Energy Insight: Decarbonisation of heat part 2 - advanced economies

Nations around the world face a huge challenge in decarbonising heating and cooling systems. According to the IEA, heat is the largest energy end-use, responsible for around 50% of global energy consumption. In 2017, just 10% of this heat generation was from renewable sources, mainly bioenergy.

As discussed in the UK-focused part 1 of this Energy Insight, reducing emissions from heating is a complex and difficult task; it involves facilitating large-scale improvements in energy efficiency, switching to new low-carbon generation sources, and rebuilding or retrofitting large numbers of homes and offices.

Part 2 explores the challenges of decarbonising heat in other economically developed countries, and the progress that has been made thus far. Each country or region faces a different set of challenges in decarbonising heat based on a range of factors that include: demographics, building stock, energy security, government policy, economic structure and climate considerations. 

Countries in Europe face broadly similar challenges to the UK when tackling the decarbonisation of heat (see part 1); European efforts to reduce greenhouse gas (GHG) emissions have also been focused primarily on the power sector rather than heat or transport. According to an estimate by the European Commission, heating and cooling in buildings and industry makes up half of the EU’s total energy consumption. Gaining a complete picture of the sector is tricky, as the countries of the EU vary in their size, climate, and the methods by which they report energy consumption. In 2012, about 40% of primary energy in the EU was used for heating and cooling; of this, just 18% was from renewable sources.

Decarbonisation of the heating sector is essential if the EU is to meet its commitments under the terms of the 2015 Paris agreement. EU nations have already agreed to reduce GHG emissions by at least 40% by 2030 (on 1990 levels) and between 80-95% by 2050. Despite a large majority of EU states supporting efforts to aim for a net-zero target, passing new legislation to that effect has been blocked by Hungary, Poland and the Czech Republic.

In the UK, natural gas dominates domestic heating; although gas also plays a prominent role in Europe, the fuels used for heat generation are more diverse. Coal is dominant in countries such as Poland and the Czech Republic. Aside from fossil fuels, biofuels and waste heat make up nearly one third of generation, with a burgeoning solar thermal industry contributing just 0.1%.

Some countries in the EU have extensive heat networks (district heating) supplying heat to homes and businesses. Over half of EU heat networks are in just five countries (Poland, Germany, Sweden, Finland and Denmark) – in general they tend to be more popular in Scandinavian and Baltic countries which have colder climates. 

Heat networks can be more efficient, as well as help to decarbonise by utilising waste heat; however, most of the heat generated for heat networks comes from fossil fuels (67% from coal and natural gas in 2012). Biomass plays a prominent role in Sweden (49%), Austria (41%) and Estonia (35%). Denmark is leading the way in pairing heat networks with solar thermal generation – as of 2017, the country has roughly 300 large-scale solar thermal systems, with a capacity of 1.14 GW_th. 

Hydrogen has been suggested as a means of producing low-carbon heat, as the only waste product produced when it burns is water. While no country uses hydrogen for heating as of 2019, there are a number of pilot projects testing out the safety and feasibility of injecting hydrogen into the natural gas grid, including the GRHYD project in France and HyDeploy in the UK.

 

The Irish population have traditionally burned wood or peat to heat their homes, but as of 2017, residents primarily used oil (49%) and natural gas (26%) for space heating. A smaller number of households (19%) still use solid fuels including peat, wood and coal, with renewables and electricity making up the difference. Biomass boilers, heat pumps and solar thermal generation are growing in popularity, and the industrial and service sectors are making use of combined heat and power (CHP) to improve efficiency.

As part of the Irish Government’s action plan on climate, oil and gas boilers are to be phased out in newer, more energy efficient homes by the mid-2020s, in order to precipitate a switch to electric heat pumps (heat pumps are ineffective in poorly insulated homes). The ‘Better Energy’ scheme was launched by the Sustainable Energy Authority (SEAI) to facilitate home efficiency upgrades. Out of the 2 million homes in Ireland, over 300,000 have been retrofitted with improved insulation in the past decade. There are plans for a further 500,000 homes to reach a Building Energy Rating of B2 by 2030, as well as the installation of heat pumps in 400,000 homes.

Other action plan targets include the delivery of two new heat networks in Dublin and Tallaght, stricter efficiency requirements for all new buildings and a Government support scheme for renewable heat (heat pumps and biomass boilers). Aggressive cuts to emissions in the areas of heat, power and transport can help to mitigate the environmental impacts of sectors such as agriculture, which is harder to decarbonise and plays a significant role in Ireland’s economy. 

China is the most populous country in the world and the largest consumer of energy (ahead of the US and India), using 26.1% of the global total in 2020. The Chinese Government is grappling with the task of ensuring that approximately 1.4 billion people have access to energy, a problem compounded by a burgeoning middle-class, who have greater heating and power demands than ever before. 

The dominant fuel for heating is coal, which makes up over 83% of heat generation and 60% of total energy generation. Analysis by Carbon Brief highlights that Chinese coal plants make up just under half (49%) of the global coal power station fleet, with a potential maximum power output of almost 1000GW (for comparison, average UK power demand is around 30GW). Additionally, the Chinese coal fleet is comparatively young, with an average age of 12 years – unlike older US and Russian coal fleets which are reaching the end of their lives, China’s power stations are set to run for years to come.

China’s energy mix is evolving, with the Government announcing a five-year plan (2017 - 2021) to convert its northern cities to clean heating. The Government’s priority may be to tackle high levels of smog and air pollution in the capital Beijing and the surrounding Hebei province, rather than a desire by the country to decarbonise; regardless, the plan aims to remove coal heaters in 60% of rural homes and all urban centres by 2021. However, the switch-over has been responsible for major natural gas shortages, and Chinese citizens are struggling with the cost of gas, which is more expensive than coal. Plans have had to be placed on hold until more gas can be delivered via pipeline from Russia.

Another potential option touted by state-owned China National Nuclear Corp. (CNNC) is to use nuclear power for heating. A reactor core is placed inside a large tank of water – the water is heated and can be circulated via a series of heat networks. CNNC has been cautious in rolling out the technology due to public concerns over the safety of nuclear power.

The Chinese Government has asserted that there are ‘concrete arrangements’ in place regarding geothermal heating, biomass, solar thermal, gas, electric and waste heat, but there have been few details provided regarding these routes. What is clear is that power generation from renewables, nuclear and hydroelectric power are all set to grow strongly (26% renewables by 2040). Thanks to China’s enormous size geographically, economically and demographically, the Chinese market is already leading global growth in solar thermal power, heat pumps and geothermal energy, and the country has the potential to become a world leader in whichever other low-carbon heating technologies the Government decides to embrace.

Unlike northern European countries, the United Arab Emirates (UAE) primarily requires energy for space cooling, rather than space heating. The country has an arid desert climate, with temperatures regularly reaching above 40°C in the summer months. 

The UAE produces a sizable quantity of fossil fuels, with an output of around 2.4mn barrels of crude oil per day in 2018. However, the nation adopted its first ever Clean Energy Strategy in 2017. Targets include improving building regulations, implementing district cooling projects and retrofitting 30,000 buildings by 2030. There is also a goal of 27% ‘clean energy’ by 2021 and 50% power generation from ‘clean energy’ by 2050. 

With at least 200 hours of sunshine every month of the year, the UAE is well placed to exploit concentrated solar power (CSP). In Dubai, the Mohammed Bin Rashid Al Maktoum Solar Park plans to use CSP to generate and store heat. CSP works by using a number of large mirrors (heliostats) to focus sunlight into a single area where it is converted into heat – this heat is then stored in containers of molten salt for use weeks, or even months, later. CSP is touted as cheaper and more efficient than traditional photovoltaic solar panels, which must be coupled with expensive batteries in order to store energy at night. The project is ambitious, but engineers will face challenges in keeping the solar modules free of dust and preventing the degradation of equipment operating in 40°C heat. 

Similar to the UK, the United States of America (US) relies primarily on natural gas for heat generation. However, the country is geographically much larger and more varied in climate, spanning from hot deserts in California and Arizona to subarctic conditions in Alaska. Energy usage is higher in regions such as the Midwest and New England (which get very cold winters), and conversely a significant amount of energy is needed for cooling homes in the south and west of the continent. 90% of US homes have air conditioning (approximately 400mn units), and the US already uses as much electricity for air conditioning each year as the UK uses in total. The huge popularity and availability of air conditioning allows for the construction of inefficient homes - rather than making use of natural shading and ventilation, these homes are artificially cooled, which wastes a lot of energy.

According to the Centre for Climate and Energy Solutions (C2ES), 29% of US GHG emissions come from providing heat and power for buildings (residential and commercial). The US’s building stock is ageing, with a median age of 37 years for homes in 2012/13. Although new efficiency standards for equipment, appliances and building codes have helped to remedy inefficiencies in the sector, buildings need to be decarbonised further.

A Natural Resources Defense Council study found heat pumps to be the most effective route for decarbonising homes in the state of California. The technology could reduce emissions by 50-70% over natural gas and American homes are generally situated on lots large enough for installation of ground-source heat pumps. Heat pumps are also championed in the US Mid-Century Strategy for Deep Decarbonisation. By using electricity to transfer rather than generate heat, heat pumps are more energy efficient than gas and can provide the same space heating capacity for as little as one-third the cost of conventional equipment. As a bonus, they can also be reversed to provide space cooling when required. Current limitations of heat pumps are similar to the challenges faced by air conditioning technology in general – weight and size constraints, ensuring that refrigerants have low global warming potential, heat exchanger performance and humidification performance. Additionally, the US must continue to decarbonise electricity generation for heat pumps to be fully green, adding more nuclear, hydroelectric, wind and solar power to the grid.

Heat networks were used in the US as early as the late 1800s, but although they are popular heating options for university campuses, low population density means that they are not as popular or widespread as in European countries. 

Although the Trump administration made every effort to roll back climate targets and safeguards, many states, cities and businesses remained committed to decarbonising the US energy system, collaborating in initiatives such as America’s Pledge and the US Climate Alliance. Since coming to power in 2021, President Biden has aimed to repair the US's reputation on climate; already, the nation re-joined the Paris agreement and has pledged to cut emissions by 52% on 2005 levels by 2030.

Iceland is the only country in the world which uses 100% renewable energy for heat and power (though some fossil fuel plants remain connected to the grid for emergencies). 

After gaining independence in 1944, Iceland initially imported almost all of its energy in the form of peat and coal; renewable generation at scale was only developed after foreign investment in the late 1960s. It is worth noting that Iceland has a very small population of around 350,000 (less than the city of Sheffield) and as such, their heating demands are modest compared to most countries. Nevertheless, the government has exploited the unique geographic and geological properties of the island in order to decarbonise the heating sector. Other countries well-placed to exploit geothermal energy include Turkey, the US, China and Indonesia.

Despite some modest progress in decarbonising heating, fewer countries have policies for developing sustainable, low-carbon heating solutions when compared to power or transport. To decarbonise heat, homeowners, businesses and governments each need to embrace new low-carbon heating technologies, given consideration to those best suited for the geography, climate and heating (or cooling) demands of the area.