Given that space heating represents more than half the final energy demand in both the commercial and the residential sectors, it deserves special attention, particularly since it is currently largely ensured by natural gas systems (Figure 6-9 and Figure 6-10).
There is a striking similarity across all NZ scenarios, in which natural gas rapidly decreases its share especially after 2030 and all but disappears by 2050. In the residential sector, this transition involves a comprehensive shift to electric heat pumps. In the commercial sector, the mix is more diverse, although electric technologies also dominate, including in district heating. These developments are in sharp contrast to REF and CP30, where natural gas retains a dominant role, particularly in the commercial sector.
Another similarity across scenarios is the contribution of energy conservation measures, particularly better thermal envelope insulation. While this contribution is important (equivalent to some 13% of total demand in commercial buildings and 20% in residential dwellings), it is worth noting that it is the same in net-zero scenarios as in REF and CP30, since measures identified in the model are low cost even with respect to current energy prices and are identified in all optimized pathways. It is difficult to integrate a number of more expensive energy conservation measures in the model as electricity prices are expected to remain low, which explains why they do not appear in the modelling results.
Figure 6.10 – Space heating systems in the commercial sector #
Figure 6.11 – Space heating systems in the residential sector #
Overall, the replacement of fossil fuel-powered systems (natural gas in most provinces, as well as oil products and biomass in some) by electricity in space heating is a key contribution to GHG reductions for the commercial and residential sectors, even with a short time horizon. This suggests that the buildings sector can be decarbonized at relatively lost cost with current technologies. As a result, it is clear that policy and regulatory incentives could rapidly ensure this evolution away from business as usual and could even be made to pursue more aggressive targets than the net-zero 2050 trajectory (NZ50) to achieve these reductions—particularly by encouraging a massive shift to electric heat pumps.
- Electrification, especially through heat pumps, can provide the additional advantage of increased access to air conditioning, thus limiting health impacts during heat waves, which are expected to be more frequent.
- Some cooling fluids can be important contributors to global warming. Heat pumps in the NZ scenarios do not include the warming potential associated with leaks. Only strict regulation can ensure that heat pumps do not become a major source of GHGs.