In September, the European Commission announced plans to raise its 2030 EU-wide greenhouse gas reduction target, from 50% to 55%. For energy consumers, the biggest change will be in how we heat our homes, with a big shift away from fossil-fuelled heating appliances towards those powered by renewables.
To be able to meet the target, the Commission expects that, in 2030, the share of electric heating in buildings will need to reach 35-37%, up from 25% in 2015. This increase will mean that with the rising share of wind and solar energy, consumers will increasingly be able to heat their homes with renewable electricity.
Since the sun does not shine and the wind does not blow all the time, this also means that we will need to heat our homes differently. If we do not do this, then peaks in electricity demand may mean fossil fuelled power plants have to step in to provide extra electricity. These back-up plants would not only be paid through consumers’ energy bills but also lead to increased CO2 emissions.
The good news is that consumers living in energy efficient homes will be able to heat their homes when there is more renewable electricity available, if they have an incentive to do so. Energy efficient buildings naturally store heat, which means that consumers will be able to, for instance, warm their homes when the sun is still shining and abundant renewable electricity is available. The building will remain sufficiently warm until later in the day.
The other good news is that this will be able to happen without any hassle or inconvenience for consumers. Automated heating appliances, which will allow consumers to use electricity when there is plenty of cheaper renewable electricity, are starting to become available in several European countries.
However, although smart electrification of heat is technically possible, consumers will only widely embrace it if they are financially rewarded for doing so – and if it is affordable to start with – and have adequate protections and guarantees in place.
First, consumers need a financial incentive to become flexible. We will only achieve this kind of flexibility if ‘dynamic electricity price’ and ‘aggregation’ contracts become widely available from energy providers across Europe.
Advice for the best solution should be at hand, as well as predictable regulation that can nudge consumers to make the right investments. The smart electrification of the heating sector should also prioritise consumers living in energy poverty and be combined with home renovation. After all, heating with renewables is good for the planet, but an energy passive building will help save consumers money.
Second, consumers need guarantees that their automated heating appliances actually respond to their requirements. For example, to be able to set a time at which the temperature in their living room should reach a certain level.
Third, consumers should be able to easily override automated decisions, in case they have a special need to do so. During illness, for example, consumers may want to heat their homes more than usual to have a sufficient level of comfort.
Getting all of this right will enable many more consumers to contribute to the energy transition. More renewable energy means we need more flexibility in our energy system. Consumers are ready to provide this flexibility, but only with the right protections and guarantees in place. Doing so will be vital to ensure Europe delivers on climate neutrality and at the lowest possible cost.
BEUC recently published a factsheet with further information on consumer needs and expectations in smart electrification, which can be found here.