In theory, electrification sounds simple.
Homes and commercial buildings are responsible for almost 30 percent of annual U.S. greenhouse gas emissions, largely due to the burning of natural gas or fuel oil for heating. Convert furnaces and water heaters to electricity to run off a power grid that generates virtually no greenhouse gases — as the Biden administration is pushing — and you’ve just made a substantial dent in America’s carbon footprint.
But once it comes to actually constructing or converting buildings to run only on electricity, it starts to get complicated. Shifting from natural gas or fuel oil not only entails large upfront costs, but it is also likely to require more electricity and a significant expansion of power grids, making both homebuilders and politicians increasingly wary of electrification.
Eric Larson, a research engineer at Princeton University, recently studied the costs of electrifying the U.S. economy. While all-electric homes over time would cost about the same as standard homes — due to lower monthly energy bills — there would be an upfront sticker shock.
“If you look at the costs on an annualized basis, electric homes are not much different than what we’ve spent historically. They might even be less,” he said. “The big difference is a lot of the spending is capital, not operating costs, so you have to have that money mobilized at the start.”
Electrification has come to the forefront of the climate debate. Towns and cities around the country are seeking to shift residential and commercial buildings from the natural gas and fuel oil as heat waves, wildfires and flooding forecast the consequences of global warming.
Officials in New York, Seattle and San Francisco are in the process of enacting mandates requiring new homes and buildings to use electric heating systems, two years after Berkeley, Calif. became the first city in America to ban natural gas hookups on new construction.
Tough pill
For constructions firm or homeowners, the prospect of spending thousands of dollars more on a house on the promise of future energy savings and lower emissions could be a tough pill to swallow, especially in colder regions where those costs are likely to run much higher.
Already, Louisiana, Oklahoma, Tennessee and Arizona have passed law blocking cities from banning natural gas hookups. British Prime Minister Boris Johnson said last month he was considering delaying a national ban on gas furnaces, set to begin in 2035, due to cost concerns.
In Washington, not only are oil and gas companies campaigning against forced electrification, but also contractors. The National Association of Home Builders, one of the country’s most powerful lobbying groups, said it opposes any mandate that doesn’t include substantial subsidies for construction — a prospect that could cost the federal government tens of billions of dollars a year.
The builders’ group estimates the costs of building an electric home run up to $15,000 more than a standard home with gas heating.
“It’s easy to write a paper and say switch A for B, but once you dig in you realize it’s not so simple,” said Vladimir Kochkin, director of codes and standards at the National Association of Home Builders. “Our members have to build these houses and ultimately sell them.”
With the United Nations International Panel on Climate Change warning the planet needs to cut emissions to net zero by mid-century to avoid devastating consequences of climate change, higher construction costs could be the least of government’s worries.
“The climate science tells us we have to decarbonize half the building stock by 2030. Gas boilers are not an option,” said Stephanie Greene, a senior principal at the Rocky Mountain Institute, a Colorado organization that advocates for climate action.
Greene recently worked on a study examining the costs of electrification in four American cities, split between warm and cold climates. In Houston, researchers reported, switching to an all-electric heating system would save homeowners $2,400 over 15 years compared to replacing existing natural gas or heating oil systems. In Chicago, homeowners would save about $100 over that period.
Seasonal adjustments
The dramatic difference in savings underscores another challenge to electrification. Most experts agree that electric heating systems are a good option in milder climates like Texas and California, but many are unsure how efficiently they work in the colder regions of the Midwest and Northeast.
Mark Griffith, a senior research director with the consulting firm IHS Markit, said with current technology, homes in cold weather regions would consume huge amounts of electricity for heating, requiring not only more efficient and expensive home heating equipment but also a greatly expanded power grid to meet the new demand.
“The power grid would have to be reimagined. Right now, electricity demand tends to peak late in the afternoon in the summer and now you’re going to move it just before dawn in the winter,” he said. “From a political perspective, it’s easy to say electricity everything, but people will find electrifying everything is not going to be the optimal strategy.”
One alternative would be to convert gas heating systems to hydrogen, relying on the existing network of natural gas pipelines underlying cities around the world. The British gas firm Northern Gas Networks is setting up a gas to hydrogen demonstration project in northern England, with hopes of getting their entire system converted by 2034.
But there is fierce debate on whether hydrogen is a cost-effective way to heat homes and buildings. Due to the corrosive properties of hydrogen, existing gas pipelines would need to be replaced. And while hydrogen is relatively cheap, producing it without emitting greenhouse gases is not.
In the Leeds project, for instance, the carbon dioxide from hydrogen production would be piped to the North Sea and stored in depleted offshore oil and gas fields.
Difficult decisions
Part of the challenge of cleanly heating homes and buildings, as with so much of climate adaptation, is the cost of the technology needed to do so is currently prohibitively expensive.
As the technologies enter mass production, costs are expected to come down. In the meantime, politicians are left to either gamble on which technologies hold the most promise, or wait and see which one proves superior, delaying reductions in emissions.
“Twenty years from now, you might have much more efficient electric heating systems or better energy storage. That’s great, but if you trying to look at the future practically, it makes for difficult decisions,” said Griffith. “We don’t know which necessarily are going to be the best technologies, and that’s hard for the political system.”
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