HP Heat Roadmap Figure 66: Annual socio-economic costs in the various scenarios for Heating, Cooling, and Electricity for Croatia. 122

142 Annual Socio-Economic Costs for the Heating, Cooling, and Electricity Sectors (Billion /year) Annual Socio-Economic Costs for the Heating, Cooling, and Electricity Sectors (Billion /year) Italy Annual Investments Operation & Maintenance Fuel Carbon Dioxide Ref 2010 BAU 2050 Step 1 Savings Step 2 DH Step 3 Individual Heat Step 4 RE Heat Step 5 Large HP Heat Roadmap Figure 67: Annual socio-economic costs in the various scenarios for Heating, Cooling, and Electricity for Italy. Romania Annual Investments Operation & Maintenance Fuel Carbon Dioxide Ref 2010 BAU 2050 Step 1 Savings Step 2 DH Step 3 Individual Heat Step 4 RE Heat Step 5 Large HP Heat Roadmap Figure 68: Annual socio-economic costs in the various scenarios for Heating, Cooling and Electricity for Romania. 123

143 Annual Socio-Economic Costs for the Heating, Cooling, and Electricity Sectors (Billion /year) United Kingdom Annual Investments Operation & Maintenance Fuel Carbon Dioxide Ref 2010 BAU 2050 Step 1 Savings Step 2 DH Step 3 Individual Heat Step 4 RE Heat Step 5 Large HP Heat Roadmap Figure 69: Annual socio-economic costs in the various scenarios for Heating, Cooling, and Electricity for the United Kingdom. 124

144 Change in Total Annual Costs for Heating, Cooling, and Electricity (% of BAU 2050 Costs) Change in Total Annual Costs for Heating, Cooling, and Electricity (% of BAU 2050 Costs) 11.7 Cost Sensitivity Czech Republic 2010 Costs 2030 Costs 2050 Costs 0% -10% -20% -30% -40% -50% -60% -70% BAU 2050 Step 1 Savings Step 2 DH Step 3 Individual Heat Step 4 RE Heat Step 5 Large HP Heat Roadmap Figure 70: Socio-economic cost changes compared to the 2050 BAU when applying 2050, 2030 and 2010 costs for the Czech Republic. 0% Croatia 2010 Costs 2030 Costs 2050 Costs -10% -20% -30% -40% -50% -60% -70% BAU 2050 Step 1 Savings Step 2 DH Step 3 Individual Heat Step 4 RE Heat Step 5 Large HP Heat Roadmap Figure 71: Socio-economic cost changes compared to the 2050 BAU when applying 2050, 2030 and 2010 costs for Croatia. 125

145 Change in Total Annual Costs for Heating, Cooling, and Electricity (% of BAU 2050 Costs) Change in Total Annual Costs for Heating, Cooling, and Electricity (% of BAU 2050 Costs) Italy 2010 Costs 2030 Costs 2050 Costs 0% -10% -20% -30% -40% -50% -60% -70% BAU 2050 Step 1 Savings Step 2 DH Step 3 Individual Heat Step 4 RE Heat Step 5 Large HP Heat Roadmap Figure 72: Socio-economic cost changes compared to the 2050 BAU when applying 2050, 2030 and 2010 costs for Italy. 0% Romania 2010 Costs 2030 Costs 2050 Costs -10% -20% -30% -40% -50% -60% BAU 2050 Step 1 Savings Step 2 DH Step 3 Individual Heat Step 4 RE Heat Step 5 Large HP Heat Roadmap Figure 73: Socio-economic cost changes compared to the 2050 BAU when applying 2050, 2030 and 2010 costs for Romania. 126

146 Change in Total Annual Costs for Heating, Cooling, and Electricity (% of BAU 2050 Costs) United Kingdom 2010 Costs 2030 Costs 2050 Costs 0% -10% -20% -30% -40% -50% -60% -70% BAU 2050 Step 1 Savings Step 2 DH Step 3 Individual Heat Step 4 RE Heat Step 5 Large HP Heat Roadmap Figure 74: Socio-economic cost changes compared to the 2050 BAU when applying 2050, 2030 and 2010 costs for the United Kingdom Grid Stabilisation Requirements Table 27: Grid stabilisation requirements in the BAU 2050 and Heat Roadmap scenarios. Grid Stablisation Requirements CZ HR IT RO UK Minimum Grid Stabilisation Production Share (%) Minimum Power Plant Operation (% of total) Minimum Power Plant Operation (MW) Minimum CHP Operation (% of total) Minimum CHP Operation (MW) BAU 2050 Heat Roadmap BAU 2050 Heat Roadmap BAU 2050 Heat Roadmap BAU 2050 Heat Roadmap BAU 2050 Heat Roadmap 30% 30% 30% 30% 30% 30% 30% 30% 30% 30% 20% 20% 20% 20% 20% 20% 20% 20% 20% 20% % 10% 10% 10% 10% 10% 10% 10% 10% 10% Population forecasts Table 28: Populations in the 2010 and 2050 scenarios for the STRATEGO countries [51,52]. Population CZ HR IT RO UK ,462,088 4,302,847 59,190,143 20,294,683 62,510, ,072,795 3,828,405 67,058,919 17,973,992 77,177, Change (% of 2010) 6% -11% 13% -11% 23% Annual Change (%/year) 0.15% -0.30% 0.32% -0.31% 0.54% 127

147 11.10 Technical Data for the Ref 2010, BAU 2050 and Heat Roadmap Scenarios 128

148 Table 29: Key technical data in the heating, cooling, and electricity sectors for the Ref 2010, BAU 2050, and HR 2050 scenarios for the Czech Republic. Technical Data Czech Republic Sector Demand / Supply / Technology Unit Ref 2010 BAU 2050 Heat Roadmap 2050 Heat Demand for Buildings TWh/year District Heating - Total Production* TWh/year DH - Solar Thermal TWh/year DH - Geothermal TWh/year DH - Industrial Excess TWh/year DH - Waste Incineration TWh/year DH - Combined Heat & Power MW 2,688 3,846 6,963 Heating DH - Heat Pumps MW 0 0 1,337 DH - Electric Boilers MW 0 0 1,337 DH - Boilers MW 10,825 10,825 10,696 DH - Thermal Storage GWh Other Heating - Total Production TWh/year Individual Heat Pumps TWh/year Individual Biomass Boilers TWh/year Individual Solar Thermal TWh/year Cooling Demand for Buildings TWh/year Cooling Individual Cooling - Heat Pumps TWh/year District Cooling - Heat Pumps** MWe Onshore Wind MW Offshore Wind MW Solar Photovoltaic MW 1,959 2,179 2,180 Concentrated Solar MW Electricity Tidal MW Hydro MW 1,056 1,305 1,305 Power Plants MW 7,767 6,572 3,453 Nuclear MW 3,900 8,177 8,177 Total (including CHP) MW 17,585 22,080 22,547 Total for the Heating, Cooling, Primary Energy Supply TWh/year and Electricity Sectors Carbon Dioxide Emissions Mt/year Total for All Sectors Primary Energy Supply TWh/year Carbon Dioxide Emissions Mt/year *Includes losses in the district heating pipes. **There is no district cooling in the Heat Roadmap scenarios. This represents the amount of district cooling that is implemented when 35% of the cooling demand in the services sector is converted to district cooling, which is discussed later in sections 6 and

149 DH - Solar Thermal DH - Geothermal DH - Industrial Excess DH - Heat Pumps DH - Electric Boilers Offshore Wind Concentrated Solar Individual Solar Thermal*** DH - Waste Incineration Individual Heat Pumps DH - Combined Heat & Power Onshore Wind Heat Savings* Hydro Solar Photovoltaic DH - Total Production DH - Boilers DH - Thermal Storage Heat Demand for Buildings Other Heating - Total Prod. Power Plants Individual Biomass Boilers Technical Change (% of Original Value) Czech Republic HR 2050 vs. BAU 2050 HR 2050 vs. Ref % 600% 500% 400% 300% 200% 100% 0% -100% -200% New Technologies** Growing Technologies Status of Some Key Technologies in the Heat Roadmap Compared to the Ref 2010 Scenario Declining Technologies Figure 75: Status of some key technologies in the electricity and heat sectors in the Heat Roadmap scenarios compared to the Ref 2010 and BAU 2050 scenarios for the Czech Republic. *Heat savings is a broad change that will require a very significant development in more specific technologies relating to the building envelope, which is more evident in Figure 80. **New Technologies do not exist in the current energy systems of the STRATEGO countries, so they do not have a growth rate. ***Individual solar thermal is 14 times the Ref 2010 value in the Heat Roadmap scenario. As this is an extreme outlier, it is not displayed on this graph. 130

150 Table 30: Key technical data in the heating, cooling, and electricity sectors for the Ref 2010, BAU 2050, and HR 2050 scenarios for Croatia. Technical Data Croatia Sector Demand / Supply / Technology Unit Ref 2010 BAU 2050 Heat Roadmap 2050 Heat Demand for Buildings TWh/year District Heating - Total Production* TWh/year DH - Solar Thermal TWh/year DH - Geothermal TWh/year DH - Industrial Excess TWh/year DH - Waste Incineration TWh/year DH - Combined Heat & Power MW 675 1,471 2,013 Heating DH - Heat Pumps MW DH - Electric Boilers MW DH - Boilers MW 1,488 1,733 3,091 DH - Thermal Storage GWh Other Heating - Total Production TWh/year Individual Heat Pumps TWh/year Individual Biomass Boilers TWh/year Individual Solar Thermal TWh/year Cooling Demand for Buildings TWh/year Cooling Individual Cooling - Heat Pumps TWh/year District Cooling - Heat Pumps** MWe Onshore Wind MW Offshore Wind MW Solar Photovoltaic MW Concentrated Solar MW Electricity Tidal MW Hydro MW 1,842 2,274 2,274 Power Plants MW 1,454 2,702 1,153 Nuclear MW Total (including CHP) MW 4,060 8,344 7,246 Total for the Heating, Cooling, Primary Energy Supply TWh/year and Electricity Sectors Carbon Dioxide Emissions Mt/year Total for All Sectors Primary Energy Supply TWh/year Carbon Dioxide Emissions Mt/year *Includes losses in the district heating pipes. **There is no district cooling in the Heat Roadmap scenarios. This represents the amount of district cooling that is implemented when 35% of the cooling demand in the services sector is converted to district cooling, which is discussed later in sections 6 and

151 DH - Solar Thermal DH - Geothermal DH - Industrial Excess DH - Waste Incineration DH - Heat Pumps DH - Electric Boilers Individual Heat Pumps Offshore Wind Solar Photovoltaic Concentrated Solar Individual Solar Thermal Onshore Wind DH - Combined Heat & Power DH - Boilers DH - Total Production DH - Thermal Storage Heat Savings* Hydro Power Plants Heat Demand for Buildings Other Heating - Total Prod. Individual Biomass Boilers Technical Change (% of Original Value) Croatia HR 2050 vs. BAU 2050 HR 2050 vs. Ref % 500% 400% 300% 200% 100% 0% -100% -200% New Technologies** Growing Technologies Status of Some Key Technologies in the Heat Roadmap Compared to the Ref 2010 Scenario Declining Technologies Figure 76: Status of some key technologies in the electricity and heat sectors in the Heat Roadmap scenarios compared to the Ref 2010 and BAU 2050 scenarios for Croatia. *Heat savings is a broad change that will require a very significant development in more specific technologies relating to the building envelope, which is more evident in Figure 81. **New Technologies do not exist in the current energy systems of the STRATEGO countries, so they do not have a growth rate. 132

152 Table 31: Key technical data in the heating, cooling, and electricity sectors for the Ref 2010, BAU 2050, and HR 2050 scenarios for Italy. Technical Data Italy Sector Demand / Supply / Technology Unit Ref 2010 BAU 2050 Heat Roadmap 2050 Heat Demand for Buildings TWh/year District Heating - Total Production* TWh/year DH - Solar Thermal TWh/year DH - Geothermal TWh/year DH - Industrial Excess TWh/year DH - Waste Incineration TWh/year DH - Combined Heat & Power MW 17,443 22,587 54,976 Heating DH - Heat Pumps MW 0 0 8,635 DH - Electric Boilers MW 0 0 8,635 DH - Boilers MW 14,102 13,680 69,084 DH - Thermal Storage GWh Other Heating - Total Production TWh/year Individual Heat Pumps TWh/year Individual Biomass Boilers TWh/year Individual Solar Thermal TWh/year Cooling Demand for Buildings TWh/year Cooling Individual Cooling - Heat Pumps TWh/year District Cooling - Heat Pumps** MWe 0 0 1,460 Onshore Wind MW 5,814 29,781 29,031 Offshore Wind MW 0 0 1,900 Solar Photovoltaic MW 3,484 48,694 45,505 Concentrated Solar MW 0 0 3,000 Electricity Tidal MW Hydro MW 13,977 15,385 15,385 Power Plants MW 52,806 53,240 8,366 Nuclear MW Total (including CHP) MW 93, , ,163 Total for the Heating, Cooling, Primary Energy Supply TWh/year 1,142 1, and Electricity Sectors Carbon Dioxide Emissions Mt/year Total for All Sectors Primary Energy Supply TWh/year 2,056 2,158 1,773 Carbon Dioxide Emissions Mt/year *Includes losses in the district heating pipes. **There is no district cooling in the Heat Roadmap scenarios. This represents the amount of district cooling that is implemented when 35% of the cooling demand in the services sector is converted to district cooling, which is discussed later in sections 6 and

153 DH - Solar Thermal DH - Geothermal DH - Industrial Excess DH - Heat Pumps DH - Electric Boilers Individual Heat Pumps Offshore Wind Concentrated Solar Solar Photovoltaic DH - Waste Incineration Onshore Wind DH - Boilers DH - Total Production DH - Thermal Storage Individual Solar Thermal DH - Combined Heat & Power Heat Savings* Hydro Heat Demand for Buildings Other Heating - Total Prod. Individual Biomass Boilers Power Plants Technical Change (% of Original Value) Italy HR 2050 vs. BAU 2050 HR 2050 vs. Ref % 1200% 1000% 800% 600% 400% 200% 0% -200% New Technologies** Growing Technologies Status of Some Key Technologies in the Heat Roadmap Compared to the Ref 2010 Scenario Declining Technologies Figure 77: Status of some key technologies in the electricity and heat sectors in the Heat Roadmap scenarios compared to the Ref 2010 and BAU 2050 scenarios for Italy. *Heat savings is a broad change that will require a very significant development in more specific technologies relating to the building envelope, which is more evident in Figure 82. **New Technologies do not exist in the current energy systems of the STRATEGO countries, so they do not have a growth rate. 134

154 Table 32: Key technical data in the heating, cooling, and electricity sectors for the Ref 2010, BAU 2050, and HR 2050 scenarios for Romania. Technical Data Romania Sector Demand / Supply / Technology Unit Ref 2010 BAU 2050 Heat Roadmap 2050 Heat Demand for Buildings TWh/year District Heating - Total Production* TWh/year DH - Solar Thermal TWh/year DH - Geothermal TWh/year DH - Industrial Excess TWh/year DH - Waste Incineration TWh/year DH - Combined Heat & Power MW 3,079 4,370 8,765 Heating DH - Heat Pumps MW 0 0 1,165 DH - Electric Boilers MW 0 0 1,165 DH - Boilers MW 11,296 14,593 10,212 DH - Thermal Storage GWh Other Heating - Total Production TWh/year Individual Heat Pumps TWh/year Individual Biomass Boilers TWh/year Individual Solar Thermal TWh/year Cooling Demand for Buildings TWh/year Cooling Individual Cooling - Heat Pumps TWh/year District Cooling - Heat Pumps** MWe Onshore Wind MW ,500 Offshore Wind MW Solar Photovoltaic MW 2 3,130 1,500 Concentrated Solar MW Electricity Tidal MW Hydro MW 6,382 7,970 7,970 Power Plants MW 8,138 6,839 2,108 Nuclear MW 1,400 2,264 2,264 Total (including CHP) MW 19,463 24,573 24,107 Total for the Heating, Cooling, Primary Energy Supply TWh/year and Electricity Sectors Carbon Dioxide Emissions Mt/year Total for All Sectors Primary Energy Supply TWh/year Carbon Dioxide Emissions Mt/year *Includes losses in the district heating pipes. **There is no district cooling in the Heat Roadmap scenarios. This represents the amount of district cooling that is implemented when 35% of the cooling demand in the services sector is converted to district cooling, which is discussed later in sections 6 and

155 DH - Solar Thermal DH - Geothermal DH - Industrial Excess DH - Waste Incineration DH - Heat Pumps DH - Electric Boilers Individual Heat Pumps Offshore Wind Concentrated Solar Individual Solar Thermal*** Solar Photovoltaic*** Onshore Wind DH - Combined Heat & Power Heat Savings* Hydro DH - Total Production DH - Thermal Storage DH - Boilers Heat Demand for Buildings Other Heating - Total Prod. Power Plants Individual Biomass Boilers Technical Change (% of Original Value) Romania HR 2050 vs. BAU 2050 HR 2050 vs. Ref % 250% 200% 150% 100% 50% 0% -50% -100% -150% New Technologies** Growing Technologies Status of Some Key Technologies in the Heat Roadmap Compared to the Ref 2010 Scenario Declining Technologies Figure 78: Status of some key technologies in the electricity and heat sectors in the Heat Roadmap scenarios compared to the Ref 2010 and BAU 2050 scenarios for Romania. *Heat savings is a broad change that will require a very significant development in more specific technologies relating to the building envelope, which is more evident in Figure 83. **New Technologies do not exist in the current energy systems of the STRATEGO countries, so they do not have a growth rate. ***Individual solar thermal is 1700 times the Ref 2010 value and solar PV is 800 times the Ref 2010 value in the Heat Roadmap scenario. As these are extreme outliers, they are not displayed on this graph. 136

156 Table 33: Key technical data in the heating, cooling, and electricity sectors for the Ref 2010, BAU 2050, and HR 2050 scenarios for the United Kingdom. Technical Data United Kingdom Sector Demand / Supply / Technology Unit Ref 2010 BAU 2050 Heat Roadmap 2050 Heat Demand for Buildings TWh/year District Heating - Total Production* TWh/year DH - Solar Thermal TWh/year DH - Geothermal TWh/year DH - Industrial Excess TWh/year DH - Waste Incineration TWh/year DH - Combined Heat & Power MW 0 7,155 63,595 Heating DH - Heat Pumps MW 0 0 9,167 DH - Electric Boilers MW 0 0 9,167 DH - Boilers MW 1,962 2,725 74,425 DH - Thermal Storage GWh Other Heating - Total Production TWh/year Individual Heat Pumps TWh/year Individual Biomass Boilers TWh/year Individual Solar Thermal TWh/year Cooling Demand for Buildings TWh/year Cooling Individual Cooling - Heat Pumps TWh/year District Cooling - Heat Pumps** MWe Onshore Wind MW 3,785 15,103 15,000 Offshore Wind MW 1,593 20,612 20,000 Solar Photovoltaic MW 77 9,193 9,193 Concentrated Solar MW Electricity Tidal MW 0 3,536 0 Hydro MW 1,524 1,690 1,690 Power Plants MW 68,060 72,184 7,702 Nuclear MW 10,865 10,030 10,030 Total (including CHP) MW 85, , ,211 Total for the Heating, Cooling, Primary Energy Supply TWh/year 1,424 1, and Electricity Sectors Carbon Dioxide Emissions Mt/year Total for All Sectors Primary Energy Supply TWh/year 2,585 2,352 1,925 Carbon Dioxide Emissions Mt/year *Includes losses in the district heating pipes. **There is no district cooling in the Heat Roadmap scenarios. This represents the amount of district cooling that is implemented when 35% of the cooling demand in the services sector is converted to district cooling, which is discussed later in sections 6 and

157 DH - Solar Thermal DH - Geothermal DH - Industrial Excess DH - Waste Incineration DH - Combined Heat & Power DH - Heat Pumps DH - Electric Boilers Concentrated Solar Solar Photovoltaic*** DH - Boilers DH - Total Production Individual Heat Pumps DH - Thermal Storage Offshore Wind Onshore Wind Individual Solar Thermal Individual Biomass Boilers Heat Savings* Hydro Heat Demand for Buildings Other Heating - Total Prod. Power Plants Technical Change (% of Original Value) United Kingdom HR 2050 vs. BAU 2050 HR 2050 vs. Ref % 3500% 3000% 2500% 2000% 1500% 1000% 500% 0% -500% New Technologies** Growing Technologies Status of Some Key Technologies in the Heat Roadmap Compared to the Ref 2010 Scenario Declining Technologies Figure 79: Status of some key technologies in the electricity and heat sectors in the Heat Roadmap scenarios compared to the Ref 2010 and BAU 2050 scenarios for the United Kingdom. *Heat savings is a broad change that will require a very significant development in more specific technologies relating to the building envelope, which is more evident in Figure 84. **New Technologies do not exist in the current energy systems of the STRATEGO countries, so they do not have a growth rate. ***Solar PV is 120 times the Ref 2010 value in the Heat Roadmap scenario. As this is an extreme outlier, it is not displayed on this graph Investment Costs for the Ref 2010, BAU 2050 and Heat Roadmap Scenarios 138

158 Table 34: Total investments for the key technologies in the heating, cooling, and electricity sectors of the Ref 2010, BAU 2050, and HR 2050 scenarios for the Czech Republic. Total Investment Costs Czech Republic Sector Technology Unit Ref 2010 BAU 2050 Heat Roadmap 2050 Heat savings Million ,092 District Heating Substations Million 2,219 2,229 2,362 District Heating Pipes Million DH - Solar Thermal Million DH - Geothermal Million DH - Industrial Excess Million DH - Waste Incineration Million Heating DH - Combined Heat & Power Million 5,254 7,006 5,501 DH - Heat Pumps Million 0 0 3,877 DH - Fuel & Electric Boilers Million 6,744 1,083 4,913 DH - Thermal Storage Million Individual Heat Pumps Million 3,250 3,481 20,254 Individual Biomass Boilers Million 3,871 4, Individual Solar Thermal Million ,764 Individual Gas Boilers Million 5,909 6,331 0 Individual Coal and Oil Boilers Million 2,074 2,222 0 Individual Cooling - Heat Pumps Million Cooling District Cooling Substations** Million District Cooling Pipes** Million District Cooling - Heat Pumps** Million Onshore Wind Million Offshore Wind Million Electricity Solar PV, CSP, and Tidal Million 2,547 1,962 1,962 Hydro Million 3,485 4,306 4,306 Condensing Power Plants Million 18,784 12,401 8,471 Total Annualised Investments* Billion /year Operation & Maintenance Billion /year Total for the Heating, Cooling, Fuel Billion /year and Electricity Sectors Carbon Billion /year Total Annual Costs Billion /year Total for All Sectors Total Annual Costs Billion /year *Annualised based on a fixed rate repayment over the lifetime of the technology and an interest rate of 3%. **There is no district cooling in the Heat Roadmap scenarios. This represents the amount of district cooling that is implemented when 35% of the cooling demand in the services sector is converted to district cooling, which is discussed later in sections 6 and

159 Heat savings Individual Heat Pumps DH - Heat Pumps Individual Solar Thermal DH - Geothermal Hydro DH - Solar Thermal Condensing Power Plants Onshore Wind DH - Combined Heat & Power DH - Industrial Excess District Heating Substations District Heating Pipes Offshore Wind DH - Thermal Storage Solar PV, CSP, and Tidal DH - Fuel & Electric Boilers Individual Coal and Oil Boilers Individual Biomass Boilers Individual Gas Boilers Total Investment Costs (Billion ) Czech Republic Ref 2010 BAU 2050 Heat Roadmap New & Growing Investments Declining Investments Status of Some Key Technologies in the Heat Roadmap Compared to the Ref 2010 Scenario Figure 80: Total investments for some (not all) key technologies in the heating, cooling, and electricity sectors in the Ref 2010, BAU 2050, and HR 2050 scenarios for the Czech Republic. 140

160 Table 35: Total investments for the key technologies in the heating, cooling, and electricity sectors of the Ref 2010, BAU 2050, and HR 2050 scenarios for Croatia. Total Investment Costs Croatia Sector Technology Unit Ref 2010 BAU 2050 Heat Roadmap 2050 Heat savings Million ,109 District Heating Substations Million District Heating Pipes Million DH - Solar Thermal Million DH - Geothermal Million DH - Industrial Excess Million DH - Waste Incineration Million Heating DH - Combined Heat & Power Million 534 1,162 1,590 DH - Heat Pumps Million 0 0 1,121 DH - Fuel & Electric Boilers Million ,420 DH - Thermal Storage Million Individual Heat Pumps Million 0 0 7,354 Individual Biomass Boilers Million 1,666 1, Individual Solar Thermal Million Individual Gas Boilers Million 2,166 2,411 0 Individual Coal and Oil Boilers Million 2,122 2,362 0 Individual Cooling - Heat Pumps Million Cooling District Cooling Substations** Million District Cooling Pipes** Million District Cooling - Heat Pumps** Million Onshore Wind Million 117 1, Offshore Wind Million ,789 Electricity Solar PV, CSP, and Tidal Million Hydro Million 6,079 7,504 7,504 Condensing Power Plants Million 2,374 4,910 2,435 Total Annualised Investments* Billion /year Operation & Maintenance Billion /year Total for the Heating, Cooling, Fuel Billion /year and Electricity Sectors Carbon Billion /year Total Annual Costs Billion /year Total for All Sectors Total Annual Costs Billion /year *Annualised based on a fixed rate repayment over the lifetime of the technology and an interest rate of 3%. **There is no district cooling in the Heat Roadmap scenarios. This represents the amount of district cooling that is implemented when 35% of the cooling demand in the services sector is converted to district cooling, which is discussed later in sections 6 and

161 Heat savings Individual Heat Pumps Offshore Wind Hydro DH - Heat Pumps DH - Combined Heat & Power DH - Fuel & Electric Boilers Solar PV, CSP, and Tidal District Heating Substations Onshore Wind Individual Solar Thermal DH - Geothermal District Heating Pipes DH - Solar Thermal Condensing Power Plants DH - Industrial Excess DH - Thermal Storage Individual Biomass Boilers Individual Coal and Oil Boilers Individual Gas Boilers Total Investment Costs (Billion ) Croatia Ref 2010 BAU 2050 Heat Roadmap New & Growing Investments Status of Some Key Technologies in the Heat Roadmap Compared to the Ref 2010 Scenario Declining Investments Figure 81: Total investments for some (not all) key technologies in the heating, cooling, and electricity sectors in the Ref 2010, BAU 2050, and HR 2050 scenarios for Croatia. 142

162 Table 36: Total investments for the key technologies in the heating, cooling, and electricity sectors of the Ref 2010, BAU 2050, and HR 2050 scenarios for Italy. Total Investment Costs Italy Sector Technology Unit Ref 2010 BAU 2050 Heat Roadmap 2050 Heat savings Billion District Heating Substations Billion District Heating Pipes Billion DH - Solar Thermal Billion DH - Geothermal Billion DH - Industrial Excess Billion DH - Waste Incineration Billion Heating DH - Combined Heat & Power Billion DH - Heat Pumps Billion DH - Fuel & Electric Boilers Billion DH - Thermal Storage Billion Individual Heat Pumps Billion Individual Biomass Boilers Billion Individual Solar Thermal Billion Individual Gas Boilers Billion Individual Coal and Oil Boilers Billion Individual Cooling - Heat Pumps Billion Cooling District Cooling Substations** Billion District Cooling Pipes** Billion District Cooling - Heat Pumps** Billion Onshore Wind Billion Offshore Wind Billion Electricity Solar PV, CSP, and Tidal Billion Hydro Billion Condensing Power Plants Billion Total Annualised Investments* Billion /year Operation & Maintenance Billion /year Total for the Heating, Cooling, Fuel Billion /year and Electricity Sectors Carbon Billion /year Total Annual Costs Billion /year Total for All Sectors Total Annual Costs Billion /year *Annualised based on a fixed rate repayment over the lifetime of the technology and an interest rate of 3%. **There is no district cooling in the Heat Roadmap scenarios. This represents the amount of district cooling that is implemented when 35% of the cooling demand in the services sector is converted to district cooling, which is discussed later in sections 6 and

163 Heat savings Individual Heat Pumps Solar PV, CSP, and Tidal DH - Combined Heat & Power Onshore Wind DH - Heat Pumps District Heating Substations DH - Fuel & Electric Boilers Hydro District Heating Pipes Offshore Wind Individual Solar Thermal DH - Geothermal DH - Solar Thermal DH - Industrial Excess DH - Thermal Storage Individual Biomass Boilers Individual Coal and Oil Boilers Individual Gas Boilers Condensing Power Plants Total Investment Costs (Billion ) Italy Ref 2010 BAU 2050 Heat Roadmap New & Growing Investments Declining Investments Status of Some Key Technologies in the Heat Roadmap Compared to the Ref 2010 Scenario Figure 82: Total investments for some (not all) key technologies in the heating, cooling, and electricity sectors in the Ref 2010, BAU 2050, and HR 2050 scenarios for Italy. 144

164 Table 37: Total investments for the key technologies in the heating, cooling, and electricity sectors of the Ref 2010, BAU 2050, and HR 2050 scenarios for Romania. Total Investment Costs Romania Sector Technology Unit Ref 2010 BAU 2050 Heat Roadmap 2050 Heat savings Million ,693 District Heating Substations Million 2,637 3,320 3,051 District Heating Pipes Million DH - Solar Thermal Million DH - Geothermal Million DH - Industrial Excess Million DH - Waste Incineration Million Heating DH - Combined Heat & Power Million 4,217 5,639 6,373 DH - Heat Pumps Million 0 0 3,701 DH - Fuel & Electric Boilers Million 5,953 7,691 4,692 DH - Thermal Storage Million Individual Heat Pumps Million ,130 Individual Biomass Boilers Million 22,914 25,511 1,146 Individual Solar Thermal Million 0 1 1,653 Individual Gas Boilers Million 7,732 8,608 0 Individual Coal and Oil Boilers Million 2,994 3,333 0 Individual Cooling - Heat Pumps Million Cooling District Cooling Substations** Million District Cooling Pipes** Million District Cooling - Heat Pumps** Million Onshore Wind Million ,830 Offshore Wind Million Electricity Solar PV, CSP, and Tidal Million 3 2,817 1,350 Hydro Million 21,061 26,300 26,300 Condensing Power Plants Million 16,468 12,265 6,718 Total Annualised Investments* Billion /year Operation & Maintenance Billion /year Total for the Heating, Cooling, Fuel Billion /year and Electricity Sectors Carbon Billion /year Total Annual Costs Billion /year Total for All Sectors Total Annual Costs Billion /year *Annualised based on a fixed rate repayment over the lifetime of the technology and an interest rate of 3%. **There is no district cooling in the Heat Roadmap scenarios. This represents the amount of district cooling that is implemented when 35% of the cooling demand in the services sector is converted to district cooling, which is discussed later in sections 6 and

165 Heat savings Individual Heat Pumps Hydro DH - Heat Pumps DH - Combined Heat & Power Individual Solar Thermal Solar PV, CSP, and Tidal Onshore Wind DH - Geothermal DH - Solar Thermal District Heating Substations DH - Industrial Excess District Heating Pipes DH - Thermal Storage Offshore Wind DH - Fuel & Electric Boilers Individual Coal and Oil Boilers Individual Gas Boilers Condensing Power Plants Individual Biomass Boilers Total Investment Costs (Billion ) Romania Ref 2010 BAU 2050 Heat Roadmap New & Growing Investments Status of Some Key Technologies in the Heat Roadmap Compared to the Ref 2010 Scenario Declining Investments Figure 83: Total investments for some (not all) key technologies in the heating, cooling, and electricity sectors in the Ref 2010, BAU 2050, and HR 2050 scenarios for Romania. 146

166 Table 38: Total investments for the key technologies in the heating, cooling, and electricity sectors of the Ref 2010, BAU 2050, and HR 2050 scenarios for the United Kingdom. Total Investment Costs United Kingdom Sector Technology Unit Ref 2010 BAU 2050 Heat Roadmap 2050 Heat savings Billion District Heating Substations Billion District Heating Pipes Billion DH - Solar Thermal Billion DH - Geothermal Billion DH - Industrial Excess Billion DH - Waste Incineration Billion Heating DH - Combined Heat & Power Billion DH - Heat Pumps Billion DH - Fuel & Electric Boilers Billion DH - Thermal Storage Billion Individual Heat Pumps Billion Individual Biomass Boilers Billion Individual Solar Thermal Billion Individual Gas Boilers Billion Individual Coal and Oil Boilers Billion Individual Cooling - Heat Pumps Billion Cooling District Cooling Substations** Billion District Cooling Pipes** Billion District Cooling - Heat Pumps** Billion Onshore Wind Billion Offshore Wind Billion Electricity Solar PV, CSP, and Tidal Billion Hydro Billion Condensing Power Plants Billion Total Annualised Investments* Billion /year Operation & Maintenance Billion /year Total for the Heating, Cooling, Fuel Billion /year and Electricity Sectors Carbon Billion /year Total Annual Costs Billion /year Total for All Sectors Total Annual Costs Billion /year *Annualised based on a fixed rate repayment over the lifetime of the technology and an interest rate of 3%. **There is no district cooling in the Heat Roadmap scenarios. This represents the amount of district cooling that is implemented when 35% of the cooling demand in the services sector is converted to district cooling, which is discussed later in sections 6 and

167 Heat savings Individual Heat Pumps DH - Combined Heat & Power Offshore Wind DH - Fuel & Electric Boilers District Heating Substations DH - Heat Pumps Onshore Wind Solar PV, CSP, and Tidal District Heating Pipes DH - Solar Thermal Individual Solar Thermal DH - Geothermal DH - Industrial Excess Individual Biomass Boilers DH - Thermal Storage Hydro Individual Coal and Oil Boilers Individual Gas Boilers Condensing Power Plants Total Investment Costs (Billion ) United Kingdom Ref 2010 BAU 2050 Heat Roadmap New & Growing Investments Status of Some Key Technologies in the Heat Roadmap Compared to the Ref 2010 Scenario Declining Investments Figure 84: Total investments for some (not all) key technologies in the heating, cooling, and electricity sectors in the Ref 2010, BAU 2050, and HR 2050 scenarios for the United Kingdom. 148

168 11.12 Energy Balances from the EnergyPLAN Tool for the Heat Roadmap Scenarios Business-As-Usual Czech Republic

169 150

170 Heat Roadmap Czech Republic

171 152

172 Business-As-Usual Croatia

173 154

174 Heat Roadmap Croatia

175 156

176 Business-As-Usual Italy

177 158

178 Heat Roadmap Italy

179 160

180 Business-As-Usual Romania

181 162

182 Heat Roadmap Romania

183 164

184 Business-As-Usual United Kingdom

185 166

186 Heat Roadmap United Kingdom

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