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This analysis, however, does not consider costs associated with the gas network maintenance. Also, the heat electrification scenarios proposed in this paper are based on the capacity available on the existing network. Upgrades and strengthening of the existing network to allow a higher share of electrified heat, or other types of electricity consumption such as electric vehicles, will require significant investment. However, if investments are required to either build new gas networks or to strengthen existing electricity infrastructure, it would seem obvious to favour the technology which can deliver lower carbon emissions from the outset. The main barrier to decarbonisation of the heating sector in general, and heat pump integration in particular is the absence of appropriate policy instruments. The only supporting mechanism in the Republic of Ireland is recently launched Renewable Heat Scheme (Element Energy, Frontier Economics, 2017). Northern Ireland does not have any renewable heat incentive mechanisms at the moment which probably means an insignificant rate of technology uptake. Energy storage systems have been significantly undervalued and only recently started to be recognised as a potential solution for the integration of variable renewables. Current government support is mainly focused on R&D programme funding, which means that more serious government commitment is required to support the integration of energy storage and to stimulate private investors (Renewable Energy Association, 2016). Moreover, despite the market reform taking place at the moment (EirGrid, 2016), incentives for demand side participants (especially at the domestic level) are missing. The potential benefits of thermal energy storage described in this paper are unlikely to be realised in the proposed market design. The only option for market participation is to make an agreement privately with retailers via some form of aggregation. Retailers, however, appear to be largely unenthusiastic about such contracts at the moment. 7 Conclusions In conclusion, electrification of the heating sector with heat pumps in a wind dominated market could bring significant environmental benefits in comparison with alternative heating methods. Energy storage systems would help in mitigating the impact on peak electricity demand and thereby further reduce the emissions impact, while simultaneously optimising market operation and network management. The electrification of 20% of domestic heating demand would add only circa 3% to the total yearly electricity sector CO2 emissions, if combined with energy storage. Alternative gas or oil heating would result in at least two and three times more CO2 emissions respectively. 13PDF Image | How heat pumps and thermal energy storage with wind power
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