Hybrid heat pumps avoid extreme marginal abatement costs of electrifying peak heating loads in cold regions

Abstract

Electrification with heat pumps is often cited as a preferred pathway to decarbonize US space heating in the transition to a net-zero energy system. However, fully electrifying building heat may significantly increase peak electric system loads during cold weather, thus challenging extensive adoption. A hybrid home heating system uses both heat pumps and conventional natural gas furnaces, where the gas appliance operates during peak heating periods. Here, we assess the marginal abatement costs of fully electrifying peak heating demands as opposed to using hybrid heating. We use a least-cost energy system optimization model that considers household, electric, and gas system costs, including electric distribution system expansion and gas system cost recovery. To ensure the cost of sufficient low-carbon dispatchable electric capacity is captured, the model includes historical days with peak heating demands and low wind and solar availability. We find hybrid heat pumps can achieve substantial decarbonization, with US natural gas residential heating consumption decreasing 70% to 95% from 2020 levels at marginal abatement costs below $200 per tonne CO2e. The cost of fully electrifying heating in cold regions is very high, with the marginal abatement cost of eliminating the last 1% of natural gas consumption exceeding $1000 per tonne CO2e even in scenarios designed to be favorable to electrification. The robust value of hybrid heat pumps in northern cold climates indicates the importance of flexible building heat decarbonization policies such as clean heat standards.