Delta Energy & Environment Ltd Registered in Scotland: No SC259964 Registered Office: Floor F, Argyle House, 3 Lady Lawson Street, Edinburgh, EH3 9DR, UK Forecasting gas demand for heating in Belgium Interim results of Gas.be study, TAG 2018 Stephen Harkin, Delta-ee November 2018 Email: Stephen.harkin@delta-ee.com
Today I will discuss Scope of the study for Gas.be Gas demand in Belgium today Drivers for change Outlook for gas demand to 2030 and 2050 Next steps for the Gas.be study 2
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Today I will discuss Scope of the study for Gas.be Gas demand in Belgium today Drivers for change Outlook for gas demand to 2030 and 2050 Next steps for the Gas.be study 5
Scope of project: Forecasting gas demand in Belgium to 2050 2015 study DSO connected Residential heating Commercial heating Industrial process heat BRUSSELS FLANDERS WALLONIA ANNUAL PEAK Today 2030 2050 6
Today I will discuss Scope of the study for Gas.be Gas demand in Belgium today Drivers for change Outlook for gas demand to 2030 and 2050 Next steps for the Gas.be study 7
GWh GWh Gas demand in Belgium today 700 Total gas demand by region 2017 600 500 400 300 200 100 0 700 600 Jan - 2017 Jun - 2017 Dec - 2017 Brussels Wallonia Flanders Residential & non-residential gas demand in Belgium 2017 500 400 300 200 100 - Jun - 2017 Jan - 2017 Dec - 2017 Residential Non-Residential Source: Fluxys, 2018 8
Regional variations will drive different outlooks for gas demand FLANDERS BRUSSELS WALLONIA Multi family homes: 0.7 million dwellings 25% 33% Single family homes: 0.2 million dwellings Multi family homes: 0.3 million dwellings 19% 75% Single family homes: 2.2 million dwellings Multi family homes: 0.3 million dwellings 67% 81% Single family homes: 1.3 million dwellings Dwellings by main fuel type Dwellings by main fuel type Dwellings by main fuel type 61% 77% 39% 0% 20% 40% 60% 80% 100% Natural Gas Fuel Oil Coal LPG Electricity Wood 0% 20% 40% 60% 80% 100% Natural Gas Fuel Oil Coal LPG Electricity Wood 0% 20% 40% 60% 80% 100% 39% Natural Gas Fuel Oil Coal LPG Electricity Wood Dwellings by age million 1,5 1 0,5 0 Pre-1970 1970-1990 1991-2006 2006-2014 Dwellings by age million 0,4 0,3 0,2 0,1 0 Pre-1970 1970-1990 1991-2006 2006-2014 Dwellings by age million 1 0,5 0 Pre-1970 1970-1990 1991-2006 2006-2014 Mainly single family homes 60% on gas More modern dwellings Two thirds flats Three quarters on gas >70% very old Mainly single family homes Lowest share on gas (39%) >70% very old 9
Today I will discuss Scope of the study for Gas.be Gas demand in Belgium today Drivers for change Outlook for gas demand to 2030 and 2050 Next steps for the Gas.be study 10
Drivers of change Customer attitudes & awareness Technology costs Energy prices Technology performance Policy & regulations Manufacturer push Installer attitudes Housing stock Current heating market structure. 11
Drivers of change More efficient gas appliances Condensing gas boilers Gas driven heat pumps Micro-CHP / fuel cell Boiler plus options Better controls Energy efficiency Insulation New build regulations Electrification of heat Heat pumps (air source & ground source) Hybrid gas boiler with electric heat pump 12
% uptake Applying these drivers to our forecasting approach Summary of high level approach for forecasting the uptake of heating appliances in Belgium: Annual replacements in one segment Step 1: Scenario development & assumptions. 1 Step 2: Housing stock segmentation of the Belgian dwelling stock. 2 3 Step 3: Techno economic modelling of different heating appliances in different housing segments. Economics Physical fit Soft factors Step 4: Step 5: Calculate the market uptake % of each technology in each housing segment. Apply the final market uptake % for each appliance to the addressable market in each housing segment Customer awareness Installer attitude Customer appeal Market Push Customer familiarity/trust Government commitment 13
Today I will discuss Scope of the study for Gas.be Gas demand in Belgium today Drivers for change Outlook for gas demand to 2030 and 2050 Next steps for the Gas.be study 14
Outlook for Flanders FLANDERS Gas demand impact 2021; Gas grid extensions no longer allowed. HP tariff / carbon tax on gas introduced?? Oil / electric impact Other Renovation Pact coming into force. Electricity prices rise more strongly in light of nuclear phase out HP & low carbon gas appliance costs come down, and installer & customer acceptance grows. Gradual displacement of gas boilers. 2020 2025 2030 2035 2040 2045 2050 Incentive for condensing gas boilers. Increasing premiums for HPs. Phase out noncondensing boilers Oil no longer allowed in new build Increasing push for low carbon gas appliances, as part of ambition to accelerate 'transition' system uptake Energy Pact: oil boiler replacement ban. Insulation improvements driving down thermal demand of housing stock Energy Pact: all new builds no longer allowed to connect to gas. Share of gas appliances decreases strongly in favour of HPs, but they still make up more than 50% 15
Installed base of heating appliances Appliance mix to 2030 in Flanders provisional results 3.500.000 3.000.000 2.500.000 2.000.000 1.500.000 Evolution of the installed base of heating applainces in Flanders Appliance type 2018 forecast Volume in 2030 Share of installed base Gas 2,031,000 61% Oil 815,000 24% 1.000.000 500.000 Share of gas appliances remains similar to 2030 Electric 461,000 14% Other 48,000 1% - 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 Gas appliances Oil appliances Electric appliances Other 16
Installed base of heating appliances What happens to the appliance mix to 2050? - provisional results 3.500.000 Evolution of the installed base of heating applainces in Flanders 3.000.000 2.500.000 Electric appliances (mainly ASHP) increase to ~1.4 M 2.000.000 Oil appliances almost disappear 1.500.000 1.000.000 500.000 Gas appliances ~1.75 M by 2050-20132014201520162017201820192020202120222023202420252026202720282029203020312032203320342035203620372038203920402041204220432044204520462047204820492050 Gas appliances Oil appliances Electric appliances Other Forecast extended in the 2018 study 17
Installed base of heating appliances What happens to gas appliances to 2030 - provisional results 3.500.000 Evolution of the installed base of GAS heating applainces in Flanders 2018 forecast 3.000.000 2.500.000 2.000.000 Small amount of low carbon gas by 2030 Appliance type Noncondensing Volume in 2030 Share of gas appliances 28,000 1% Condensing 1,756,000 87% 1.500.000 1.000.000 500.000 Non-condensing almost disappears by 2030 Low carbon gas 248,000 12% - 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 Gas boilers - low efficiency Gas boilers - high efficiency Lower carbon gas appliances 18
Installed base of heating appliances What happens to gas appliances to 2050 - provisional results 3.500.000 Evolution of the installed base of GAS heating applainces in Flanders 3.000.000 2.500.000 2.000.000 1.500.000 ~945,000 low carbon gas appliances by 2050 1.000.000 500.000 ~820,000 condensing gas boilers by 2050 - Gas boilers - low efficiency Gas boilers - high efficiency Lower carbon gas appliances Forecast extended in the 2018 study 19
Installed base of heating appliances What happens to gas appliances to 2050 - provisional results 2.500.000 Evolution of the installed base of GAS heating applainces in Flanders 2.000.000 Micro CHP / fuel cells 1.500.000 Gas heat pumps Hybrid heat pumps 1.000.000 500.000 Condensing gas boilers - Gas boilers - low efficiency Gas boilers - high efficiency Gas boiler 'plus' Hybrid heat pump gas boiler Gas heat pump Micro-CHP & fuel cells 20
Annual gas demand (GWh) Annual gas demand to 2030 in Flanders - provisional results 35.000 Annual gas demand in Flanders to 2030 by appliance type 30.000 25.000 ~19% reduction by 2030 20.000 15.000 10.000 Condensing gas boilers Other Micro-CHP & fuel cells Gas heat pump Hybrid heat pump gas boiler Gas boiler 'plus' Gas boiler high efficiency Gas boiler low efficiency 5.000-2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 21
Annual gas demand (GWh) Annual gas demand to 2050 in Flanders - provisional results 35.000 Annual gas demand in Flanders to 2050 by appliance type 30.000 25.000 20.000 15.000 10.000 5.000 Lower carbon gas appliances Condensing gas boilers ~30% reduction by 2050 Other Micro-CHP & fuel cells Gas heat pump Hybrid heat pump gas boiler Gas boiler 'plus' Gas boiler high efficiency Gas boiler low efficiency - 22
Next steps: Repeat forecasting for Brussels and Wallonia 23
Next steps: Commercial and industrial analysis Commercial heating Retail Education Private offices Public offices Hospitals Healthcare Hospitality Industrial process heat Chemicals Mineral products Basic metals Food and drink Car manufacturing Agriculture Paper and pulp Cement Glass 24
Questions? Contact: Stephen.Harkin@delta-ee.com 25