Electrification

EAI believes that the increased electrification of energy demand in heating, transport, and large industry can make a significant contribution to meeting Ireland’s decarbonisation objectives in a cost-effective manner.  A recent Eurelectric/McKinsey report concludes that an increase in the direct electrification of energy use in EU economies, from the current approximate rate of 20% to a level in a range of 38-60%, could contribute to an overall decarbonisation in the range of 80-95%[1].

Heating

Domestic heating has a key role to play in achieving decarbonisation.  Heat pumps, for example, are an efficient heating source for new build houses. Heat pumps have an efficiency of more than 300% as they extract significant renewable energy from the external environment.  Then, as electricity continues to decarbonise each year as more renewable generation is connected, the heat pump will emit lower and lower levels of carbon emissions. Once installed as an inherent part of the house they represent a single “whole house” solution for meeting a house’s heating needs.

A further benefit of the electrification of domestic heating is the displacement of fossil fuels and transfer of emissions from the non-ETS sector to the ETS sector.  Every tonne of carbon moved from non-ETS to ETS makes the Government’s challenge in the non ETS less daunting and ultimately cheaper.  If each of the new houses planned by Government is fitted with a heat pump or given access to district heating, there should be no increase to non-ETS emissions even with a substantial increase in the housing stock.  SEAI and DCCAE are promoting grant schemes for deep retrofit and low carbon heating for existing homes.  With an estimated 33% of the homes that will exist in 2050 yet to be built, it is important for this effort that new homes do not add to the greenhouse gas problem.

The EAI/PWC roadmap for the achievement of a cost-effective 92% emission reduction on 1990 levels by 2050,  includes an 80% reduction in emissions from energy used in heating and a 71% average reduction in household energy consumption, achieved through a combination of building new homes (700k new homes by 2050) to a high standard of energy efficiency and refurbishing existing building stock (1.7m homes) to a more efficient level.  Meeting the target in the heat sector is expected to include the addition of electric heating to approx. 1.4mn homes[2].

The Eurelectric/McKinsey roadmap envisages that 45% to 63% of the energy consumption from buildings could be electric in 2050 driven by the adoption of electric heat pumps.  McKinsey expect the economics

of heat pumps to improve with innovation but conclude that the approach to regulation and building standards will be critical to determining the overall penetration at EU level[3].

Building regulations are undoubtedly about making houses as efficient as possible and a significant focus to date has been placed on improving building fabric and increasing energy ratings of new houses. EAI believes that the decarbonisation of the housing stock increasingly needs to be a focus for policy given the level of climate action required by Ireland as a whole.

EAI is concerned that current regulation is not sufficiently ambitious to support Ireland’s decarbonisation objectives and could facilitate the increase and lock-in of a significant level of carbon in the Irish economy.   In the context of the Government’s objective to complete an average of 25,000 new homes per year to 2040, ramping up to between 30 and 35, 000 per annum in the years to 2027, it is imperative that the regulation encourages zero carbon heating over high emission fossil fuels[4].

EAI/PWC Domestic Heat Policy Recommendations

Phase 1 – present to 2025
  1. Bring new home building regulation to zero local emissions level nationally
  2. Provide clear signal on carbon tax out to 2030
  3. Create independent energy agency that provides consumers with impartial and independent energy efficiency advice specific to their home
  4. Introduce holistic domestic retrofit package which takes into account heat source, microgeneration and transport
  5. Introduce innovative retrofitting funding (e.g. KfW development bank in Germany where retrofit and low carbon heating funding is part of the mortgage taken out against the property)
Phase 2 – 2025 - 2030
  1. carbon tax increase on coal, oil, peat
  2. Prohibit future installation of fossil fuel based heating systems
Phase 3
  1. Prohibit burning of fossil fuels in the home beyond date determined by national carbon budget

 

[1] ‘Decarbonisation Pathways ~ European Economy’ (McKinsey/Eurelectric 2018)
[2] https://www.eaireland.com/transitioning-to-a-low-carbon-energy-system/, p.28
[3] https://www.eurelectric.org/news/decarbonisation-pathways-electrification-part/, full report yet to be published
[4] http://npf.ie/, p. 94 for house build projections