Decarbonization of residential space and water heating in California
This dissertation investigates options that exist to reduce emissions from residential space and water heating over the next few decades. There are four main research questions that I aim to answer:
1. What is the most promising route to decarbonizing residential space and water heating?
2. If heating becomes electrified, what new electric loads should we expect?
3. How might the building stock transition to electrified heating, and how can this transition occur at minimum cost?
4. What policy changes are necessary in California to encourage electrification?
These research questions are tackled one at a time, in each of the main chapters of the dissertation. In Chapter One I look specifically at California and build the case for why energy efficiency with electrification of heating is the most likely path to achieve the large carbon emission reduction needed from this sector. I examine alternative decarbonization strategies, such as solar thermal, biogas, synthetic natural gas, and electrification and show why electrification is likely to be the most promising path. I evaluated these options across the dimensions of scale, cost, and suitability. I find that electrification has the potential to serve all heating loads, while the other options may serve only 2-70% of loads. I also expect that electrification could reduce emissions from this sector at less than 1/2 the cost of other options. While electrification may be the most promising path in California, it is not necessarily the most promising path in all regions. The benefits of electrification and its limitations are discussed.
In Chapter Two, I estimate what new electric loads might look like if existing natural gas space and water heating transition to electric heat pumps. In order for electrification to gain support from policymakers, system operators, and utilities we need to better understand what impacts electrification of space and water heating would have on the grid. The electricity grid needs to be prepared for the additional load, and in order to do that we need to better understand the characteristics of new heating loads. I present a new method for estimating hourly residential space heating and water heating demand using hourly electricity consumption data (smart meter data) and daily natural gas data. This estimate was done using a dataset of 30,000 customer accounts in Northern California. I applied linear regression at both the individual house level and to hourly, climate-band-averaged whole-home electricity consumption, climate-band-averaged whole-home gas consumption, and outdoor air temperature data to determine both the hours when heating is more active and the outdoor temperature dependence of that consumption. This varying temperature responsiveness allowed me to assign varying amounts of space heating load to different hours. I then scaled up the results to the entire utility service area to show when and where electric heating will impact peak demand. About 1/2 of the residential space and water heating gas use could be electrified without any impact on peak demand. I also find that electrification of space and water heating would increase the load factor by at least 5%--and even more if heating loads are controllable. While electrification of heating would have little impact on peak demand on a systemwide basis (until very high penetration), at the distribution level electrifying heating loads may have an impact on peak demand for feeders that are mostly residential.
In Chapter Three I show how California could deploy hot water heaters to meet different emissions targets at lowest cost. I describe several scenarios and show what the lowest cost pathway would be as emissions are constrained. Different water heating technologies are considered, such as gas tank, gas tankless, electric resistance, and electric heat pump, and high efficiency electric heat pump with CO2 refrigerant. Emissions from natural gas leakage and refrigerant leakage are both considered. I have developed a linear program that minimizes total present operating and capital cost of statewide residential water heating. Relative to the lowest cost case, adding cumulative emissions targets can lower emissions from 71% to 77% without early retirement of water heating appliances. In order to meet a 90% reduction goal from the sector in 2050 (while minimizing cumulative emissions), heat pump water heaters need to have full market share in new construction immediately unless efficiency standards are increased, and most scenarios suggest that the lowest cost pathway include a transition to electric water heating that should have already occurred. Heat pumps need to begin replacing existing gas water heaters by the early 2030s at the latest, while most scenarios suggest that this transition should have already happened to minimize cost. Given projections for gas and electricity prices and costs of water heating equipment, an emissions target of a 90% reduction in 2050 relative to 2010 emissions could be met at a cost of $97-153/ton CO2 relative to the unconstrained, lowest cost case. Delaying action beyond 2017 makes the cumulative emissions target unreachable in two scenarios, while a third scenario allows delay until 2029, at a carbon cost of over $200/ton CO2.
Finally, in Chapter Four I examine potential policy changes that could be made to encourage a transition to electric space and water heating. Current energy policies and economics give an advantage to natural gas appliances over electric appliances. Simultaneously, California's climate policy is aiming for very large reductions in emissions, which will either be impossible or costly without a phase out of many natural gas end uses. Aligning energy and climate policy is possible, but will require several changes. Some potential suggestions are offered in this chapter mostly related to changes to the building energy code. In addition to changes to building codes, other options are also possible such as redesigning electricity rates that properly reward flexible loads. Specific legislation may also be required to jump start a transition to electric heating. Such policies have been put in place in the past to support other technologies that may have even less climate benefit per dollar.