The Road to Climate Targets Is Still Long

The share of renewable energies in electricity consumption has risen sharply in recent years. But electricity accounts for only part of the final energy demand in Germany. The building sector – i.e., primarily the heating of residential and commercial buildings – consumes about one-third of Germany’s total final energy. And this is still associated with high CO2 emissions: around 120 million metric tons per year, or about 15 percent of Germany’s annual CO2 emissions.

According to the Federal Climate Change Act, emissions are to be reduced to 70 million metric tons annually by 2030. There are several approaches to achieving this:

  • Renovate or insulate buildings, thereby reducing needed energy and emissions
  • Convert heating systems from fossil fuels such as oil and natural gas to more climate-friendly options such as heat pumps

The EWI researches how energy for the building sector can be provided as cost-effectively and climate-friendly as possible.

  • The role of renewable energy and synthetic fuels (e.g., power-to-gas) for greenhouse gas mitigation.
  • Strategies for increasing energy efficiency
  • Optimize household decisions on investments and the use of heating systems
  • Role of storage technologies in households

Overall, decarbonization in the building sector has stalled so far. There are several reasons for this:

  • Landlords have little incentive to install more efficient and climate-friendly heating systems or to renovate buildings. They bear the investment costs, but the tenants benefit from the future savings.
  • Investment cycles in the building sector are long, and the costs for new heating systems or renovations are high.
  • Contractors for remodeling are not always and everywhere available.

The building sector can only be climate-efficiently electrified if the share of renewable energies in the power supply is high or decentralized renewable technologies such as photovoltaics are used. Heat pumps are considered a key technology in this context. These electrically powered heating systems extract thermal energy from their environment, namely the air or the ground, and achieve high efficiencies this way. The use of synthetically produced, climate-neutral fuels such as methane or hydrogen from power-to-X is also being discussed as an option for greenhouse gas reduction.

Optimization of the Energy System Or the Household

In the EWI’s energy system model DIMENSION, systemic optimization is used to determine transformation paths that show how climate targets can be achieved cost-effectively. The building sector is represented here in a separate module that considers the German building and heating stock as well as the relevant technology options and their costs.

With the EWI’s household model COMODO, the energy supply of the micro-system household can be optimized. This optimization includes heating, hot water, and electricity. The model accounts for the investment and the deployment decision and considers climate targets, price structures, or infrastructure conditions. The model selects from conventional energy sources such as natural gas and decentralized technologies such as PV, solar thermal, and heat pumps and combines them with each other and various storage technologies.