Concept development for a model-based assessment of the E1st Principle

This report aims to develop a methodological concept for a model-based analysis of the Energy Efficiency First (EE1st) principle for the EU-27 that iscarried out and analysed in subsequent reports of the ENEFIRST project. The objective of this energy system analysis is to investigate what level of demand and supply-side resources should be deployed to provide the greatest value to the EU's society in transitioning to net-zero GHG emissions for the building sector by 2050. On the demand side, the analysis focuses on the resource option of end-use energy efficiency in buildings, investigating the contributions of thermal retrofits, efficient appliances, and other measures towards the net-zero target. On the supply side, the analysis quantifies the possible deployment and costs of various generation, network and storage options for the provision of electricity, district heat and gas products for the building sector. By determining what resource portfolio should be adopted under given framework conditions to reach the 2050 target, this analysis can help decision-makers identify priorities for policy design and technology investment. The analysis covers a set of three model-based scenarios. Each of these scenarios is geared to reach the 2050 target of net-zero emissions in the EU-27. However, the scenarios differ in terms of the contribution of different resource options towards target achievement: (1) The LOWEFF scenario assumes that energy use in buildings is decarbonized primarily via the use of renewable-based supply-side resources. (2) The MEDIUMEFF scenario is characterized by an even deployment of demand- and supply-side resources. (3) In the HIGHEFF scenario, end-use energy efficiency measures in buildings are viewed as the most favourable decarbonisation option for the European energy system by 2050, representing a future in which the EE1st principle is comprehensively applied in energy system planning and investment. To capture the interactions between the building sector and the supply side of the EU energy system, this analysis couples four bottom-up energy models: INVERT, FORECAST, ENERTILE and NETHEAT. As such, the analysis features a comprehensive coverage of the major end-uses (space heating, water heating, space cooling, electrical appliances, lighting, cooking) in residential and non-residential buildings. On the supply side, operation and investment of both power and district heating systems are explicitly modelled. To measure the performance of the three scenarios, the outputs of the analysis are analysed in two respects. For one thing, the so-called techno-economic assessment focuses on the indicator of energy system costs, indicating the sum of capital expenditures and operating expenses needed to meet the energy service demand in the building sector. Supported by additional indicators, this assessment helps determine the extent to which society is better off – in pure monetary and technical terms – if demand-side resource were prioritized in energy planning and operation. For another, the so-called socio-environmental assessment investigates selected multiple impacts of the resource configurations computed in the different scenarios. Where possible, these impacts are quantified and monetized using dedicated methodologies. In sum, this model-based analysis addresses the four criteria of quantitative assessments for the EE1st principle: (1) It features an integrated model-based appraisal of demand- and supply-side resources in the building sector and associated supply sectors (electricity, district heat, natural gas and hydrogen). (2) There is a common planning and policy objective across all scenarios of reaching net-zero GHG emissions for the EU building sector by the year 2050 while meeting demand for energy services. (3) All costs and benefits are evaluated from a societal perspective, rather than a private one. (4) A systematic appraisal framework is used to compile all relevant cost and benefit items, including a selection of multiple impacts.