Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/315022 
Year of Publication: 
2024
Series/Report no.: 
EWI Working Paper No. 05/24
Publisher: 
Institute of Energy Economics at the University of Cologne (EWI), Cologne
Abstract: 
To tackle climate change, residential heating must become climate-neutral. Which technology cost-efficiently achieves this goal is a complex question, given the heterogeneity of buildings and existing infrastructure, as well as the uncertainty regarding future energy prices and grid fees. This article aims to disentangle this complexity by comparing the future costs of various decentralized and centralized climate-neutral heating options. Using Germany as a case study, we calculate the future levelized cost of eleven heating technologies for different building and settlement types and a wide range of assumptions for uncertain parameters, such as energy prices and infrastructure costs. We find that electric heat pumps are most often the economical choice within the modeled range of inputs when they are deployed either decentrally, in rural areas, or centrally, with heating grids in more urban areas. Hydrogen boilers can also be cost-efficient, mainly in rural areas and in scenarios with low hydrogen prices and grid fees or high electricity grid fees. By contrast, heating with synthetic natural gas seems unlikely to be economical across our broad range of plausible input assumptions.
Subjects: 
Infrastructure costs
Energy prices
Heat pumps
Hydrogen
Decarbonization
Techno-economic analysis
Levelized costs of heating
Residential heating
Building energy
JEL: 
Q40
Q42
Q48
D61
E61
Document Type: 
Working Paper

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