Industry - more than just processes: A combined stock-model approach to quantify the energy saving potential for space heating in European industry

Space heating accounts for around 10 % of industrial final energy demand in Europe. This was equivalent to about 1,500 PJ in 2010, and exceeded the energy demand of energy-intensive sectors such as the European paper and printing industry. Studies of the residential sector have shown that improved building standards as well as new and more efficient heating technologies can significantly reduce the energy demand of buildings. Despite the high relevance of industrial space heating, so far, hardly any study has analysed its energy saving potential. We present a holistic approach to modelling the development of the energy demand for space heating for the EU27 until 2030 using a combined building and heating stock model. One of the main challenges when modelling space heating in industry is the lack of empirical data. Our methodology tackles this challenge by using distribution functions as input parameters where necessary. In this way, our approach bridges gaps in the input data and benefits from the advantages of a stock model at the same time. Furthermore, the stock model identifies major drivers of energy demand and plots a "realistic" diffusion of new technologies resulting from the replacement of heating systems/buildings. The adoption of new technologies is modelled using a logit approach to reflect investment decisions based on total-costs-of-ownership and to take market heterogeneity into account. Additionally, the approach considers the shares of phased-out heating systems to reflect path-dependency. We apply this model to a base scenario and then conduct sensitivity analyses, in which we analyse the effect of different potential policies on industrial buildings. The results indicate that the long-term energy saving potentials from space heating are relatively high with nearly 700 PJ compared to saving potentials in sectors like the iron and steel or pulp and paper industry. The results clearly justify the need for further analysis of this very important but currently mostly neglected end-use.