Fraunhofer-Institut für System- und Innovationsforschung ISI

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  • Publication
    The race between hydrogen and heat pumps for space and water heating: A model-based scenario analysis
    ( 2024)
    Billerbeck, Anna orcid-logo
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    Kiefer, Christoph P. orcid-logo
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    Winkler, Jenny
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    Bernath, Christiane orcid-logo
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    Sensfuß, Frank
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    Kranzl, Lukas
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    Müller, Andreas
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    Ragwitz, Mario
    This paper analyses different levels and means of the electrification of space and hot water heating using an explorative modelling approach. The analysis provides guidance to the ongoing discussion on favourable pathways for heating buildings and the role of secondary energy carriers such as hydrogen or synthetic fuels. In total, 12 different scenarios were modelled with decarbonisation pathways until 2050, which cover all 27 member states of the European Union. Two highly detailed optimisation models were combined to cover the building stock and the upstream energy supply sector. The analysis shows that decarbonisation pathways for space and water heating based on large shares of heat pumps have at least 11% lower system costs in 2050 than pathways with large shares of hydrogen or synthetic fuels. This translates into system cost savings of around €70 bn. Heat pumps are cost-efficient in decentralised systems and in centralised district heating systems. Hence, heat pumps should be the favoured option to achieve a cost-optimal solution for heating buildings. Accordingly, the paper makes a novel and significant contribution to understanding suitable and cost-efficient decarbonisation pathways for space and hot water heating via electrification. The results of the paper can provide robust guidance for policymakers.
  • Publication
    Balancing the books: unveiling the direct impact of an integrated energy system model on industries, households and government revenues
    ( 2024)
    George, Jan Frederick orcid-logo
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    Marx, Alexander
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    Held, Anne
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    Winkler, Jenny
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    Bekk, Anke
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    Ragwitz, Mario
    Background: The transition towards a sustainable energy system is reshaping the demand for final energy, driven by the diffusion of new end-use technologies. This shift not only impacts consumers’ energy expenses, but also holds implications for the public budget. Building on data from a German energy transition scenario, we analyse the direct impact of energy costs on industries, low-income households, and changes in government revenues from the taxes and levies on final energy carriers. Our analysis considers the impact of current policies and explores a scenario introducing additional excise tax rates to offset potential revenue losses. Results: We found that substantial carbon price increases could generate revenues that offset the losses from excise taxes on fossil fuels while enabling the financing of renewable support from the public budget by the end of this decade. Nevertheless, a decline in government revenues from taxes and levies is anticipated after 2030 until the middle of the century due to the declining use of fossil fuels. Maintaining current excise tax revenues during the transition could be achieved by introducing additional excise taxes on fossil fuels and electricity. Lastly, our analysis indicated a continuous decline in household energy expenditures until 2050, whereas energy-intensive industries face adverse impacts due to decarbonisation. Conclusions: This research provides valuable insights into the fiscal implications of the energy transition, shedding light on different industrial sectors and households while considering the evolving impact on the public budget. Policymakers may need to consider systemic reforms or alternative financing mechanisms outside the energy system to balance the books.
  • Publication
    Perception of district heating in Europe: A deep dive into influencing factors and the role of regulation
    ( 2024)
    Billerbeck, Anna orcid-logo
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    Breitschopf, Barbara orcid-logo
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    Preuß, Sabine orcid-logo
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    Winkler, Jenny
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    Ragwitz, Mario
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    Keles, Dogan
    To increase the deployment of district heating in line with European targets, there is a need to understand consumer perceptions and the role of regulations. Therefore, this paper focuses on consumer perceptions of district heating and analyses the influencing factors. The analysis uses data from an online survey with 4388 participants from nine European countries. In particular, the paper discusses the impact of socio-demographic factors, attitudes and regulations on the perception of district heating. Statistical analyses show that respondents from Denmark and Sweden have the most positive perception, while respondents from Lithuania and the Netherlands have a less positive perception of district heating. In addition, the results indicate that respondents from countries with no mandatory connection, liberalised price regulation and mainly public ownership seem to have a more positive perception of district heating, higher satisfaction when using district heating and a more positive rating of their heating price than those from countries with mandatory connection, regulated prices and a more mixed ownership structure. Overall, the paper provides a first overview of possible factors influencing the perception of district heating and indicates that the mix of appropriate regulations and, in particular, their combined impact, could play an important role in perception.
  • Publication
    Policy frameworks for district heating: A comprehensive overview and analysis of regulations and support measures across Europe
    ( 2023)
    Billerbeck, Anna orcid-logo
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    Breitschopf, Barbara orcid-logo
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    Winkler, Jenny
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    Bürger, Veit
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    Köhler, Benjamin
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    Bacquet, Alexandre
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    Popovski, Eftim
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    Fallahnejad, Mostafa
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    Kranzl, Lukas
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    Ragwitz, Mario
    This paper presents an overview of policy frameworks for district heating (DH) in Europe. We develop a classification for policy aspects addressing DH, comprising regulation of ownership, prices, metering, consumer grid connection, third party access as well as support schemes and carbon taxes. This classification builds on existing literature and expert assessments collected in an online survey and interviews. The relevance of the paper lies in giving a comprehensive picture of the existing policy frameworks for DH in 23 European countries. For the overview, the countries are clustered along assigned categories. It is shown that the policy frameworks for DH can be clustered into five distinguishable groups. While some countries apply very strict regulations in special DH laws, others rely on less regulatory intervention, both with varying degrees of support for DH in place. The different policy frameworks are discussed in the context of the diffusion of DH and the integration of renewable and waste heat in DH. This analysis shows that high shares of DH and high shares of renewable and waste heat in DH can be observed in countries with a high degree of regulation as well as in countries with less regulatory intervention in DH markets.
  • Publication
    The landlord-tenant dilemma: Distributional effects of carbon prices, redistribution and building modernisation policies in the German heating transition
    ( 2023)
    George, Jan orcid-logo
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    Werner, Simon
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    Preuß, Sabine orcid-logo
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    Winkler, Jenny
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    Held, Anne
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    Ragwitz, Mario
    A carbon price on heating fuels aims to reduce the use of fossil energy in the heating sector. However, it has a greater effect on tenants than on landlords. The heating transition requires adequate building insulation for efficientuse of low-temperature technologies. To encourage this particular kind of investment, German landlords are given the option to apply a modernisation levy of up to 8% on top of rents. Similar to carbon pricing, rent increases cause distributional effects. The net effect of these measures on tenants has not been analysed so far. Using a micro-simulation integrating representative empirical data on tenant households in Germany from KOSMA and the detailed building database TABULA, we analyse direct distributional effects of a carbon price (€55/t and €250/t), a per-capita redistribution of carbon price revenues and the modernisation levy (8% and 2% rent increases). The analysis shows that carbon prices and modernisation levies have strong regressive effects. These can be mitigated by the per-capita redistribution. However, the effect on tenants within a given income decile varies largely due to the diversity of buildings. Thus, when designing and evaluating policies, looking at average effects is not sufficientto assess economic impacts for individual households.
  • Publication
    Decarbonization of district heating and deep retrofits of buildings as competing or synergetic strategies for the implementation of the efficiency first principle
    ( 2023)
    Popovski, Eftim
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    Ragwitz, Mario
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    Brugger, Heike orcid-logo
    This paper discusses the compatibility of district heating (DH) networks with deep retrofits of buildings under various European climate conditions and city typologies. The study analyses five cities with different DH market shares, climate zones, population densities, and transferability potentials. First, we have forecasted population, heated floor area, and share of floor area per construction period until 2050, and then calculated three different heat demand scenarios for varying building refurbishment rates of 1%, 2%, and 3% of the total floor area. Second, future suitable DH regions with min 25 GWh/km2 networks were identified. By applying a bottom-up GIS model, based on the type of city area, number of buildings, street length, and heat density, the DH distribution capital and operation costs were calculated. Lastly, to compare the total cost of heat supply for each scenario, the cost of individual heat per building type was calculated. The results show that even in the scenarios with high refurbishment rates of 3%, high percentage of the built-up areas, between 23% and 68% depending on the city typology, are suitable for DH supply in 2050. The share of DH from the total heat supply varies between 49% and 83%. An increase of the DH price between 14% and 35%, depending on the scenario and case study can be expected due to the reduced heat densities compared to the current ones. Nevertheless, maximizing the DH connection rates in the identified regions leads to lower total cost of heat in almost all the analysed case studies.
  • Publication
    Is blue hydrogen a bridging technology? The limits of a CO2 price and the role of state-induced price components for green hydrogen production in Germany
    ( 2022)
    George, Jan orcid-logo
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    Müller, Viktor Paul orcid-logo
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    Winkler, Jenny
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    Ragwitz, Mario
    The European Commission aims to establish green hydrogen produced through electrolysis using renewable electricity and, in a transition phase, hydrogen produced in a low-carbon process, or blue hydrogen. In an extensive cost analysis for Germany up to 2050, based on scenario data and a component-based learning rate approach, we find that blue hydrogen is likely to establish itself as the most cost-effective option, and not only as a medium-term low-carbon alternative. We find that expected CO2 prices below €480/tCO2 have a limited impact on the economic feasibility of electrolysis and show that substantial increases in excise tax on natural gas could lead blue hydrogen to reach a sufficient cost level for electrolysed hydrogen. Unless alternatives for green hydrogen supply through infrastructure and imports become available at lower cost, electrolysed hydrogen may require long-term subsidies. As blue hydrogen comprises fugitive methane emissions and financing needs for green hydrogen support have implications for society and competition in the internal market, we suggest that policymakers rely on hydrogen for decarbonising only essential energy applications. We recommend further investigations into the cost of hydrogen infrastructure and import options as well as efficient subsidy frameworks.
  • Publication
    Factors affecting the calculation of wind power potentials: A case study of China
    ( 2021)
    Franke, Katja
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    Sensfuß, Frank
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    Deac, Gerda orcid-logo
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    Kleinschmitt, Christoph
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    Ragwitz, Mario
    In order to mitigate global climate change and air pollution, the Chinese government has assigned high priority to expanding low-carbon power generation in China. Recent studies have shown that wind power is one of the most promising renewable energy option in China. Although many studies have estimated the generation potential of onshore wind power, their results vary widely from 1783 TWh to 39,000 TWh. Therefore, we examine the different assumptions in these papers and identify three main factors influencing the results. The three influencing factors are: weather data set, land utilisation factor, and wind turbine configuration. For our model-based analysis, we define a reference scenario which is used to compare the results. Our analysis shows using a different weather data set increases the generation potential to roughly 35,000 TWh. This is 54% higher than the generation potential of the reference scenario. The land utilisation factor also has a large influence, ranging between -10% and -51%. The studies' assumptions and data should be subjected to careful scrutiny, as the calculated wind power potentials are widely used to develop decarbonisation strategies for the energy system.