A decision-support framework for residential heating decarbonisation policymaking

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 gasbased 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.