Tackling fuel poverty and decarbonisation in a distributed heating system through a three-layer whole system approach

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.