The race between hydrogen and heat pumps for space and water heating: A model-based scenario analysis

Abstract

This paper analyses different levels and means of the electrification of space and hot water heating using an explorative modelling approach. The analysis provides guidance to the ongoing discussion on favourable pathways for heating buildings and the role of secondary energy carriers such as hydrogen or synthetic fuels. In total, 12 different scenarios were modelled with decarbonisation pathways until 2050, which cover all 27 member states of the European Union. Two highly detailed optimisation models were combined to cover the building stock and the upstream energy supply sector. The analysis shows that decarbonisation pathways for space and water heating based on large shares of heat pumps have at least 11% lower system costs in 2050 than pathways with large shares of hydrogen or synthetic fuels. This translates into system cost savings of around €70 bn. Heat pumps are cost-efficient in decentralised systems and in centralised district heating systems. Hence, heat pumps should be the favoured option to achieve a cost-optimal solution for heating buildings. Accordingly, the paper makes a novel and significant contribution to understanding suitable and cost-efficient decarbonisation pathways for space and hot water heating via electrification. The results of the paper can provide robust guidance for policymakers.