Efficiency, flexibility, and electrification can cut U.S. buildings sector emissions 91% and power system costs $107B annually by 2050

August 23, 2023

Building efficiency and electrification deliver half of buildings sector emissions reductions, with the other half attributable to power sector decarbonization

Achieving ambitious U.S. federal and state carbon reduction goals hinges on rapidly accelerating the adoption of climate change solutions across all sectors of the economy. To date, research and policy efforts have largely focused on expanding the supply of clean energy and the electrification of end uses, rather than a broader suite of solutions that includes improving the efficiency and flexibility of energy demand. But policy design has also been hampered by a lack of insight into how opportunities to reduce emissions from energy end uses – including in the buildings sector, which accounts for more than a third of U.S. energy-related CO2 emissions – are affected by the growth of clean energy in the power sector.

To fill this knowledge gap, Lawrence Berkeley National Laboratory and the Brattle Group announce a groundbreaking new study, Demand-side solutions in the US building sector could achieve deep emissions reductions while avoiding over $100 billion in power sector decarbonization costs, which provides a comprehensive analysis of building decarbonization solutions and how they complement the speed and scale of power sector decarbonization. The product of a multi-year collaboration, the study was recently published in the journal One Earth and will be presented by the authors in a free webinar on September 6, 2023 (see registration details below). The study website serves as an online hub for this paper and future related research, which supports complementary decarbonization analysis by the U.S. Department of Energy and other National Labs, as well as academic institutions and private sector entities.

Key findings

The study assesses multiple CO2 emissions reduction scenarios to 2050 for U.S. residential and commercial buildings, which consume about ¾ of all U.S. electricity and are among the largest sources of CO2 emissions across end-use sectors. The study’s methodology combines detailed bottom-up modeling of building decarbonization measures with long-run simulations of the U.S. power system to estimate the energy, environmental, and system cost impacts of the decarbonization scenarios considered in the analysis.

Considering a comprehensive portfolio of building energy efficiency, demand flexibility, and end-use electrification measures alongside a rapidly decarbonizing electricity supply, the authors find:

  • Up to a 91% reduction in 2050 building CO2 emissions below 2005 levels alongside substantial reductions in both final energy and electricity without adding to electricity use;
  • Up to nearly half of the sectoral emissions reductions come from building energy efficiency and the efficient electrification of end-uses, with the other half coming from grid decarbonization;
  • Envelope efficiency and HVAC and water heating equipment efficiency and electrification measures have the greatest impact;
  • Up to $107B per year in power system cost savings, which offsets a third of the incremental cost of achieving a zero-carbon power system by 2035;
  • Key enabling policies include promoting early building retrofits and aggressive building codes and appliance standards; and
  • Near-term policy efforts should focus on deploying building efficiency while enabling electrification; electrification delivers greater impacts over the longer term with gradual equipment replacement and greater grid decarbonization.

The figure below shows CO2 emissions reduction results from both demand- and supply-side measures for the U.S. buildings sector from 2022–2050 for the study’s three benchmark scenarios representing low, moderate, and high building decarbonization futures. Detailed building sector modeling in DOE’s Scout model was coupled with power sector modeling in gridSIM, the Brattle Group’s long-term power system simulation model which, in the aggressive scenario, assumes a decarbonized grid by 2035. 

Notably, the maximum long-term COemissions reduction depicted in the aggressive scenario requires steep reductions in building energy and emissions by 2030 – which is only possible if decision makers take significant actions to accelerate deployment of building energy efficiency, demand flexibility, and efficient electrification alongside aggressive grid decarbonization in the very near term, such as through the enactment of stronger building codes and appliance efficiency measures with parallel efforts to enable deployment and provide incentives for consumers and businesses to adopt low-carbon building technologies. Accelerated deployment of building decarbonization measures is also key to reducing the scale of required power system transformation under deep decarbonization pathways with high demand-side electrification, providing a crucial cost-containment mechanism for the expansion of clean energy that will enable broader economy-wide decarbonization.

The study’s modeling approach included hourly and annual representation of the energy demand impacts of more than 200 residential and commercial building measures across 25 grid regions in Scout, which provides a comprehensive, bottom-up representation of commercialized and emerging measures for building decarbonization and identifies policy-related drivers of building emissions reductions. The study also modeled a dozen scenarios of building and power sector decarbonization spanning a comprehensive range of parameters such as the rate of new building technology deployment, the pace and extent of reductions in grid emissions intensity, and the performance levels of available efficient and flexible technologies, among others. Brattle’s gridSIM model provided granular geographic representation of the U.S. power sector across the same 25 grid regions as the Scout modeling, while Brattle’s LoadFlex model performed hourly modeling of system impacts through 2050, including optimized dispatch of demand flexibility measures.

Webinar

September 6, 2023, 9:00am PT/12:00pm ET. Register here: https://lbnl.zoom.us/webinar/register/WN_uHyXws5oQde0LF194Yuvzg

We thank the U.S. Department of Energy’s Office of Energy Efficiency and Renewable Energy and Building Technologies Office for their support of this work.