This week the European Commission tabled the Energy Performance of Buildings Directive (EPBD) which should accelerate the decarbonisation of buildings. Buildings and cities play a key role in the energy transition. And the target high shares of variable renewable power supply will be much more easily achieved if the sectors using them display demand flexibility. In essence, that means using or storing the excess wind and solar generation intelligently. Based on a new study “Sector Coupling in Facilitating Integration of Variable Renewable Energy in Cities”, IRENA’s Yong Chen and Dolf Gielen summarise the potential for sector coupling in cities. They draw attention to smart charging of EVs, thermal power storage for heating and cooling, and making hydrogen. They give as an example the State Grid Corporation of China, which serves 80% of the population. It has established an integrated platform for various EV charging facilities, networks and operators and large commercial clients. The authors also point at their modelling tools and pilot studies which are showing that, depending on the specifics, the renewable share of total final energy consumption can be doubled if sector coupling strategies are implemented successfully.
High VRE needs system flexibility
To reach net zero emission of carbon dioxide by mid-century, electricity from variable renewable energy (VRE) such as solar PV and wind power is expected to scale up from the current 10% of the global electricity generation to around 63% in the 1.5°C Scenario (IRENA, 2021). This poses an unprecedent challenge to grid operations and system flexibility.
The concept of sector coupling refers to decarbonisation of end-use sectors such as transport and heating in buildings with excess electricity generated from VRE sources. Sector coupling can create enhanced system flexibility (of electricity supply and demand), which is required to address the emerging challenges of high shares of VRE (Figure 1).
With the support of digitalised and smart systems, sector coupling technologies – such as electric vehicles (EVs) with smart charging, electric boilers and heat pumps, and electrolysers for hydrogen production – enable the demand to be more responsive to electricity prices or other signals in a physically interconnected network. EV smart charging and thermal energy storage have been analysed in more detail (IRENA 2019, 2020).
Intelligent energy management: EVs and smart charging
Electrified users could pose greater stress on the power grid if their demand for power capacity is not well managed. Energy management systems need to become “smarter and more intelligent”, particularly allowing interoperability between assets and systems. Flexible and intelligent grid operations reduce the need for additional generation capacity to meet rising demand, thus increasing the use rates of existing energy infrastructure. Electric vehicles (EVs) connected with smart charging facilities offer a case in point.
The synergetic coupling between power and transportation sectors requires smart charging and intelligent grid technologies, regulatory reforms for incentivising the provision of grid services, and innovative platforms for operating EV charging networks as well as business models. The benefits have been illustrated in various studies (Figure 2).
Flexible EV charging in China
State Grid Corporation of China (SGCC) serves 80% of the Chinese population. SGCC has established an integrated platform with various EV charging facilities, networks and operators and large commercial clients to address the interoperability issues facing the Chinese EV industry.
By the end of 2020, the platform has connected nearly 5 million customers and over 1 million charging facilities, 63% of which are public representing 93% of the national total public charging capacity (SASAC, 2020). Furthermore, SGCC has also advanced V1G and V2G, as well as the battery swap schemes in which the batteries for commercial buses and trucks can be swapped automatically in 3-5 minutes and then the replaced batteries are charged during the off-peak periods. China’s power system would be expected to serve 300 million EVs by 2040. Smart charging can reduce investment needs by 70% while EV batteries can provide 12 TWh of energy storage for SGCC to use for stabilising the grid operations by then (China5e.com, 2020).
Globally, with the rapidly growing numbers of EVs, the power grid operators need to plan ahead for increasing coupled power-transport sectors by adopting more advanced technologies with greater levels of control over the charging process using various technical options, thereby making the best use of electricity stored in the EV batteries to enhance the power system flexibility.
Equally important, the existing market design and regulation needs to be adopted to a new sector-coupled urban infrastructural system facilitating the increased integration of VRE in local energy networks and maximise the overall benefits by automatising the monitoring and operation of different assets and systems through enhanced intelligent energy management.
Thermal Energy Storage provides flexibility for heating and cooling
Decarbonising fossil fuel-dominated heating systems has been a persistent challenge. Along with the rapid scale-up of global renewable power generation capacity, switching from fossil fuel-based to electricity-based heating systems provides a decarbonisation option. Power to heat can be realised through energy efficient heat pumps. However, to balance the supply and demand in the power systems, thermal energy storage can facilitate the coupling of the power and heating sectors by adding grid flexibility (IRENA, 2020).
For example, thermal batteries that use phase change materials (PCMs) could form part of the solution. The technology can be used in conjunction with rooftop PV, grid electricity through electric resistance heaters or using a heat pump.
One such battery uses an inorganic salt hydrate, sodium acetate, which has a phase change temperature of 58°C. The PCM technology has been engineered so that it can run 41,000 cycles without any degradation. The thermal battery has four times the energy density of a water tank thermal energy storage (TTES) and is non-toxic and non-flammable.
Over a 15-year time period, which is less than half the potential lifetime of the battery, the battery can deliver heat at around USD 0.05 per kilowatt hour (kWh), which is considerably less expensive than the equivalent energy stored in an electrochemical battery. Given that the lifetime is expected to be much longer, and degradation impacts are negligible, the thermal battery is a far more cost-effective solution for providing energy for heat than electrochemical batteries. The latest battery is claimed to be 60-90% cheaper than the cheapest lithium-ion alternative, per unit of energy stored.
By the same token, thermal energy storage can also be used for storing cold energy, generated from refrigerators with excess electricity from VRE. Like the heating storage, the charging-discharging process of cold energy offers the grid flexibility.
Globally, cooling demand is currently much smaller than heating demand. But since 2010 it has been growing rapidly, particularly demand for space cooling, representing the fastest growth in end-use energy demand in the buildings sector. Global TES capacity for cooling needs to double to meet expected cooling demand in 2030. This implies investments of about USD 560 million over the next ten years, to reach USD 2.82 billion worldwide. Phase-change material (PCM) and other TES technologies can create the cooling flexibility needed to enable the integration of higher renewable power shares.
By 2050, cooling demand is projected to triple as a result of rising global demand for space cooling from a near-doubling of the urban population (90% of it in Asia and Africa) and also of the additional cooling demand for existing households facing warmer summers across the globe (GlobalABC, IEA and UNEP, 2019). Surging peak demand for electricity in hot summers poses an important challenge from a grid operation perspective (NASA, n.d.) and cold storage can be a strategy to deal with these.
Optimisation, modelling tools, pilot studies
Quantifying the sector coupling opportunities at a city level requires an integrated approach to evaluate the various trade-off options by applying a tool capable of modelling the increasing complexity and interconnectedness of energy systems.
The report also introduces a new modelling tool (Planning Platform for Urban Renewable Energy PURE) that can be used to evaluate sector coupling opportunities in the buildings sector. Sector coupling synergies and trade-offs can be assessed against optimisation objectives in different scenarios.
The tool was applied in a Chinese pilot study of Chongli district in Zhangjiakou city, site of the Olympic winter games. The analysis reveals that electrifying the heating sector through heat pumps and with excess electricity from the nearby wind farms, plays a central role to decarbonise the heating sector for the district. There would be around 360 GWh of surplus electricity consumed for the heating purpose. The use of heat pumps in combination with the district heating network provides opportunities for sector coupling for electricity and heating. One of the key factors to consider for the effective energy planning of Chongli district is increasing the seasonal energy storage capacity, which can be integrated into the heating system. In addition, sector coupling potentials in the public transport sector and other end-uses are also estimated in the analysis.
Another case study used the modelling tool for the capital of Costa Rica. Sector coupling options were assessed for two districts in the Greater Metropolitan Area: Desamparados and San Rafael. The results for Desamparados indicate that the renewable share of total final energy consumption can be increased from 36% to 60.4% by 2035 and from 39% to 100% by 2050, if sector coupling technologies are implemented. The locally generated renewable energy – mainly from rooftop solar PV – can be absorbed by electrification of the transport fleet, energy storage systems and/or used for producing hydrogen. Sector coupling potential also exists in the residential sector but depends on the household energy management system.
In San Rafael de Coronado, the analytical results have shown the optimised solutions consider both vehicle-to-grid and hydrogen as sector coupling solutions. Here, 10% of the vehicle storage capacity can be leveraged or used by the grid at the district level.
In summary, cities have been stepping up their efforts to address the global climate challenge by scaling up the use of renewable energy, both locally and regionally. With the growing shares of VRE sources in electricity production, power systems have increasingly required greater flexibility. In addition to specific sources of flexibility – such as utility-scale battery systems, regulating power capacities, and regulatory instruments – there is huge potential on the demand side.
Integration of high shares of variable renewables can be achieved if demand-side sector coupling is deployed. In addition, the production of hydrogen from renewable power via electrolysis greatly expands the options for enhancing energy system flexibility. Sector coupling is a key strategy for cities transitioning towards a net zero future. Cities hold great potential to accelerate, and also benefit from, the race to net zero.
Yong Chen is a Program Officer (Lead) for Sustainable Urban Energy, IRENA
Dolf Gielen is the Director of the Innovation and Technology Centre in Bonn, IRENA
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