Building Decarbonization: The Next Energy Transition Challenge

By James Kempf, CTO, Whygrene, Inc.

The headlines this summer leave no doubt that the long-predicted effects of human-caused carbon dioxide pollution on the global climate are now coming to pass: water temperatures in the Florida Straits above 100F, pollution from wildfires in the boreal forests of Canada turning the skies red over the US East Coast, and temperatures above 100F in July and August in the US southeast and southwest for weeks at a time. This was the hottest summer ever recorded. August temperatures have been around 1.5C hotter than the preindustrial average. In an early September prerelease of its annual report, the UN warned that countries are not phasing out fossil fuel use fast enough to meet the target of a maximum 1.5C increase above the preindustrial baseline and that there is a rapidly narrowing window for avoiding the worst effects of climate change.

The technologies to transition the global energy infrastructure from carbon-emitting fossil fuels to energy sources that don’t emit carbon, chiefly renewables such as solar and wind with batteries to smooth out intermittency, are there. For example, California receives about 30% of its electricity from renewable sources today, while Germany gets 50%. But deployment needs to be radically accelerated. In the electricity sector, a path to a 100% renewable grid is clear. In the transportation sector, the automobile companies compete to offer electric vehicles (EVs) with the most options and best range. Most people who try an EV agree that the experience is much more fun than an internal combustion vehicle and the life cycle cost for EVs is lower than for an internal combustion vehicle. EVs now represent 25% of the new car purchases in California, and more than 50% in some European countries. There remain some vehicle types, like heavy trucks, where products not powered by fossil fuels are still under development, and there are still too few public chargers, but by and large, decarbonization of transportation seems to be on track.

Utilities are introducing new programs with rate structures incentivizing EV charging at night when other loads are minimal and in the afternoon when solar generation provides an excess of electricity.

The built environment is the next challenge as society moves toward full decarbonization. According to the International Energy Agency, building operations are responsible for roughly 26% of global carbon emissions, with 8% being direct emissions and 18% being indirect emissions due to electricity use primarily for space heating and cooling, hot water heating, and lighting. As carbon emissions from electricity decrease, building emissions from these uses will naturally decrease as well. Yet, with the transportation sector and some industrial processes switching to electricity to achieve their own decarbonization, competition between building loads and these newer sources of grid load will increase. Programs for energy efficiency improvements in building infrastructure – sealing, increasing insulation, double pane windows and the like – have been around since the energy crisis of the 1970s but are even more important today as the transition to renewables accelerates. Every kilowatt-hour that is saved by energy efficiency improvements is a kilowatt-hour that the building owner doesn’t have to pay for, the grid operator doesn’t have to deploy additional capacity to serve, and that becomes available for new consumers such as EVs.

Among the remaining challenges with building decarbonization, the following two stand out:

Challenge 1: Retrofit is difficult.

Unlike moving from gas-powered cars to EVs, building decarbonization is largely a retrofit problem. Automobiles wear out and eventually need replacement, on average in the US, around every 10 years. Buildings, on the other hand, wear out much more slowly. estimates that 2/3 of the buildings in existence today will still be around in 2050. And because every building decarbonization retrofit project is basically a new problem, decarbonizing buildings is more difficult than decarbonizing transportation. Technologies such as heat pumps for hot water heating, space heating and cooling,  induction cooktops for cooking, and LED lighting can make a huge difference. Still, they need to be combined with appropriate energy efficiency measures applied to each building individually. Investment is needed in procedures and technologies to simplify retrofits, and codes and standards need to be in place so that when a homeowner’s hot water heater fails, their replacement choices only include carbon-free options. Otherwise, people will simply fall back on the quickest available solution, which is usually a gas fired tank heater, to get their hot showers flowing again.

Issue 2: Aging grid infrastructure.

Grid infrastructure is under pressure due to competition for electricity during peak usage times. If every EV in the neighborhood starts charging when owners come home from work on a hot summer day while all the houses have their air conditioning running and solar production is declining, a blackout is almost guaranteed. The grid requires balancing loads and supply at all times. Utilities are introducing new programs with rate structures incentivizing EV charging at night when other loads are minimal and in the afternoon when solar generation provides an excess of electricity. More fine-grained control can be achieved by deploying a virtual power plant. A virtual power plant is a collection of flexible loads such as heat pumps, building mounted solar panels backed up by batteries, and EVs that can both charge and discharge to the grid, orchestrated through sophisticated software control to help the utility achieve the right balance between load and supply.  For example, a home can be precooled in the afternoon to below the usual setpoint temperature by running the heat pump when solar-generated power is in excess; then, the heat pump setpoint temperature can be turned up in the evening when the grid is under stress due to reduced solar generation.

Both the US and Europe offer incentives to deploy decarbonization technologies on a massive scale, though they may need some tweaking along the way. Now, we need to extend the effort to developing countries in Africa and Latin America. The investments needed dwarf the information technology investment over the last 50 years, but both the environmental and economic returns will justify the cost many times over. The technology is there, the policy fundamentals are evolving in the right direction, and the effort now is to apply the technologies through the policy levers to achieve the goal of decarbonizing society by 2050.