Xinyao Liu

Residential heating displays huge decarbonisation potential towards Net-Zero. The complexity of heating system and socio-economic system appeals for a systematic design to avoid exacerbating fuel poverty. This study develops a three-layer heat-for-all model which integrates building stocks analysis, distributed heating system optimisation, economic and environmental impacts simulation to tackle heating decarbonisation and fuel poverty simultaneously. This whole system model is a powerful decision support tool that can help conceive heating decarbonisation strategies for wider regions and countries. More than 400,000 scenarios are created, considering the effects of future policy schemes (No Grant, Business as Usual, Proposed), minimum emission reduction target, carbon intensity of grid, future natural gas, and electricity prices. Results show that optimised heating system decarbonisation plan heavily relies on future energy prices. In the case study, only air source heat pumps are chosen when electricity price is lower than 3 times gas price. Secondly, investment in heating system could stimulate the greenhouse gas emission of whole supply chain, hedging the emission reduction achieved in heating system. This further reveals that life cycle thinking is imperative in GHG emission mitigation. Thirdly, electricity decarbonisation plays a vital role in achieving whole system emission reduction. The grid carbon intensity reduction makes substantial contribution to the emission reduction of heating system and industry system. In tackling fuel poverty, it's worth noticing that the fuel poverty is aggravated with more grant support under certain scenarios, since current policy schemes focus on capital investment in heating system but overlook the increased energy bills. It appeals for a more comprehensive policy design considering all stakeholders. [Display omitted] •A three-layer whole system approach to tackle heating decarbonisation and fuel poverty.•Optimised heating system decarbonisation plan heavily relies on future energy prices.•Investment in heating system stimulates the greenhouse gas emissions of whole supply chain.•Electricity decarbonisation plays a pivotal role in whole system emission reduction.•Fuel poverty will be exacerbated without better policy design.

The decarbonisation of residential heating systems has become increasingly important to meet the global goals of minimising carbon emissions and combating climate change. However, with rising energy costs, this can be a significant challenge for low-income households. This study presents a novel optimisation framework to aid the decarbonisation of residential heating in the United Kingdom by combining technology-related decision-support with policy decisions. The framework can recommend the optimal retrofit of low-carbon heating technologies and fabric improvement measures such as insulation upgrades for improving energy efficiency. Concurrently, the optimal financial contributions towards investment costs from grants supporting low-income households and social housing is determined. It also includes piecewise linearisations to capture the detailed operation of air source heat pumps, which are set to replace natural gas-based heating systems, and assesses the eligibility of each dwelling for grant funding. A large case study consisting of social housing stock in Woking, UK, has been used to test the framework. Three scenarios are used to assess the efficacy of existing technology and policy combinations to meet local emissions reduction targets, which are benchmarked against emissions from existing gas-based heating systems and insulation measures. Results highlight the limitations of existing UK grants, as these can only achieve an emissions reduction of 33.5% without incurring significant additional investment costs to the local council. The lack of support towards installing hot water tanks, which are required for the operation of heat pumps, is another major limitation in existing grants. A proposed scenario, which introduces a fictional grant with unlimited funding, sheds light on the much larger grant contributions expected to achieve an emissions reduction of 66.8%, which surpasses local targets. These results also suggest the need for operational support to cope with much higher energy bills, especially for low-income and/or fuel-poor households, due to the electrification of heating systems. Overall, the framework is a useful tool for local councils, policy makers, and other stakeholders to make informed decisions on the affordable decarbonisation of residential heating systems.