How should policymakers approach the challenge of reducing greenhouse gas emissions in residential buildings in a fast-growing city with high cooling demand?

A new paper published by a team of researchers at the University of Texas at Austin used their hometown as a test case to apply a customized energy system optimization model toward identifying the most cost-effective way to decarbonize residential buildings in the city.

The authors found that “optimal decarbonization relies primarily on the electrification of end uses and concomitant decarbonization of electricity supply.”

The findings are also a reminder, with so much energy industry focus devoted to achieving a low-carbon grid, that energy efficiency and rigorous building codes are essential elements of any low-cost, long-term emissions reduction strategy.

“Having more efficient buildings, you don’t just save on operational energy use, you save on the additional capacity you would need to satisfy peak demand. You also save, in the context of intermittent renewables, on storage to balance that peak issue,” Benjamin Leibowicz told Greentech Media in an interview.

Leibowicz, the lead author, is an assistant professor in the graduate program in operations research and industrial engineering at UT.

Overall, the researchers found that the net present cost of reducing CO2 emissions in Austin’s residential buildings by 90 percent by 2050 is a 7 percent increase compared to a benchmark that assumes no carbon policy changes over that same period.

The “fairly moderate” increase, the authors wrote, reflects both “steep recent and projected cost reductions for renewable electricity generation” and improvement in building energy efficiency that “generates substantial cost savings and significantly lowers the cost of climate policy.”

For instance, the research team found that upgrading the efficiency of residential buildings to the U.S. Green Building Council’s LEED Gold standard reduced the cost of climate policy by 37 percent compared to a scenario in which building efficiency does not improve at all through 2050.

Emissions reductions on the path to 2050

The UT Austin researchers developed their own version of the Open Source Energy Modeling System, a long-term energy planning tool, to model scenarios that encompass electricity generation and storage, residential building energy service demands, and end-use technologies, such as lighting and space and water heating equipment.

According to the authors, the study departs from existing research in three ways: They constructed hourly service demand profiles using appliance-level empirical data gathered by the Austin-based Pecan Street Inc. research network; they used CitySim software to simulate realistic building thermal efficiency scenarios; and they focused on a single city, Austin, rather than widening the scope to a regional, national or global scale.

The researchers modeled a total of eight scenarios divided into two buckets: a “No Policy” case and “Policy” case.

The No Policy case assumes that no CO2 regulations come into force through 2050. The Policy case aligns with Austin’s long-term emissions reduction target: net-zero CO2 emissions citywide by 2050.

The Policy case assumes that CO2 emissions from residential buildings are constrained and decline at the same rate as other sectors for Austin to meet its mid-century emissions target. In combination with the two policy cases, researchers then modeled four building thermal efficiency scenarios: no improvement, business-as-usual improvement, and buildings meeting either the LEED Silver or LEED Gold standards.

Thinking long-term

Another key insight from the paper is the need to design a policy framework with the carbon end goal in mind.

“It’s really important to think long-term about what your ultimate objectives are in terms of where emissions should go,” said Leibowicz. “Otherwise, you risk taking actions which might be optimal for meeting a less ambitious standard but are actually counterproductive if where you ultimately want to go is to reduce emissions to zero or near zero.”

The modeling for space heating in the paper is a clear example of this phenomenon.

In both policy cases, there is an initial shift to high-efficiency natural gas furnaces. In the No Policy case, that trend continues, and gas-fired furnaces provide all space heating in 2050. In the Policy case, however, the energy intensity of space heating declines by 58 percent between 2030 and 2050 as heat pumps completely displace natural gas furnaces.

“In the near term, [the model] tells you to improve the efficiency of existing gas-fired heating. Why? Well, gas is cheap in Texas and there are efficiencies to be had there,” said Leibowicz.

“But once you go beyond a certain policy stringency, then you really need to electrify. Then there’s really no more room, in the building sector, for direct consumption of fossil fuels.”

Electrification provides flexibility

An added benefit of switching to air-source heat pumps, heat pump water heaters, and other electric end-use technologies is the ability to reap incremental carbon savings as wind and solar power are added to the grid.

“The building stock changes really slowly, so one advantage of electrification is that it gives you optionality to change the future [electricity] mix with a fixed building stock,” said Leibowicz.

The City of Austin is working toward that end goal. Last August, the city council approved a plan that increased the city’s renewable electricity target to 65 percent by the end of 2027. About one-third of the city’s electricity comes from renewable sources today. This week, the local news website Austin Monitor reported that Austin Energy, the city’s publicly owned utility, is negotiating with a project developer to build a 144-megawatt solar farm in the Austin metro area.

Austin Energy also provides incentives for high-efficiency electric equipment. A rebate of $800 is available for heat pump water heaters, and rebates up to $600 are available for heat pumps.

The incentives align with the conclusions drawn in the UT Austin paper.

“Long-run climate constraints may require the severe reduction or elimination of direct fossil fuel consumption in buildings, with electrification the obvious alternative,” wrote the authors.