1. Introduction
The European Union (EU) aims to reduce CO
2 emissions by 80% compared to 1990 levels by the year 2050 [
1]. The EU recognizes electrification of heating through heat pumps as one key step towards decarbonization [
2]. Since buildings are responsible for 40% of EU’s energy demand and emissions, the Energy Performance of Buildings Directive (EPBD) was created to reduce emissions caused by the operation of future buildings [
3]. However, despite tightening regulation of new buildings, the existing energy-inefficient building stock that has mostly been built before modern regulations remains the biggest source of building-based emissions. To tackle this issue, the EU has called for national retrofit strategies to effect a positive change in the existing buildings as well [
4]. Finnish building code also requires the consideration of energy efficiency whenever renovation tasks are performed on buildings [
5]. This is important, as 79% of Finnish buildings have been built before the year 2000 [
6] and certain mandatory renovation work provides a chance for lower cost energy efficiency improvements as well.
The influence of building retrofits on energy demand has been examined in many studies. The case of various Italian building types was examined in [
7]. The results show the cost-effectiveness of different levels of energy efficiency, showing that energy consumption in single-family houses could go down by up to 77%. Similarly, the energy saving potential in Swedish detached houses was found to be 65–75% in [
8]. Here the focus was on standardized buildings built between the years 1961 and 1980, increasing the usability of the suggested actions. Four reference buildings from different regions were dynamically simulated in IDA-ICE, which is a multi-zone simulation tool for evaluating indoor thermal conditions and building energy consumption. Retrofit measures were added step-by-step based on their prevalence in real life, until the energy efficiency matched passive houses. In Ireland, deep energy retrofits in semi-detached houses were only feasible with government grants [
9]. This study used six different environmental indicators and included the environmental impact of the materials needed for retrofitting in addition to the operational impact. Thirty-five pre-determined retrofit packages were calculated using quasi-steady state equations in the DEAP software, a web-based tool for producing Building Energy Ratings. In the Finnish context, energy retrofits have been examined for apartment buildings [
10,
11], where both primary energy demand and CO
2 emissions could be significantly reduced cost-effectively, especially using heat pumps, but also including improvements to the building envelope. In Finnish office buildings CO
2 emissions could be cost-effectively reduced by 50% while preserving thermal comfort [
12]. In Finnish detached houses [
13] life cycle costs and CO
2 emissions could be most effectively lowered by deep energy retrofits in buildings with direct electric or oil-based heating. In these studies, dynamic simulation with IDA-ICE was combined with multi-objective optimization by a genetic algorithm, to go through hundreds of retrofit packages. Heat pumps in particular stand out as a good heating solution for the future [
14]. As heating demand is increasingly met with electricity, short term fluctuations in electric power use can be expected to increase. However, all these studies have reported their results only on an annual level, leaving the seasonal changes unknown and providing no information about the peak power levels on short timescales.
The power levels in shorter time scales are important for the development of the energy generation infrastructure, especially as the share of undispatchable renewable energy increases. Investments into new power plants are based on capacity-based costs and the variable energy prices [
15], which are again influenced by the instantaneous power demand and the available energy generation capacity. Increase of peak power demand may call for increased investments to power transmission lines [
16] or to demand response services which are used to shift peak demand to lower load hours [
17]. Strategies for reducing peak demand under uncertain loads are being developed such as in [
18], which highlights the importance of energy flexibility in buildings. Important strategies include the price mechanism effect on occupant’s behavior, centralized energy management with demand response and HVAC peak load controls. A review on power system planning studies concluded that when modelling the power grid, smaller details such as heating systems should also be taken into account [
19]. On the building side, a Norwegian study did report some monthly results on the deep retrofit of apartment buildings [
20], though the main goal was to show the feasibility of evaluating retrofits using only the hottest and coldest months. A Spanish study showed the monthly renewable energy use and changes in peak demand after building retrofits [
21]. Peak power demand reduction was also the focus of a study made for Dubai’s cooling dominated climate [
22]. Hourly power demand after building retrofits has been reported for Finnish apartment buildings [
23], but a similar study on detached houses was not found. In many studies on building energy retrofits, heat pumps have been presented as the lowest emission heating solution. This is to be expected as there is a lot of low emission electricity generation in the Nordic countries, such wind power (Denmark and Sweden), nuclear power (Finland and Sweden), and hydro power (Finland, Norway, and Sweden) [
24]. However, in a Sweden-based study on building retrofits, new heat pump systems were assumed to increase the total electricity use, thus forcing the use of high emission fossil fuel sources, under the assumption that all existing low emission generation is already in use [
25]. This raises the question of whether the demand in other buildings could be reduced to make the existing supply of low emission electricity to stretch further or if the benefits of heat pumps have been exaggerated.
Many articles have been published on emission reduction and energy efficiency improvements in different building types. However, typically only annual changes to emission levels or energy consumption are reported, while few retrofit studies focus on the potential effects on the grid. In this paper, the changes in power levels of Finnish detached houses with different heating systems are examined individually and on the building stock level. The studied scenarios are based on previously optimized emission reducing configurations. The key questions are: What is the impact of deep energy retrofit on the seasonal and peak district heating and electric power demand of Finnish detached houses? How does the excess solar electricity generation of optimized building configurations compare to the hourly demand? What is the potential impact of large-scale building retrofits and electrification of heating on the electric power requirements of the whole detached house building stock?
4. Discussion
Air-to-air or ground-source heat pumps were utilized in all optimal retrofit solutions. Thus, some buildings will increase their electric power demands on the grid. Other studies have therefore assumed that new heat pumps cannot use the average low-emission electricity of the grid and would instead need to utilize the marginal production that is typically high emission coal generation [
25]. However, the issue can be bypassed if the existing loads are lowered at the same time as new ones are added. This was the case in this study on the building stock level. New heat pumps increased electricity demand in the retrofitted wood heated or district heated buildings, but this was offset by the same solutions (heat pumps and envelope improvements) reducing electricity demand in the most power intensive buildings that were heated directly with electric radiators or electric boilers.
The optimization of retrofit solutions favored very large PV systems (4400 MW
p and 5600 MW
p) for the scenarios aiming for the largest emission reduction. However, the majority of the solar electricity generated by the oversized systems could not be used at the buildings and had to be exported to the grid. The maximum power levels of the exports were several times larger than the peak power demand in building without electric main heating systems. In those cases, the high-power requirement of the solar arrays could be a problem for the distribution grid, if it is not designed to handle such power. However, in electrically heated buildings the peak winter demand was on a similar level as the exports and the grid would presumably be able to handle the loads. However, a study on integration of variable renewables in the Finnish grid estimated that more than 1100 MW
p of solar electricity would decrease wind energy integration potential and significantly increase costs [
39]. This shows the need for an additional study that looks at the building stock in more detail, while also including the effects of the national power grid and international transfers through the Nordic electricity market.
With the large amounts of excess solar energy going to the grid, the electricity spot price would likely drop. Solar electricity is produced in all buildings at the same time, so with enough excess power the price could go to zero or even to negative values. This would influence the LCC of the building retrofits, by lowering the lifetime value of solar electricity generation. Thus, if large scale retrofitting was done, the cost-optimal PV array size would go down. To avoid this, more ways to use the electricity are needed. Communities could use seasonal thermal energy storage to shift the use of electricity in summer to meet heating needs in winter. For example, solar electricity combined with borehole thermal energy storage for Finnish conditions was examined in [
40]. Typically, demand response and short-term thermal energy storage in water tanks is also useful for increasing the value of solar electricity [
41,
42], but in the retrofit cases of the current study, solar thermal collectors were also included and handled most of the heating demand in summer. District heating could be produced with heat pumps [
43]. Totally new uses for electricity are likely to appear. For example, the number of new electric car registrations in Finland has almost tripled in a year, though the absolute numbers are still low [
44]. Other uses for excess electricity are in the energy intensive Finnish industry [
45] or synthetic fuel production (also known as power-to-X) [
46].
When GSHP was utilized, the annual peak electricity demand was significantly lower for the retrofit B cases than the original or retrofit D cases. This was due to higher heat pump thermal power capacity relative to the heating demand. When the heat pumps were sized to 60% or so of peak demand, electric backup heaters saw more use. Sizing the heat pump to above 90% made the peak electricity demand drop, also making the daily variance in demand smaller. This helps in sizing the electricity distribution infrastructure and designing energy storage systems. It is easier to optimize an energy storage system for power or energy capacity compared to having to maximize both.
The energy demand data for all the buildings were obtained through simulation. While dynamic simulation with IDA-ICE has been shown to be accurate, the results are sensitive to the background assumptions. Different age classes of single-family houses were modelled, but the shape and size of the basic building was the same for every case. The results could be different for smaller houses. In addition, only the southern climate zone of Finland was used for weather input data, creating a southern bias in the data. Further north, heating demand would be higher while solar energy generation would suffer. However, the majority of houses are located in the southern zone. Doing detailed calculations for two more climate zones would have tripled the number of cases and the need for time-consuming optimization. The results were obtained using the Test Reference Year 2012. Since building retrofitting is a long-term investment, climate change can influence the energy demand of the buildings during the lifetime of the buildings, as we move towards the year 2050. Cooling demand was ignored in this study, but it could be that as air-to-air heat pumps become more common, people will start using them for cooling as well, even though the heat pumps were purchased mainly for reducing heating expenses. This would increase the electric loads during summer, though this increase could mostly be mitigated by the increased amount of solar power.
The changes in the building stock were accounted for in a simplistic way, assuming all buildings are immediately retrofitted. In practice, many buildings in regions with declining populations and house values would likely not be retrofitted, due to the resident’s unwillingness to do long-term investments. A separate study is needed to calculate more feasible retrofit pathways, taking into account that change happens gradually and that new buildings are added while some old buildings are completely torn down. No flexibility or demand response methods were utilized, which removes the balancing element that appears when a large amount of buildings with different use profiles and energy storage systems are combined. In practice, on the building stock level, the peak power demand could thus be expected to be lower than in the cases presented in this study. The houses were assumed to be oriented south for solar energy purposes. In practice, some buildings are oriented badly, receive a lot of shading or are otherwise not suitable for solar energy installations. Thus, only a fraction of houses would be feasible for solar energy production.
There is uncertainty in the heating systems in use in the current building stock. Building owners do not always report changes to their heating system, such as when replacing an oil boiler with a heat pump. Some wood-heated buildings might actually use wood only as a backup energy source, while others use it as the main heat source. Thus, the real distribution of heating systems is not known. Possible changes to the electricity use of equipment and appliances in the buildings were not considered in the study. On the one hand, old appliances are gradually upgraded into more energy-efficient devices, which should reduce electricity consumption, but on the other hand, people are adding new electricity consuming equipment, which increases power demand. These trends could have an influence on the heating demand of buildings in the future through the excess heat they release.
5. Conclusions
Analyzing the hourly power demand of buildings helps in planning future generation capacity and backup and energy storage investments. The hourly heating and electric power demand of the Finnish detached house building stock was simulated using four different age categories of buildings, four different main heating systems and three levels of energy performance (reference, low cost retrofit D, and high impact retrofit B). Energy retrofits to improve energy efficiency had a significant effect on the peak and average power demand in all examined buildings. The main contribution of this paper was to show the power demand distribution before and after retrofits. Typically retrofit studies only show the effects of retrofits on the annual level, but this study presented the seasonal changes in power demand, to better understand what additional changes to the energy system are needed inside and outside the building sector. Another important contribution was the presented estimate of the net change in power demand in the building stock level if large-scale building energy retrofits are done.
The lower emissions of electricity compared to on-site boilers or district heating favor electrification of heating, through the use air-source heat pumps. This resulted in increased electricity demand in buildings with district heating or on-site wood boilers. At retrofit level B, the peak power demand of these building rose by 60 to 70%, but the absolute impact was low. On the other hand, buildings with direct electric heating significantly lowered their demand through the retrofits (peak demand down by 27 to 40% in retrofit B), as did buildings with ground-source heat pumps (peak demand down by 36 to 68%), with significant absolute impact.
These effects were combined in scenarios where all single-family houses of the whole building stock were retrofitted, which resulted in a net decrease in annual electricity use, −11% for low cost retrofits (scenario D), and −38% for high impact retrofits (scenario B). On the building stock level, peak power demand increased by 19% for low cost retrofits, but remained unchanged for the combined high impact retrofits. However, it is not likely that all buildings could be retrofitted in the same way in practice, due to both social and technical issues related to different conditions in each building.
The optimal solar electricity generation capacity on the individual building level was high. When the individual optima were utilized in the whole building stock, the peak excess power of solar electricity was 3.5 GW for the low cost retrofit scenario and 5 GW for the high impact retrofit. Such high values for unnecessary power generation could be difficult for the grid to handle. Such a scenario is also sensitive to price assumptions and might not be feasible if increasing excess production were to reduce solar energy value. This calls for further research on the optimization of individual building retrofits together with the power system as a whole. Future studies need to combine the changes in buildings and conventional power sector, as well as include new potential ways to use the available renewable energy. Seasonal thermal energy storage could be one way to solve the problem of overproduction, along with electric cars and power-to-X technologies.
Retrofitting old detached houses in Finland can reduce emissions significantly by improving thermal insulation values and by utilizing electrified heating with air-source or ground-source heat pumps. Fears of increasing the marginal electricity demand seem to be unfounded. While the amount of heat pumps is increased, reducing the energy demand in buildings with direct electric heating can prevent both the total electricity demand and peak power demand from rising at the building stock level. This bodes well for major retrofit projects based on electrification of the heating market. However, more accurate modelling of the building stock is needed. A future study should consider how the Finnish building stock could realistically be retrofitted, taking into account both the addition and removal of buildings as well as regional trends in population and economic activity.