Electrification: decarbonizing buildings through fuel switching

Electrification, also known as fuel switching, is the process by which technologies that use coal, oil and natural gas are replaced with those that draw energy from electricity, and it is becoming particularly prevalent with building decarbonization strategies.

With the world urgently needing to move to reduce emissions and tackle climate change, electrification (where the fuel source is solar or wind power) is considered by many to be part of the solution.

In this article, we will focus on fuel switching in the built environment. This largely refers to switching space and water heating from gas or propane-powered appliances to electric alternatives, such as heat pumps. And given that heating and cooling in the built environment account for more than one-third (link resides outside of ibm.com) of total building energy consumption in the US, it’s clear that fuel switching offers an enormous opportunity to slash carbon emissions and accelerate the race to net zero.

If your organization has buildings that are currently powered at least partially by fossil fuels, read on for information on switching to clean energy and the role of building optimization technology in improving energy efficiency at your buildings.

The need for electrification in building decarbonization

Most buildings already use electricity to power HVAC equipment, lighting and office spaces. This has been the case for many years, so why the need for electrification now?

Typically, electricity is not the only energy source used in buildings. Propane, natural gas or oil are often used to power water boilers, cookers and heating systems. This contributes to buildings being one of the biggest carbon polluters, with the built environment accounting for 40% of global carbon emissions. (link resides outside of ibm.com)

Switching to electricity as the primary energy source opens up opportunities to reach the last mile in the decarbonization of the built environment. For many organizations, electrifying heating and cooling will be one of the final steps they take on their net-zero journey. This is because before climate change emerged as a global issue, fossil fuels had become increasingly cheaper over the course of the 20^th Century, and many organizations became reliant on them for heating and cooling their buildings.

However, now commercially available electric technologies for heating and cooking have emerged, such as electric heat pumps, electric hot water heaters and electric stoves that can help achieve carbon neutrality.

Benefits of electrification

Carbon emissions from buildings can be reduced (link resides outside of ibm.com) through fuel switching from fossil fuels to electricity for residential or commercial building energy needs. Additionally, switching to electric heating and cooking technologies can have substantial air quality benefits. For instance, studies have revealed that cooking with gas can lead to high indoor levels of carbon monoxide and nitrogen dioxide and increase the risk of asthma.

How to start building decarbonization through fuel switching

Before you begin decarbonizing your building, it is a good idea to employ building optimization software. This will allow you to track energy consumption and emissions data, while also identifying exactly where efficiency improvements can be made to optimize the performance of your buildings.

Using intelligent software (such as IBM Envizi’s Decarbonization solution) that harnesses the power of advanced analytics, artificial intelligence (AI), the internet of things and sensor data will ensure that the process of electrification is data-driven and optimizes performance and energy efficiency, while causing minimal disruption and prolonging equipment lifespan. It will also enable you to easily monitor and report on your results.

Electrification, or fuel switching, involves replacing technologies that currently use gas with electric alternatives. The technology that delivers the biggest impact is heat pumps. Many buildings use gas-fired boilers for heating. This technology can be switched out for electrically powered heat pumps. Heat pumps work by drawing in heat from the air or ground outside when it is cold and expelling it indoors. The added benefit is they can also be used in reverse for air conditioning in warmer climates.

What countries have made progress with building decarbonization through electrification?

Around 30 cities and counties in the USA have introduced mandates to encourage or order that new buildings be powered solely by electricity, making this the norm for new construction.

Many of these municipalities are in California, where regulators have also approved USD 45 million of funding to install electric-powered water heaters by 2025. New York regulators have approved nearly USD 500 million for the same ends.

However, the United States still generates approximately 20% of its electricity from coal, and it did not sign the pledge to phase out coal at the United Nations climate summit in 2021.

In the UK, the government has pledged that it will install 600,000 heat pumps a year by 2028. It has set aside GBP 450 million to offer as subsidies for replacing existing gas boilers with heat pumps, although critics point out that this amount is only enough to fund 90,000 heat pumps.

Is there any opposition to electrification?

Unsurprisingly, opposition exists from natural gas companies, which have funded advocacy groups (link resides outside of ibm.com) to prevent electrification by attempting to stop all-electric building ordinances from being passed.

A study by the American Gas Association found that policies enforcing electrification in residential settings would be burdensome to both consumers and the economy, although there were questions from clean energy campaigners around the study’s assumptions.

Do I need to start fuel switching now?

If your organization owns a portfolio of commercial buildings, you should start the process of electrification now and look to further optimize equipment performance to support decarbonization targets. Even if regulations are not yet in place compelling you to do so, regulation seems likely. It is better to be ahead of the game than to find yourself left behind, potentially shouldering higher fuel costs for outdated technologies.

Fuel switching is one of the best solutions we have to reduce carbon emissions in the built environment, which is critical to solving the climate change conundrum. While there will be initial costs as you begin the transition, in the long run, electrification will almost certainly provide cost savings (while future-proofing your company against emerging legislation and higher building performance standards), and that’s good news for your bottom line and for the planet.