Carbon emission reduction potential in the Finnish energy system due to power and heat sector coupling with different renovation scenarios of housing stock

Abstract

In the pursuit of mitigating the effects of climate change the European Union and the government of Finland have set targets for emission reductions for the near future. This study examined the carbon emission reduction potential in the Finnish energy system with power-to-heat (P2H) coupling of the electricity and heat sectors with different housing renovation levels. The measures conducted in the energy system were conducted as follows. Wind power generation was increased in the Finnish power system with 10 increments. For each of these, the operation of hydropower was optimized to maximize the utilization of new wind generation. The excess wind generation was used to replace electricity and heat from combined heat and power production for district heating. The P2H conversion was performed by either 2000 m deep borehole heat exchangers coupled to heat pumps, with possible priming of heat, or with electrode boilers. The housing stock renovated to different levels affected both the electricity and district heating demands. The carbon emission reduction potential of the building renovation measures, and the energy system measures were determined over 25 years. Together with the required investment costs for the different measures, unit costs of emission reductions, €/t-CO2, were determined. The lowest unit cost solution of different measures was established, for which the unit cost of emission reductions was 241 €/t-CO2 and the reduced carbon emissions 11.3 Mt-CO2 annually. Moreover, the energy system measures were found to be less expensive compared to the building renovation measures, in terms of unit costs, and the P2H coupling a cost-efficient manner to increase the emission reductions.