Energy Insight: Integrating power, transport, and heat
While a shift to lower carbon electricity sources is a main driver for the UK’s impressive progress towards its emission reduction targets in recent years, emissions from heat and transport have broadly stayed flat since 1990 (CCC, 2017). The shift to low carbon sources in heat and transport is considered more difficult and less straight forward since it might involve more disruption and also engagement at the consumer level.
Currently the three energy sectors are rather separated from each other, since they use different energy carriers: natural gas is used for heat, oil is used for transport and electricity for a range of final usages. They also rely on different primary energy sources: gas and oil in the case of heat and transport, respectively, and a range of sources such as gas, nuclear, renewables, and coal in the case of electricity.
Some suggested solutions to decarbonise heat and transport could also lead to electricity, heat and transport becoming more closely linked, which could offer synergies and whole system benefits. The most prominent of such solutions in the debate about future energy systems is the shift to either electricity or hydrogen as energy carrier in heat and transport. The idea of linking power, heat and transport closer together is referred to by different names such as sector coupling, integrating energy systems or whole system thinking.
In the following we discuss how using electricity and hydrogen as energy carrier in heat and transport could bring economic and decarbonisation benefits to the whole energy system.
1 Electricity as energy carrier in heat and transport
1.1 Electrification of heatAs the decarbonisation of power has made substantive progress and further advances are viable and expected, electrifying heat is a possibility to decarbonise it. The most efficient technology to achieve this are heat pumps, which can be built in residential as well as utility scale. In the latter case the heat must be transferred to end-users through a heat network for residential use. Heat pumps can provide three to six units of useful thermal energy for each unit of energy consumed. Less efficient technologies transforming electricity to heat are electric boilers, which could still play a role in contexts, where heat pumps are not a viable option.
The electrification of heat could provide benefits in terms of flexibility to the power system, since heat is much easier and cheaper to store than electricity, which makes Power-To-Heat technologies providers of flexible power demand. These technologies in combination with thermal storage could utilise excess generation from wind and solar, which would otherwise have to be wasted, and also reduce peak heat generation. Several research projects with funding from the European commission and from Innovate UK look into the potential of thermal energy storage to offer flexibility to the electricity system. Evidence gathering by BEIS recommended further research into how thermal storage in combination with electric heating or combined heat and power (CHP) could provide benefits to the power system.
Whereas complete electrification was featured prominently in UK policy debates around 10 years ago, it could lead to a doubling of electricity peak demand and expensive since underutilised infrastructure. The focus of the debate has shifted to a multiple-technology approach and the need for research into how various low carbon heat technologies such as heat pumps, heat networks and hydrogen can be combined to form a more cost efficient system.
1.2 Electrification of transport
Similar to the case of heat pumps in the case of heat, electric Vehicles (EVs) offer the possibility to decarbonise transport by using electricity as fuel which is becoming continuously cleaner. Most major car manufacturers now offer several electric or hybrid models and expect the electric share of their fleet to grow. Bloomberg expects that 54% of all new light duty car sales will be EVs by 2040. The CCC estimates, 60% of new car and van sales in the UK have to be ultra low emission vehicles (ULEVs) such as EVs by 2030 to meet the 5th carbon budget.
Just like the electrification of transport, the electrification could provide benefits to the electricity system in the form of flexible demand and storage. EVs provide flexible demand as they are parked for most of the time and, if connected to the power grid, could be charged e.g. in times of high wind or solar output. They could also act as storage for the power grid, if electricity is fed back to the grid from the vehicle in times of high power demand or to provide balancing services (vehicle-to-grid). BEIS is providing £20m R&D funding for this technology. At the same time a large penetration of EVs will necessitate investment in grid infrastructure, but smart charging could minimize the grid capacity increases needed.
However there is a need to coordinate the activities of many emerging players in the power system to avoid inefficiencies and realise whole system benefits. Examples of coordinated approaches would be standardised EV chargers and smart EV charging. The government sponsored multi-year research project Future Power System Architecture has pointed to the need for “enabling frameworks” as a new way how regulation should evolve in the sector with a whole system perspective, broader stakeholder engagement and quicker adaption amid technological change as chore principles. National Grid estimates that without smart charging EVs would create an additional peak demand of 18GW by 2050, whereas with smart charging and efficiency improvements this could be reduced to 6GW. Environmental think tank Green Alliance points to research suggesting as many as 6 EVs charging located near each other could lead to brownouts without timing of charging.
While electrification of railways has already progressed since the 19th century and is continuing, electrification of trucks seems harder to achieve than that of light duty vehicles due to the short range and long refuelling times of EVs. However electric truck models for urban use are already produced by manufacturers (e.g. Daimler) and in Germany a trial for electric trucks which get their electricity from an overhead line is planned. At the moment electrification of shipping and aviation doesn’t seem viable and efforts to decarbonise these sectors focus more on using biofuels and improving energy effiency.
2 Hydrogen as energy carrier in heat and transportAn alternative to switching to electricity in heat and transport applications is using hydrogen as energy carrier. Hydrogen has been used in industrial as well as residential applications since the 1800s, in fact town gas, which was delivered to UK homes until the 1970s, contained around 50% hydrogen. Hydrogen based technologies for heat and transport don’t produce any CO2 at their final point of use and no or less other exhaust such as NOx than those based on fossil fuels. The main exhaust product of such technologies is simply water. They can thus contribute to improving air quality in urban areas. However currently hydrogen is mostly produced using Steam Methane Reforming (SMR), a process that also produces CO2. To contribute to the overall decarbonisation of the energy system, the production of hydrogen would need to be decarbonised as well. The main methods envisaged to accomplish this are adding Carbon Capture and Storage (CCS) to the SMR process, electrolysis of water using low carbon electricity (Power To Gas), and biomass gasification.
2.1 Hydrogen for heating: Hydrogen boilers and fuel cells
Homes could be heated using hydrogen gas boilers or hydrogen fuel cells producing heat and power (micro CHP). Such fuel cells are highly efficient and also modular: they can be easily scaled up from serving individual homes up to industrial complexes and local communities via heat networks (Dodds, 2015). Furthermore they could reduce investment in peak generation and electricity grids, since they will produce electricity at peak times (winter evenings). Electric heat pumps and micro CHPs could even be complementary rather than competing technologies: the electricity produced by hydrogen micro CHPs could power heat pumps in the same neighbourhood. A coordinated approach of heat pump and hydrogen fuel cells deployment could thus realise whole system benefits (Staffel, 2017, p.79).
The UK Government has allocated funds of £25m for research into hydrogen based heating systems, a conversion of the gas grid to hydrogen, and development of appliances such as boilers and cookers fuelled by hydrogen.
2.2 Hydrogen for transport: Fuel Cell Electric Vehicles (FCEVs)
FCEVs don’t emit any exhaust apart from small amounts of water and can thus contribute to improving air quality in urban areas. They have the advantages of a longer driving range and quicker refuelling compared to EVs. Several car manufacturers like Honda, Toyota and Hyundai have launched mass-produced FCEV models. However the number of refuelling stations is still comparably low and up front costs of FCEVs are high. In the near and mid term future FCEVs could thus start to grow their market share in the buses, heavy duty and other highly utilised vehicle sectors, where their technical advantages over EVs have the strongest impact.
As they produce electricity, FCEVs could also feed electricity into the power grid (vehicle to grid), providing back up or balancing services. Due to their bigger storage capacity, compared to EVs, FCEVs would be able to provide a wider range of such services. For example, a car with a full hydrogen tank could generate enough electricity to supply an average household for around four days.
3 System technologies: District Heating, PtG, Energy Efficiency
Regardless of which technology becomes the dominant one in heat or transport, there are technologies and low regret measures which can provide system benefits in either case such as district heating, power to gas and energy efficiency improvements.
District heating allows for the integration of several, complimentary heat sources and the utilisation of heat which otherwise would have been wasted (such as heat from a power plant). Heat sources for heat networks include CHP plants (run by fuel cells or fossil fuel) and large scale heat pumps. The UK Government has allocated £320m for heat network projects over a 5 year period from 2016-2021.
Power to gas plants could use excess electricity from wind and solar to produce hydrogen by hydrolysis offering seasonal as well as diurnal energy storage. The produced hydrogen could be used in fuel cells or transformed back to electricity. Producing the majority of hydrogen demand by this method and building electricity plants solely for hydrogen production is currently however expected to be too expensive.
Energy efficiency improvements such as better insulation of homes and more efficient heating systems are paramount to make any low carbon heat strategy cost efficient. They account for 47% of emission reductions from buildings in the CCC’s central scenario for reaching the 5th carbon budget. In a 2017 Energy Barometer survey among more than 400 EI members, energy efficiency improvements emerged as the technological measure enabling the greatest emission reductions in heat through to 2030.