Element Energy

Element Energy analysis for the National Infrastructure Commission on the cost of decarbonising UK heat – published this week

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Element Energy led a study with partners E4tech for the National Infrastructure Commission (NIC) to examine the costs associated with different pathways to decarbonising heat in the UK. These pathways included electrification (heat pumps, electric storage heating), decarbonisation of gas (hydrogen networks, biomethane) and hybrid gas-electric approaches, supported by the deployment of energy efficiency, heat networks and biomass combustion. The cost analysis considers all levels of the energy system, including the building level consumer costs, the cost to the electricity and gas distribution and transmission networks, the cost of CO2 transport and offshore storage and the generation and raw resource costs.  This study provides a clear and transparent comparison of the likely costs of decarbonising UK heat using different pathways, whilst highlighting the impact of uncertainties and practical barriers to implementation.

The work demonstrates that while the cost of heating is likely to rise in the UK, the costs are manageable and heating is expected to represent a smaller share of GDP in 2050 than today. However, the study indicates that any decarbonisation pathway will require a much-increased level of ambition relative to current policy. While there are low regrets options in the short term, including cost-effective energy efficiency measures and deployment of heat networks in certain areas, the various pathways for heat decarbonisation in the UK diverge clearly from the mid-2020s and important decisions on the future of the UK’s energy and heat infrastructure will need to be taken in advance of that date.

The findings suggest that significant uncertainties remain regarding the cost of the different long-term pathways, and that there is no clear winner at this stage. However, under stated assumptions regarding the development of the required component technologies, it is found that decarbonisation of the gas grid with hydrogen has the potential to be the lowest cost option and should be taken seriously as an alternative to deep electrification.

The project report is available on the NIC website: https://www.nic.org.uk/publications/cost-analysis-of-future-heat-infrastructure/. The work informed the NIC’s National Infrastructure Assessment published in July 2018.

For more information on this study and our work in sustainable heat networks, please contact Sam Foster.

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