New research suggests that electric heating will increase generation costs and decrease transmission costs

The ESRI published a new Research Bulletin titled Decarbonising heat through electricity: costs, benefits and trade-offs for the Irish power system. Summarising results published in the academic journal Energy Policy, the research examines the impact on the Irish electricity generation and transmission system of electrifying heat via heating pumps.

The paper simulates the impacts of electrifying 20% and 30% of Irish residential heating demand, under different policy scenarios. The cost associated with retrofitting dwellings to the B2 BER standard required in order to support a heat pump was by far the greatest driver of costs. The total cost associated with the policy increases power system costs by 30% when 20% of heating is electrified, and by 46% when 30% of heating is electrified. However, the costs of generation investment, such as wind, solar and fossil fuel power plants, increase by 2.5% and 5% respectively, while the cost of transmission actually decreases, by 1.5% and 1% respectively. This suggests that electric heating can bring about a more efficient utilisation of the transmission system.

When the geographical location of heat pump investment was chosen such that it imposed the lowest cost on the power system, there was a small reduction in costs relative to a policy that saw heatpump investment at an even rate across the country. The location of heat pumps was driven by the location of the heat demand, with large investments in heatpumps in the Dublin region. In contrast, areas with high renewable supply and good availability of land for RES-E rollout, such as the West and Mid-West regions of Ireland, saw lower heat pump investment relative to a scenario where heatpumps were rolled out evenly across the country.

Commenting on the results, Muireann Lynch, Senior Research Officer and co-author of the paper, said “These results show that while electrifying heat has an impact on the electricity system, the biggest proportion of the costs of this policy arise on the retrofit cost. This highlights the challenges associated with decarbonising residential heating. Furthermore, contrary to our expectations, the demand for heat rather than the supply of electricity determined the optimal location of heatpumps.”