Residential & Commercial sector

Today, both these sectors are so-called non-ETS sectors - meaning they are not subject to the European carbon price - and with a final energy demand of 34%, on top of being responsible for almost 20% of today’s Belgian CO2 emissions, a huge effort is required to reach carbon neutrality here.

The European Commission, however, proposed to introduce carbon pricing for buildings by regulating fuel suppliers as of 2026. As such, we imposed an increasing carbon price to all sectors to create a level playing field and let the EnergyVille TIMES-Be model search for the most cost effective trajectory to net-zero by 2050.

We have identified following options where technically possible, with the most recent costs and efficiency estimates towards 2050:

  • Energy efficiency improvements,
  • Fuel substitution,
  • Electrification,
  • Synthetic molecules (H2 and derivates)

Final energy use and CO2 emissions

As a general conclusion, we can state that the impact of the different scenarios is negligible in the residential and commercial sectors: in all three scenarios, the key to decarbonise these sectors is renovation, increased insulation and heat pumps, with a special role reserved for district heating fed by waste heat, deep geothermal energy or centralized heat pumps in suitable regions/districts with a dense buildings patrimony and high heat demand. Although the use of clean molecules was modelled too, this was not selected as a cost effective solution by the model.

Today, natural gas and fuel oil represent more than 65% of the final energy demand in these sectors, relied on for heating and hot water purposes. Electricity represents 34% of the final energy demand.

A cost effective trajectory towards a net-zero 2050, shows rapid investments in building insulation and a complete phaseout of fuel oil by 2030. Electric heat pumps and - to a smaller extent - district heating and biomass replaces the fuel oil boilers. Natural gas use decreases with more than 20% by 2030. 

By 2050 we notice a complete shift from natural gas to electric heat pumps and a limited amount of district heating as well.

This way, final energy demand in these sectors decreases from 122 TWh today to 70 TWh by 2050, which is a 43% efficiency improvement. Electricity demand amounts to 62 TWh or 89% of the final energy use.

Noteworthy is that this is only possible due to the use of highly efficient heat pumps, which are easily three times more efficient than a new gas boiler. Heat pumps are modelled with a heat buffer tank, so they can provide flexibility on a daily basis, for instance by operating during solar PV peak production. As colder outside temperatures have a negative impact on the efficiency of a typical air-air/water heat pump, the seasonal efficiency of the ambient air heat pumps is also taken into account.

The impact of the different scenarios on the decarbonisation choices made is negligible in the residential and commercial sector.

In all scenarios, CO2 emissions are almost halved by 2030.

Energy efficiency measures and a fast electrification of the final energy use lead to fast CO2 emissions reductions and a fully decarbonised sector by 2050.

  • By 2030, energy efficiency measures and electrification lead to
    status quo

    in electricity demand.

  • By 2030, heat pumps are installed in
    1,5 million

    residential homes and commercial buildings.

  • By 2050, district heating (8TWh) fulfills the demand of at least
    800.000 homes

    based on geothermal and waste heat.

    (Assumption: average heated surface 100 m², heating demand <100 kWh/m²)

  • By 2050, heat pumps with water buffers and electric water heaters provide

    to a highly renewable electricity system.

  • By 2030, renovation, insulation and
    fuel oil phaseout

    realise 50% CO2 reduction

Annual costs

The high gas/fuel prices and increasing carbon tax boost energy efficiency measures and electrification of the final energy demand.

Where the 3 scenarios showed comparable results with regard to final energy use and CO2 emissions, the annual costs to go from a scenario without climate ambition (run with a constant 50 €/ton carbon tax) to a net-zero 2050 future are different.

  • Central scenario: annual investment and operation costs amount to 0,7 billion euro by 2030 and 2,2 billion euro by 2050.
  • Electrification scenario: annual investment and operational costs are the same as the Central scenario for 2030-2040, but amount to 1,6 billion euro by 2050. These lower costs can be explained by a lower investment need in home battery systems due to the lower solar PV investments (-0,4 billion euro compared to the Central scenario) and a partial switch from heat pump systems for water heating to cheaper resistance heaters due to the lower electricity production costs (and wholesale prices) in this scenario.
  • Clean molecules scenario:  Lower electricity production costs (and wholesale prices) in this scenario lead to slightly lower costs in 2050, due to a partial switch from heat pump systems for water heating to cheaper resistance heaters compared to the Central scenario.

Now let's take a look
at the Transport sector

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