Coupling of heating/cooling and electricity sectors in a renewable energy-driven Europe

Abstract

The White Paper “Coupling of Heating/Cooling and Electricity Sectors in a Renewable Energy-Driven Europe” focuses on the implications of coupling the electricity, heating and cooling vectors as a vital part of efficiently decarbonising the whole European energy sector. To achieve decarbonisation, different renewable energy technologies for electricity and heating and cooling are needed, and in many cases, they could be coupled to increase energy efficiency. In addition to the traditional connection of heat and electricity in combined heat power (CHP) and Cogeneration plants, this White Paper elaborates on promising, often decentralised generation side as well as demand side technologies and solutions aimed at achieving efficient decarbonisation in terms of both energy efficiency and infrastructure optimisation. The “Fit-for-55” package is the first important milestone to reach carbon neutrality by 2050. It sets out concrete measures to reduce net greenhouse gas emissions by at least 55% by 2030, increase energy efficiency by 13% and lift the uptake of renewable energy to 45%. Many efforts are still needed to decarbonise the heating and cooling sector, it is lacking behind the electricity sector (2020: 23,1% vs. 37,5%, source Eurostat) A decarbonisation of the heat sector is important to reach the decarbonisation targets for the energy sector. In particular, the heat sector represents the most considerable portion of the European energy demand: half of the final energy consumption and a larger share of carbon emissions. Demand for heat comes from the residential, industrial and service sectors. Therefore, heating and cooling have to contribute heavily and fast to the reduction of greenhouse gas emissions. This can be achieved by increasing the share of renewable sources for heat and cold generation and through direct and indirect electrification (sector coupling solutions). In order to build up a reliable, sustainable and cost-effective energy supply system in Europe, flexible generation of electricity, heat and cold, and any kind of energy storage are needed to ensure the security of supply and decarbonisation. Both the successful implementation of sector coupling (cross-vector sector coupling and the end-use sector coupling) and a fully integrated energy system in a holistic power system architecture comprising all interactions within the power system itself, between the network - generation - and storage operators, consumers and prosumers, through market mechanisms, are mandatory for a successful energy transition and decarbonised supply of heat and cold. This White Paper provides an overview of the different sector coupling technologies: Renewable energy conversion technologies (solar-based combined generation, direct conversion of solar energy into heat, geothermal-based generation, biomass technologies, and hydrogen-based technologies), Renewable heat and heat recovery technologies (direct conversion of renewable electricity into heat, heat pump technologies, solar thermal technologies, innovative waste heat recovery cycles), Polygeneration (Cogeneration, Trigeneration) and District heating. This White Paper also describes the important role of the different storage technologies (e.g. thermal energy storage, chemical storage, i.e. hydrogen or synthetic fuels as the basis for decarbonised CHP and Cogeneration application) as sector coupling components to store excess renewable energy and thus to contribute to a sustainable and reliable energy system. Due to the focus on heat/cold applications, other forms of storage within the power grid (e.g., direct electrochemical storage, hydro pumps, electrical/magnetic storage) are not considered in this document. It is, in any case, well understood that batteries deliver significant contributions to storing excess renewable energy, especially in the context of sector coupling with the mobility system, ancillary services and home electricity storage solutions. The existing electrification and heating/cooling technologies are the basis for a fully decarbonised energy system. Their maturity status is briefly outlined in Chapter 4 whose message is that some of the existing technologies need to be scaled up to become economical. Chapter 5 highlights the importance of storage as a key element for coupling in all sectors. However, certain measures and efforts on R&D and market stimulation are needed to improve the technologies and to allow full system integration, thereby capturing the benefits of sector coupling. Chapters 6 and 7 describe the R&D needs and challenges to further develop the components and solutions necessary to deal with the increasing share of renewable energies in the grid, e.g. for sector coupling components, heat and power demand management systems, storage from energy system integration viewpoint and innovative business models. 9 Coupling of Heat/Cooling and Electricity Sectors in a Renewable Energy Driven Europe Coupling of Heating/Sectors in a Renewable Energy Driven Europe Public funding from European instruments is necessary to accelerate the development of the related technologies/systems, reduce the burden from technical and business risks, and support market uptake. From plant operators’ perspective, CAPEX and/or OPEX funding from European funding instruments is necessary to reduce the financial risks and to contribute to establishing positive business cases. As the transition towards a green future must be accelerated, new concepts should be already available and verified, at least at the prototype level. Available technologies need to be quickly up-scaled from pilot to real plant sizes, and investments have to be stimulated by regulations and incentives based on, e.g., CO2-pricing worldwide emission trading systems. To make clean and integrated technologies the standard, the market framework and the political mindset must change to make these technologies economically more competitive. Furthermore, renewables-based solutions should benefit from streamlined permitting and be given financial and institutional incentives while removing administrative burdens. The potential for intensified use of District Heating and Cooling (DHC) systems is meaningful across the EU. The energy transition towards renewable heating and cooling requires both technical, legal and economic skills. While the economic and legal framework is currently being shaped, a lack of design, planning and installation skills emerges. Quite often, the different sectors compete for the same competencies. Hence a thorough assessment and EU-wide coordination effort are recommended to ensure the education and training of a sufficient number of designers, planners and installers by making the "renewable energy" career path attractive and providing enough education and (re-)training facilities.