Using Electricity for Heat Creates Massive Carbon Reductions, RMI Finds

(Figure: Demand flexibility can shift loads into times of high renewable output or low cost. Credit: Rocky Mountain Institute)

Businesses and homes that use electricity for heat instead of fossil fuels can avoid 10% of US carbon emissions, a new report from the Rocky Mountain Institute found. In addition, the RMI analysis concluded that those savings can increase the use of smart grid-connected devices, maximizing the efficient use of renewable energy.

RMI’s new report, “The Economics of Electrifying Buildings” compared electric space and water heating to fossil fuel-sourced heat for new construction and home retrofits under varying electric rate structures in Oakland, California, Houston, Texas, Providence, Rhode Island, and Chicago.

“Seventy million American homes and businesses burn natural gas, oil, or propane on-site to heat their space and water, generating 560 million tons of carbon dioxide each year,” the report says. “And reaching ‘deep decarbonization’ goals of 75% or greater reduction in greenhouse gas emissions will require eliminating most or all of the CO2 produced by furnaces and water heaters across the country, alongside other measures.”

The RMI analysis says that electric space and water heating can be managed in a way that shifts energy consumption in time, helping integrate large amounts of renewable energy onto the grid affordably.

Although the analysis focused on single-family homes, which make up the majority of carbon emissions from buildings’ fossil fuel use, RMI notes that meeting cities’ and states’ deep decarbonization goals will require commercial building electrification.

Jacob Corvidae, principal at RMI’s Buildings practice, told Energy Manager Today that it’s possible to extrapolate the following insights for commercial buildings from the new report:

• As with residential buildings, the opportunities and cost savings for electrification are usually best for new construction. In other words: build it for an electric future now so you don’t have to retrofit it later.
• Small commercial buildings are more similar to residential buildings than they are to large commercial facilities. As such, the takeaways from this report regarding heating and water heating in different fuel and climate contexts will generally be the same for small commercial buildings.
• For all their supposed variety, residential solutions are often much simpler and more straightforward. Commercial buildings have a much greater variety of form, system design, balancing considerations and equipment options. All of that means that determining the cost-effective path can require more detailed individual assessment for buildings. RMI's portfolio energy optimization work, however makes this process much easier for entire portfolios of commercial buildings.

The new report shows that demand flexibility can shift loads into times of high renewable output or low cost.

“The value of electric demand flexibility is likely to increase as variable renewables grow on the system, increasing the price spreads in electricity markets,” according to the report.

Earlier this year, RMI demonstrated that demand flexibility can offer significant savings for commercial utility customers. “Demand flexibility technologies allow commercial customers to manage their energy use without sacrificing productivity or occupant comfort, and minimize energy bills,” RMI principal Mark Dyson said at the time.