The transformation of energy systems will require high investments in the coming decades – however, it is crucial that such change be affordable for all. In the political discussion about the ongoing energy transition, we must always acknowledge the broader social impact.
While large amounts of investments would be needed to make our energy systems fit for a climate-friendly world, conflicts and difficult trade-offs remain over the question of which solution should be adopted for which area. In E.ON’s opinion it would be very risky to commit to a certain technology or a single primary energy source at an early stage. It is important - also in order to demonstrate that no stones have gone unturned in our common quest for climate solutions - to keep an eye on the respective local conditions. To this end, the carried out jointly by E.ON and Stadtwerke Essen is summarised below to demonstrate the multiplicity of solutions in our green energy future.
Leonhard Birnbaum, CEO
Around a quarter of greenhouse gas emissions in the EU comes from the heating sector - so there is great potential to reduce CO2 emissions by redesigning how private homes are heated. There are plentiful of solutions supported by different experts, each with their respective advantages and drawbacks – one might consider a complete changeover to electricity-powered heat pumps for heating systems, others advocate for the expansion of district heating, and still many others are focusing on the potential of hydrogen. E.ON both acknowledges and welcomes such diversity of viewpoints – if anything it further adds momentum and inclusiveness to the ongoing energy transition and much needed climate actions. Beyond the considerations over technical constraints and investment needs, an inclusive energy transition must also take into account the overall social costs and potential issues over public acceptance. Indeed, it is easy for policy makers to forget that local situations are not the same and that there is no one-size-fit-all solution for different localities.
The current study demonstrates that a technology mix of broader electrification combined with deployment of green gas in some existing networks would be the most cost-effective and socially balanced solution to further decarbonise our heating systems. In five different scenarios, E.ON, together with Stadtwerke Essen, simulated what the heat supply of the future could look like for the Essen area. According to the study, which is based on the evaluation of anonymous digital data, the renovation and “greening” of existing gas grids should remain a viable and desirable option in many circumstances. By upgrading our existing gas grids, it will allow significant decarbonisation by making the transportation of renewable green gases possible. At the same time, as green gases would not be as remotely burdensome for the consumers as the other options, it will be particularly welcomed by and inclusive for low-income households, since it would not require extensive building renovations.
Decarbonisation through heat pumps : electrification of the heat supply would be the most efficient, but also the most expensive. Additionally, it would require a historically unprecedented level of modernisation rates in order for the appliances to be used sensibly.
Supplementing heat pump expansion with district heating: additional expansion of the district heating network would help speed up the modernisation and decarbonisation of our heating networks, but it alone would not be able to solve it entirely.
Direct electric heating ("immersion heater") supplement district heating expansion: This would solve the modernisation challenge, but it would also require excessive investments in electricity grid infrastructure and renewables. The main challenge in this scenario is the increase in heat-related electricity consumption from 400 GWh to 1,600 GWh. This would require the replacement or modernisation of two thirds of the local grid stations in Essen and would consequently only shift the cost burden.
Use of green gas: the gradual decarbonisation of the natural gas grid is cheaper and more socially acceptable overall.
Optimising the use of green gas and electricity by deploying hydrogen heat pumps - result: the intelligent use of hybrid systems combines the advantages of green gas and electrification and would require a much more manageable rate of system transformation.
The results can also be transferred to other urban areas. The results of this research are highly significant, as around 77 and 74 percent of the total population in Germany and in the EU lives in cities. With the help of energy transition’s twin - digital transformation, (which the title of the study also alludes to), overarching climate protection goals can be broken down regionally using data. This would allow municipalities to find suitable strategies for reducing CO2 emissions and to implement them together using local inputs while maximising inclusiveness.
It would therefore be politically unwise to focus on the search for one single "right" primary energy source. Existing gas grids are an important and indispensable asset in our heating systems of the future, where each would be adapted to local realities and specific needs. Using the existing gas grids is not only the most socially acceptable, but also the most economical. E.ON wants to gradually bring green gases into the energy system. This requires an appropriate political framework, for example a slowly growing quota for green gases.
Do not play energy sources off against each other Electricity and green gases both have an important role to play.
Implementing the energy transition in a socially balanced way In additional technical considerations, social and economic aspects must also be taken into account.
Green gas must be combined with electrification Different concepts should be used: Electrification and heat pumps, where possible and sensible, flanked by the expansion of district heating, local heating solutions and growing use of green gas.