Bringing down emissions from buildings to zero might be the hardest nut to crack for the European Green Deal. With heating and cooling in buildings responsible for 40% of energy consumption and 36% of emissions, the importance of its decarbonisation is paramount.
As the current annual renovation rate is below 1% and more than 70% of heating in buildings is supplied by old and inefficient boilers, buildings are unanimously recognised as a hard-to-decarbonise sector by the European Renovation Wave Strategy published in October 2020, the European Union (EU) Energy Efficiency Directive (EED) and various strategies of individual European Member States.
Due to the heterogeneity of the building stock and climatic conditions in Europe, a one-solution-fits-all approach will bring more headaches than benefits. A range of solutions will be needed to supply efficient and increasingly renewable heat to and in buildings. It will include reducing demand, direct electrification, district heating, high-efficiency combined heat and power, waste heat, solar thermal, and geothermal.
The choice between different decarbonisation solutions will largely depend on the seasonality of heat demand, the variability and limited capacity of renewable electricity supply, constrained electricity grids, customer preferences and the costs. Direct electrification with heat pumps is not always economically feasible in every building and will double the peak demand for electricity in winter in most European countries.
Therefore, the efficient use of hydrogen and renewable gases in buildings will be needed. In this regard, cogeneration, which combines the generation of heat and electricity in a single unit to be more efficient, will play a key role to complement an increasingly electrified and renewable energy system. This could be done via district heating combined with large-scale cogeneration or via micro-cogeneration systems inside buildings.
Since 70% of cogeneration is already low carbon today, these various combined heat and power solutions are significantly cutting CO2 emissions already. In the future, cogeneration will continue displacing more carbon intensive and less efficient generation.
Some examples of users include the City of Vienna which is using waste heat from power generation through cogeneration for its district heating network as well as the German local utility Stadtwerke Hassfurt which generates its own hydrogen from local renewable electricity and uses it in a cogeneration unit to supply regional customers with heat and electricity.
On the system level, with the electrification of heat, power grids will be increasingly constrained in winter as peak demand will more than double in many countries. When the uptake of electrified solutions is complemented by gas-based CHP systems roll-out in the same neighbourhood or region, expensive power grid updates can be reduced or avoided.
The integration of energy systems by optimally linking electricity, gas and heat networks will also yield a more flexible energy system and help integrate substantial amounts of renewable energy in the economy. Thus, it is crucial to make use of the existing wide gas grid which is covering more than 50% of the energy needs in European buildings today. Therefore, greening the gas grid must be considered a key objective for decarbonising the European building stock.
In the wake of the economic recovery from the COVID-19 pandemic, the European Commission has launched its “Recovery and Resiliency Facility” which aims to mitigate the economic and social impact of the pandemic. In its strategic guidance, the importance of pursuing economic recovery on the basis of the Green Deal is acknowledged by high efficiency CHP and district heating being recognised as solutions eligible to count towards the RRF’s 37% green recovery objective.
Currently, the Member States are drafting their national recovery and resilience plans which are due to be submitted by 30 April 2021. Most recently, Poland has launched a public consultation on its national recovery plan, with the current draft also foreseeing a replacement of inefficient existing heat sources with high efficiency cogeneration, renewable energy or waste heat to obtain energy efficient district heating systems (target: 85% of systems in Poland to 2030).
Therefore, the RRF presents an immense opportunity to support the decarbonisation of Europe’s buildings by fostering the uptake of highly efficient, future-proof and renewables-ready solutions like cogeneration. With the right incentives in Member States’ national recovery plans in place, the recovery pathway will also contribute to delivering an ambitious Green Deal and meet Europe’s climate commitments.