In the competition to diminish climate-altering carbon emissions, the construction sector is lagging. While carbon dioxide (CO2) emissions from the U.S. electric power sector decreased by 34 percent from 2005 to 2021, emissions from the building sector fell by merely 18 percent during the same timeframe. Additionally, in severely cold regions, the combustion of natural gas for home heating can constitute a significant portion of the emissions inventory. Consequently, initiatives to electrify buildings overall, and specifically residential heating, are crucial for decarbonizing the U.S. energy framework.
However, this transition will heighten electricity demand while lowering the need for natural gas. What will be the overall effect of these two alterations on carbon emissions and on the expense of decarbonization? Furthermore, how will the electric power and natural gas industries adapt to these new challenges in their long-term strategies and infrastructure expenditures?
A recent study conducted by MIT researchers, with backing from the MIT Energy Initiative (MITEI) Future Energy Systems Center, examines the effects of varying levels of residential heating electrification on the integrated power and natural gas systems. A specially designed modeling framework allowed them to estimate not only the additional costs and emissions for the power sector to satisfy the heightened demand but also any fluctuations in costs and emissions resulting for the natural gas sector.
The evaluations yielded some unexpected findings. For instance, they indicate that — under specific conditions — converting 80 percent of residences to electricity for heating could reduce carbon emissions while simultaneously decreasing expenses across the combined natural gas and electric power sectors compared to a scenario with only slight conversions. This outcome relies on two factors: Consumers must invest in high-efficiency heat pumps and implement measures to mitigate heat losses from their homes, and planners from both the power and natural gas industries need to collaborate in their long-range infrastructure and operational planning. Based on their conclusions, the researchers emphasize the importance of robust state, regional, and national policies that promote and aid the measures homeowners and industry planners can take to assist in decarbonizing today’s building sector.
A dual-part modeling approach
To assess the effects of residential heating electrification on expenditures and emissions in the interconnected power and gas sectors, a team of MIT specialists in building technology, power systems modeling, optimization methodologies, and more developed a dual-part modeling framework. Team members included Rahman Khorramfar, a senior postdoc in MITEI and the Laboratory for Information and Decision Systems (LIDS); Morgan Santoni-Colvin SM ’23, a previous MITEI graduate research assistant, currently an associate at Energy and Environmental Economics, Inc.; Saurabh Amin, a professor in the Department of Civil and Environmental Engineering and principal investigator in LIDS; Audun Botterud, a principal research scientist in LIDS; Leslie Norford, a professor in the Department of Architecture; and Dharik Mallapragada, a former MITEI principal research scientist, now an assistant professor at New York University, who directed the project. They discuss their novel methods and findings in a paper published in the journal Cell Reports Sustainability on February 6.
The initial model within the framework assesses how varying degrees of electrification will alter end-use demand for electricity and natural gas, along with the impacts of potential energy-saving actions that homeowners can undertake. “To conduct that analysis, we established a ‘bottom-up’ model — meaning that it examines electricity and gas usage of individual buildings and subsequently aggregates their consumption to derive an overall demand for power and gas,” explains Khorramfar. By considering a comprehensive range of building “archetypes” — groupings of buildings sharing similar physical characteristics and properties — alongside trends in population growth, the team was able to investigate how the demand for electricity and natural gas might shift according to each of five presumed electrification pathways: “business as usual” reflecting slight electrification, medium electrification (around 60 percent of homes electrified), high electrification (around 80 percent of residences converted), and medium and high electrification with “envelope improvements,” such as sealing heat leaks and improving insulation.
The second component of the framework consists of a model that utilizes the demand outputs from the first model as inputs and “co-optimizes” the entire electricity and natural gas system to minimize annual investment and operating expenditures while respecting any constraints, such as emission limits or resource availability. Thus, the modeling framework empowers the researchers to investigate the effects of each electrification pathway on the infrastructure and operational costs of the two interlinked sectors.
The New England case study: An electrification challenge
As a case illustration, the researchers selected New England, a region known for its occasionally frigid weather and where the use of natural gas for heating contributes notably to overall emissions. “Critics may argue that electrification is never going to happen [in New England]. It’s simply too costly,” states Santoni-Colvin. However, he notes that most studies tend to concentrate on the electricity sector independently. The new framework looks at the coalesced operation of both sectors and quantifies their respective costs and emissions. “We understand that electrification will necessitate substantial investments in electricity infrastructure,” mentions Santoni-Colvin. “But what hasn’t been thoroughly quantified in existing literature is the cost savings we achieve on the natural gas side by implementing these changes — hence, the system-level savings.”
Utilizing their framework, the MIT team executed model simulations targeting an 80 percent reduction in building-sector emissions relative to 1990 levels — an objective aligned with regional policy aspirations for 2050. The researchers outlined parameters, including specifics regarding building archetypes, the regional electric power system, current and potential renewable generating systems, battery storage capabilities, natural gas availability, and other crucial factors defining New England.
They subsequently conducted analyses considering various scenarios with different combinations of home upgrades. While most studies typically adopt average weather conditions, they formulated 20 annual weather projections based on historical data and adjusted for climate change effects through 2050. They then examined their five electrification levels.
In comparison to business-as-usual projections, results from the framework indicated that extensive electrification of residential heating could more than double the electricity demand during peak times and raise total electricity consumption by nearly 60 percent. Assuming that building-envelope enhancements are implemented alongside electrification diminishes the scale and weather sensitivity of peak loads and creates overall efficiency improvements that decrease the combined demand for electricity and natural gas for home heating by up to 30 percent relative to current levels. Importantly, a combination of high electrification and envelope
Enhancements led to the lowest average expense for the entire electric power-natural gas system by the year 2050.
Key Takeaways
Substituting current natural gas-powered furnaces and boilers with heat pumps decreases overall energy usage. Santoni-Colvin describes it as “somewhat of an obvious conclusion” that is anticipated since heat pumps are “considerably more efficient than outdated, fossil fuel-dependent systems. Nevertheless, we were astonished by the improvements.”
Additional unforeseen outcomes emphasize the significance of homeowners undertaking more conventional energy efficiency enhancements, like installing insulation and sealing air leaks — measures backed by recent rebate schemes. These modifications are vital for minimizing expenses that would otherwise arise from upgrading the electricity infrastructure to handle increased demand. “You can’t simply start installing heat pumps in every home without also evaluating other methods to mitigate peak loads. Thus, a comprehensive ‘all of the above’ strategy is essential to achieve the most economical result,” explains Santoni-Colvin.
Evaluating various weather scenarios also yielded crucial insights. The demand for heating fuel is highly dependent on weather conditions; however, most research relies on a narrow range of weather data — frequently based on a “typical year.” The scholars discovered that electrification can induce prolonged peak electric load periods that may persist for several days during frigid winters. As such, the researchers deduce there will be an ongoing necessity for a “firm, dispatchable” electricity source; in other words, a power-generating setup that can consistently produce power whenever required — in contrast to solar and wind energy systems. They modeled several potential technologies, including power plants fueled by low-carbon resources or natural gas outfitted with carbon capture technology. However, they caution that it remains uncertain what types of firm generators will be available come 2050. It could be a technology that is not yet developed, or possibly, does not even exist at present.
In sharing their results, the researchers highlight a number of considerations. For starters, their evaluations do not account for the projected costs for homeowners to install heat pumps. Although this expense is widely addressed and debated, that matter lies outside the purview of their current study.
Moreover, the research does not clarify the fate of existing natural gas pipelines. “Certain households will transition to electrification and disengage from the gas system, consequently avoiding its costs, while other homes will face rising rates as the costs of the gas system must now be distributed among fewer consumers,” comments Khorramfar. “This will inevitably raise equity issues that policymakers should tackle.”
Lastly, the researchers assert that policies are essential to promote residential electrification. Present financial incentives for the installation of heat pumps and measures to enhance thermal efficiency in homes provide a promising beginning. However, these incentives must align with a new strategy for planning energy infrastructure investments. Traditionally, electric power planning and natural gas planning have been conducted independently. Nevertheless, to achieve decarbonization in residential heating, both sectors must collaborate when devising future operational and infrastructure requirements. Findings from the MIT analysis suggest that such synergy could significantly decrease both emissions and expenses related to residential heating — a transformation that would present a crucial advancement toward decarbonizing the overall buildings sector.