Electricity dependency and CO2 emissions from heating in the Swedish building sector—Current trends in conflict with governmental policy?
Introduction
The Kyoto agreement has shown that there is an international will to mitigate global warming (IPCC, 2001) by reducing anthropogenic emissions of greenhouse gases (GHG). CO2 is the most important GHG in the sense that it is released in greatest quantities, and the major source for anthropogenic CO2 emissions is the burning of fossil fuels. The electricity used in Sweden has been considered to be CO2 free due to that the power production is almost entirely based on hydro and nuclear power. However, the conditions for the electricity market in Sweden and other northern European countries have changed during the last decade in a process towards deregulation. Thus, the cross-border trade has increased and the electricity market is in a process of harmonization throughout Europe with the Nordic power market fully integrated since the year 2000 with cross-border trading made in the Nordpool multinational exchange for trading electric power. As seen in Fig. 1, the Nordic supply curve implies that marginal electricity demand is supplied by coal-condensing power (Sweden Energy Agency, 2003) yielding high CO2 emissions. Therefore, a decrease of the electricity use in Sweden will reduce the CO2 emission on a European basis and will help Europe fulfill the Kyoto commitment. Thus, any additional installation of power-consuming heating systems will increase CO2 emissions. Since production of low-temperature heat from electricity is at present a common way of heating in the residential sector in Sweden it is important to evaluate scenarios for replacement of heating systems, especially since there are still new installations in electricity-based heating systems underway and that heating systems typically have an economic lifetime of 20–25 years. Also, from an exergetic consideration it is not thermodynamically sound to produce low exergetic energy (heat) from 100% exergy (electricity). For the last decade, an important aim of The Swedish energy policy has been to reduce the dependency of electricity in general (Appropriation direction for Swedish Energy Agency, 2005), and in particular to reduce the electricity used for heating in the building sector (Appropriation direction for the Swedish National Board of Housing, Building and Planning, 2005).
Investments in the energy system imply relative high capital cost and concern systems which have long technical and economic lifetime. Thus, the transformation of the energy system is a rather slow process and consequences of investments made today will last for several decades, reducing the possibility for near future changes of the system. An example from the building sector in Sweden, which is analysed in this study, is that in a neighbourhood where heat pumps have been installed in several buildings, the economic incentives for introduction of district heating are lowered. For the building sector there has been considerable turnover in the capital stock since the late 1990s, with significant investments made by both private consumers and energy producers. From mid-1980s to the late 1990s there was little change in the system with the energy- and fuel consumption, especially for single dwelling buildings, being almost constant, i.e. when replacing an old heating system this was mainly done with the same technology. The energy prices and especially the price of electricity were low on a regulated market with high supply capacity. The reason for the historically low prices for electricity in Sweden is that it is almost entirely produced from hydro and nuclear power (approx. 50/50 split) with especially hydro having low generation cost (the low cost for nuclear is by some argued to partly be due to that nuclear power is not bearing its external costs for waste-fuel storage).
The main reason for the recent and current investments in heating systems within the building sector is that prices have increased for fuel (oil and natural gas) as well as for electricity. In spite of an expected reduction in electricity price since the deregulation of the electricity market, the price for households has changed rapidly in the opposite direction, partly due to an increase in electricity tax and low levels in the water reservoirs for the hydropower (“dry years”). From 1997 to 2002 the consumer oil price raised from 38€/MWh to 54€/MWh and the electricity price from 78€/MWh to 97€/MWh (Swedish Energy Agency, 2003). At present (autumn 2004) the consumer price for oil and electricity is 96€/MWh and 90€/MWh, respectively. In addition, periods of governmental subsidies to convert from electricity to other means of heating have increased the propensity to make investments.
Following an increased awareness of the risks of climate change from anthropogenic emission of GHG, it is important to find strategies and policies which promote investments towards a more environmentally sustainable energy system at the lowest cost. To be able to transform the energy system in this direction it is important to find good strategies avoiding “lock in” effects. An example of a “lock in” effect in the Swedish building sector is a high diffusion of electricity for heating, due to the above-mentioned massive investment in nuclear power in the 1970s and 1980s, which together with hydropower resulted in low electricity prices. In the deregulated electricity market of today with fossil fuel as marginal production, electricity for heating is far from sustainable and the large number of single dwelling buildings without water radiators makes conversion to district heating (which in Sweden is considered CO2 neutral with main fuels being biomass and biomass-based waste) or biomass firing a difficult and costly task, i.e. there is a considerable lock-in effect in the residential heating system. As much as 14% of all buildings in the residential sector within the region of this study (25% of the single dwelling buildings) have local heaters (electric heated radiators), i.e. they are not equipped with central heating. This implies high substitution costs for investments in system with central heating and/or boiler-room and chimney (dependent on what heating technique to convert to).
The present work is part of a project which originates from the Energy Supply Committee of Southern Sweden, established by the Swedish Government in 1997, to develop the energy supply within this region. An important reason for setting up the committee was the strong dependence on nuclear power within the region, and the possible phasing out of this technology. There has been a political will among some political parties in Sweden to phase out nuclear power, although if and how this will be carried out has been under debate ever since a referendum held in 1980. In addition, the Swedish Government has been under pressure from both the public opinion and the Danish government to close down the Barsebäck nuclear power plant, since this plant is located only some 10 km from the City of Copenhagen. In February 1988 The Swedish Government decided to close the first nuclear reactor Barsebäck I, although due to an appeal against the decision it was not closed until November 1999. Recently, in October 2004, the Government decided to close also the second reactor Barsebäck II during 2005. It should be mentioned that the loss of generation capacity from these reactors are mainly covered by an upgrading of the remaining (10) nuclear reactors.
Since 1997, the Energy Supply Committee of Southern Sweden has initiated and supported measures to consolidate the supply of electricity and heating in the region. Ways to develop the infrastructure of the energy supply were investigated, such as finding opportunities to increase the use of renewable fuels, combined heat and power (district heating), back pressure in industry and efficient use of energy. Also, a number of demonstration projects have been established (Energy Supply Committee of Southern Sweden, 2000). Still, there is a need to illustrate and quantify how long-term environmental targets set on national and global levels can be implemented on a regional level. This will require that constraints and possibilities related to the infrastructure of the energy system are considered, as well as more soft aspects such as social preferences. The scope of this paper is to analyse the former aspect, here referred to as the energy infrastructure.
Work on energy systems reported in the literature are mostly performed on an aggregated level with a national or global perspective, based on techno-economical optimization models using forecasting or back casting methodologies (see e.g. Springer, 2003). In most of these works there is no direct link to constraints imposed by the energy infrastructures, such as the age structure of the capital stock. Jaccard et al. (1997) employed what they call Community Energy Management (CEM, an energy planning strategy) to four local regions in Canada and analysed scenarios which they compared to a business-as-usual (BAU) scenario. However, the results were not compared between the four regions and local constraints were not evaluated. In addition to the techno-economical based works, the Jaccard et al. study also considered urban land use and urban infrastructure (local conditions/infrastructure) in a proposed strategy to achieve energy and environmental goals. A study by Johnston et al. (2005) focuses on the housing stock in UK (i.e. residential buildings) and explores the technical feasibility of reaching 60% reduction in CO2 emissions by the year 2050 (60% is a UK national target on overall reduction in CO2 emissions). A detailed bottom-up energy and CO2 emission model is applied in which the technical conditions of the dwellings are included in the analysis, but local conditions and constraints are not taken into account. Carlson (2003) applies a cost optimization model to investigate scenarios for heating in the residential sector in a region of Sweden (“Östergötland”). The study includes external costs and the focus is on replacing electricity and fossil fuels with biomass, but local conditions such as heat density is not considered. Another similar techno-economical study was carried out by Cosmi et al. (2003) applying a regional version of the MARKAL model (R-MARKAL) for evaluation of environmental and economic effects of the use of renewable energy sources within an urban area, represented as two regions: a town in Southern Italy with a new suburban area. Each region is characterized by its reference energy system and linked by electric and heating flows. The joined optimization of the two regions was useful to improve the level of detailing in the analysis of the regions, yielding valuable information for local energy planning. Although these works give valuable insights into the costs and options for technologies and measures available for reducing CO2 emissions from regional energy systems, they do not take into account the capital stock in the existing energy infrastructure, i.e. the age structure of existing heating systems, conditions to change energy consumption in different buildings and local differences in heat intensity are not considered.
As pointed out above, to study and quantify how long-term environmental targets set on national and global levels can be implemented on a regional level should require that constraints and possibilities from the energy infrastructure are considered in the analysis.
The aim of this work is to try to find a scenario which minimizes the electricity used for heating in the building sector and which lowers the CO2 emissions from the heating. This aim implies a transformation of the heating system along a pathway that is in line with governmental policy, considering the power supply curve mentioned above (coal as marginal production). In order to be as little speculative as possible with respect to novel technologies, only commercially available heating technologies which are economically competitive when replacing the existing systems are considered in the study. The energy infrastructure is taken into account by a forecasting analysis which takes departure in a detailed description of the present energy system in the form of a comprehensive database. In order to be able to do this, the study is limited to a regional level. The energy infrastructure of this study is limited to the building stock and is divided into location and age structure of the buildings, local heat intensity and type of heating system in the buildings and the distribution of district heating systems (including plants with production parameters and location). The time period of the study is defined from an estimate of the maximum rate of change in the capital stock of these heating systems, with the economic lifetime determining the rate of change.
Section snippets
The region
The region studied is Southern Sweden, shown on the map given in Fig. 2 and with demographic characteristics listed in Table 1. The area of the region is 41,521 km2 and the population around 2 million. The region mainly consists of woodland and agricultural districts but there are also a number of cities and towns, shown as dark regions in Fig. 2. The region is divided into 67 municipalities, each with a local government. The local governments are responsible for decisions concerning land-use
Method
This work uses a detailed description of the existing infrastructure of the heating system in the region as basis for analysing development paths of the heating systems for the building sector. Two scenarios are compared, one which describes a development path towards a non-CO2 emitting system and one which is based on that the current trend of the development of the heating market continues. In short, the main assumptions in both scenarios are that only commercially competitive heating
Results and discussion
Fig. 4 shows recent development (1997–2002) of fuel consumption in the building sector of the region studied: Southern Sweden. As can be seen there has been a considerable reduction in the oil consumption in recent years. Also, the electricity use for heating has decreased, however less, while the use of district heating and biomass has increased. The bar in Fig. 4 denoted “Total electricity consumed” shows the total amount of electricity consumed in the building (residential and
Conclusions
A regional study on the potential for reduction in CO2 emissions and electricity demand from heating in the building sector is presented. The region studied is Southern Sweden. The study takes the energy infrastructure into account, focussing on the replacement in capital stock of the buildings and the heating systems together with geographical variations in heat intensity.
The present analysis shows a trend with an increase in electricity for heating mainly due to a strong diffusion of heat
Acknowledgements
This work is financed by the Swedish Energy Agency and the Energy Supply Committee of Southern Sweden.
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