Energy Transition

We need to rethink the way we heat ourselves. Here's why

Smoke rises from the chimneys of houses during sunrise in Slavonski Brod, Croatia February 11, 2016

Half the energy we consume is used to heat our homes and industries Image: REUTERS/Darrin Zammit Lupi

Gerard Reid
Founder and Partner, Alexa Capital
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Decarbonizing Energy

Half of our total energy consumption globally is used for the production of heat - for our homes, industrial purposes other applications. Most of this heat comes from the burning of fossil fuels such as coal, and is responsible for a significant proportion of world pollution.

However, to-date we have seen very little progress across the world in cleaning up how we generate heat - despite the existence of more sustainable and cost-effective solutions. A major reason for this is that the heating systems we have built across much of the world are both costly and troublesome to change, and there are whole piles of government incentives that favour fossil-fueled alternatives. That said, there are lots of environmental pressures which are forcing change - starting with air quality in cities like Beijing and Delhi, as well as global pressures to decarbonise.

Heat’s complexities begin with its physics. Heat is all about the flow of energy and works in three different ways: by convection, by conduction and by radiation. Heat is also governed by two important scientific laws; the first and second laws of thermodynamics. The first law states that energy can not be created or destroyed but just goes from one form to another; the second law states that it is impossible to convert one form of energy to another without some form of heat loss. Some of the greatest losses occur when oil and gas are converted from chemical to heat energy to power an internal combustion engine or a turbine. It is thus critical to either reduce the level of waste heat or to capture that heat for other purposes.

There exists huge scope for greater efficiency in the way we recover and use waste heat in Europe
There exists huge scope for greater efficiency in the way we recover and use waste heat in Europe Image: Waste Heat

There are many ways to reduce waste heat such as building better-insulated buildings or increasing the efficiency of engines. Another way is to capture and use the waste heat for other purposes such as heating hot water, which can then be used locally in a district heating system. Such systems are costly and take time to build - however, the digitalization of our world is providing us with a massive opportunity to rethink heat, and where we get it from.

Dublin might be a good place to start. In recent years, electricity demand in the Irish capital has exploded thanks to the growth in data centres built there by the likes of Microsoft, Amazon, Facebook and Google. Although it’s true that most of that electricity is used to keep those data centres cool, rather than to heat them up, the cooling process nevertheless generates large amounts of waste heat, which is then pumped out into the Irish air. It would make much more sense to use that heat; for instance, for growing food in glasshouses or for heating buildings. In the coming years the amount of data centres that will be built is enormous. This is a unique opportunity not just for Dublin but for much of the world to build new and more sustainable heating systems around these new power guzzlers.

The biggest step change in heating would be in moving away from traditional domestic heating systems - in which most of the heat is lost through the chimney - towards electrical heating systems such as infrared, which are three to four times more efficient. Combine such an electrical heating system with a heat pump and you have an almost perfect system that can also be used to provide cooling in summer.

However, government regulations can hold countries back from using the most sustainable solution.In Europe, for example, many countries such as Ireland, the UK and Germany use gas and oil for heating purposes. They do so because the incentive structures favour these fossil fuels. So, for instance, where I live, outside of Berlin, heating oil costs 8 cents per kWh, gas costs 7 cents per kWh, and electricity - which is more than 50% carbon-free - costs 30 cents per kWh.

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This difference is mainly due to government surcharges and taxes, and you might think these factors could be changed easily. But that is not the case; millions of household owners and voters already own a fossil-fuel heating system, and so any change in how energy is taxed - including a large carbon tax - would meet significant resistance. Unsurprisingly, NGOs tend to concentrate on fighting multinational oil companies or coal power stations, as the last thing they want to do is make an enemy of the end-consumer - which is why the environmental cost of heating our homes and industries is likely to remain the ‘elephant in the room’ that everyone ignores.

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