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Figure 6– Heat supply marginal abatement cost curve. The counterfactual levelised cost is indicated by the grey line. In the future, as the carbon intensity of the grid and energy prices change, the benefits of each source in relation to each other and to the base case will also change. A ‘co-ordinated’13 scenario out to 2050 in which grid carbon factors reduce but energy prices rise is shown in Figure 7. Here all secondary sources show a significant improvement against the base case in environmental terms making even those at a higher cost (such as air source) more attractive in terms of carbon intensity. The ranking in terms of cost remains similar except for electrical transformer and building HVAC heat rejection. These have become cheaper compared to other sources because of their particularly high ratios of infrastructure to lifetime energy costs caused by their low load factors and relatively high source temperatures. This means that they are less sensitive to inflation in energy prices despite requiring a greater capital investment. A trade-off is required between high infrastructure costs and high heat pump energy costs, based on an assessment of energy price inflation. 13 A co-ordinated scenario assumes a combination of national and regional actions encourage infrastructure investment and development. Good levels of retrofit reduce the overall heat demand of the London building stock. DECC central projections (DECC (2012) Updated Energy & Emissions Projections, Annex F) have been used for energy prices. A maximum heat network penetration of 70% has been modelled and it is assumed that hot water demand can be supplied from secondary heat networks. 16PDF Image | LONDONS ZERO CARBON ENERGY RESOURCE Secondary Heat
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