Whole-system value of electrified district heating networks in decarbonising heat sector in the UK

Abstract

The UK's heat sector predominantly relies on natural gas and is responsible for about one-third of overall carbon emissions. Heating in domestic and commercial buildings contributes to about 20% of annual carbon emissions. Although the heat sector is one of the most challenging to decarbonise, electrifying the heat delivery in domestic and commercial buildings could significantly reduce carbon emissions in line with the UK Government's climate targets. This transition could also deliver significant reductions in overall energy system costs due to higher cross-vector flexibility in the electricity and heat sectors enabled by centralised and decentralised electric heating with thermal energy storage. While implementing electrified district heating networks will be prone to geographic limitations, centralised electric heating may potentially save significant costs due to efficiency benefits compared to decentralised solutions. The aim of this paper is to assess the whole-system value of using centralised heating technologies, including heat pumps, electric boilers, and thermal storage, to supply a proportion of heat demand in the UK in 2035, in contrast to decentralised electrified heat supply. The results of quantitative modelling presented in the paper demonstrate that using centralised electric heating can lead to significant annual system cost savings when compared to a decentralised electric heating paradigm.