Element Energy

Project Case Studies

Built Environment

Cost analysis of future heat infrastructure options, for the National Infrastructure Commission (2018)

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 further information, please contact Sam Foster at sam.foster@element-energy.co.uk.

 

Unlocking the Energy Efficiency Opportunity, for SEAI (2015)

The Unlocking the Energy Efficiency Opportunity report, carried out for the Sustainable Energy Authority of Ireland, was launched in Dublin by the Minister for the Department of Communications, Energy and Natural Resources.

In the report, we set out the findings of a detailed assessment of the size of the energy efficiency opportunity across all energy-consuming sectors in Ireland, the concrete policy mechanisms that could unlock those energy savings most effectively, and the impact of the energy savings on consumers, the Exchequer and the economy as a whole. We find that a range of policies could unlock primary energy savings of over 20% by 2020 with a total investment of just over €3 billion (around 1.4% of GDP), leading to lifetime savings of over €11 billion, and providing a net benefit to the Exchequer of more than €1 billion.

The research has served as an evidence base for Ireland’s implementation of the EU Directives on Energy Efficiency (EED) and Energy Performance in Buildings (EPBD), and will continue to influence the country’s energy and low carbon policy for the period to 2020 and beyond.

The study advanced the state of the art for energy efficiency assessment and policy development, as it:

  • Incorporates a novel description of consumer investment behaviour which is key to developing realistic uptake projections for energy efficiency, based on original surveys of consumers in the domestic and non-domestic sectors;
  • Presents concrete and actionable policy recommendations designed to target different consumer groups and distinct barriers to the uptake of energy efficiency, to unlock energy savings in a cost-effective and predictable way;
  • Builds on the most up-to-date and representative set of stock models of domestic and non-domestic buildings and vehicles in Ireland constructed to date;
  • Quantifies the economic impact of energy efficiency on households, businesses, the Exchequer and the economy as a whole.

The Summary for Policymakers and the Main report can be found here.

Direct link to Summary for Policymakers: https://www.seai.ie/resources/publications/Unlocking-the-Energy-Efficiency-Opportunity-Summary-for-Policymakers.pdf

Direct link to Main report: https://www.seai.ie/resources/publications/Unlocking-the-Energy-Efficiency-Opportunity-Main-Report.pdf

For further information, please contact Sam Foster at sam.foster@element-energy.co.uk.

Economic analysis for the Renewable Heat Incentive for Ireland, for the Department of Communications, Climate Action and Environment and the Sustainable Energy Authority of Ireland (2017)

Under the 2009 Renewable Energy Directive, Ireland is committed to ensure that by 2020, 12% of its heating demand will come from renewable energy sources. As part of this, the Irish Government plans to introduce a Renewable Heat Incentive (RHI) to promote the deployment of a range of renewable heating technologies including heat pumps, biomass heating and solar thermal.

The Department of Communications, Climate Action and Environment (DCCAE) commissioned Element Energy to undertake the study An economic analysis for an RHI for Ireland. As part of this ongoing study, Element Energy and partners Frontier Economics developed a range of design options for the RHI and quantified the likely uptake of renewable heat and the associated cost to the government under each option. The study made recommendations on the preferred design for the scheme.

Following Element Energy’s advice, the RHI – now known as the Support Scheme for Renewable Heat (SSRH) – secured Government approval and the scheme was announced by the Minister for Communications, Climate Action and Environment, Denis Naughten TD, in December 2017. The scheme is expected to start in 2018, subject to European Commission state aid approval.

Information on Ireland’s RHI, including the press release and the report prepared by Element Energy, is available at the following link:

https://www.dccae.gov.ie/en-ie/energy/topics/Renewable-Energy/heat/Pages/Heat.aspx

Direct link to the report on the Economic analysis: https://www.dccae.gov.ie/documents/Economic%20analysis%20for%20the%20RHI%20in%20Ireland%20Combined.pdf

For further information, please contact Sam Foster at sam.foster@element-energy.co.uk.

 

Research on district heating and local approaches to heat decarbonisation, for the Committee on Climate Change (2016)

Leading a consortium including Frontier Economics and Imperial College, Element Energy assessed the potential contribution of a wide range of low carbon heat sources for heat networks, including biomass, water heat sources, industrial waste heat, sewage and others. As part of this, a state-of-the-art analysis of the spatial coincidence of waste heat and water sources with building heat demand was undertaken. In the Central case, the study found a cost-effective potential by 2030 of 42 TWh/yr for heat networks, covering around 10% of UK space heating and hot water demand and including the connection of around 1.5 million homes. An important role was identified for low carbon heat sources, leading to carbon emissions savings of 6 MtCO2/yr in 2030.

The project also made recommendations, supported by detailed modelling, on the policy interventions which will be required to enable such a level of roll-out of heat networks. Key recommendations include a financial incentive to heat network developers, which could be replaced by carbon taxation in the longer term, competition policy to address natural monopoly concerns and supportive planning policy in the form of dedicated ‘heat zones’ in suitable regions.

The full Element Energy report is available at the following link: Main Report

The CCC 5th CBR main report is available at the following link: The fifth carbon budget – The next step towards a low-carbon economy

The CCC 5th CBR Technical report is available at the following link: Sectoral scenarios for the fifth carbon budget – Technical report

Link to website of the public report: https://www.theccc.org.uk/publication/element-energy-for-ccc-research-on-district-heating-and-local-approaches-to-heat-decarbonisation/

For further information please contact sam.foster@element-energy.co.uk.

District heating by local authority area in 2050 in the Central scenario