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You may have heard the terms “all-electric building” or “sustainable buildings” and seen them associated with the notion that heat pumps decarbonize our planet. If you didn’t already know, heat pumps run off electricity. We recently released White Paper 504, Factoring Carbon Pricing into Business Decisions: A Building Heating Case Study, that takes an unbiased look at this topic. In short, we can definitively say that as global electricity generation becomes more renewable, heat pumps will help decarbonize our planet. According to the International Energy Agency (IEA), “When indirect emissions from upstream power generation are considered, buildings were responsible for 28% of global energy-related CO2 emissions in 2018.” This scale is why people think that heat pumps can make a big dent in CO2 emissions.

Analyzing the carbon footprint of commercial building heating systems

With that said, heat pumps may not be the best solution for the planet in the short term. The largest factor that decides whether a heat pump has a lower carbon footprint than a gas or oil furnace is the fuel mix used to generate electricity delivered to commercial and office buildings. We developed a commercial building heating model to analyze the carbon footprint and energy cost of different heating systems. We found that if the electricity delivered to your building is generated using a high percentage of fossil fuels like natural gas, the colder your climate is, the higher the likelihood that the heat pump will have a higher carbon footprint compared to a natural gas furnace. The “colder climate” phrase is a nod to the fact that as the average outdoor temperature drops, so does the efficiency of any heat pump.

Try the commercial building heating TradeOff Tool now >

For example, take a hypothetical building in Dubai that experiences very few hours of cold temperatures. If the electricity is generated with 100% coal, a water-source heat pump has a lower carbon footprint than a natural gas furnace. If all you do is change to a colder city like Hong Kong, the heat pump carbon footprint is still lower than the gas furnace. However, if you move the exact same building to San Francisco (colder), a gas furnace just slightly beats out the heat pump. Again, a colder climate means a lower heat pump efficiency.

Let’s take a real-life example. If you have a commercial building in West Virginia, where electricity generation is largely from coal (90%), a natural gas furnace heating system has a lower carbon footprint than a water-source heat pump. You can see the base assumptions in the TradeOff Tool.

Another factor to consider is heat pump maintenance in a commercial and office building – installing many smaller heat pumps in the ceiling will be more labor-intensive to maintain later, compared to fewer larger heat pumps. Ask facility management and they’ll likely vote for a natural gas roof top unit (RTU).

Some heat pump topologies are more efficient than others. An air-source heat pump is more dependent on the outdoor temperature than a geothermal heat pump. Water-side heat pumps are a much better option for a high-rise building than an air-source heat pump because they can use the condenser water riser as their heat source.

And, of course, there’s the issue of capital cost… there’s no question that heat pumps cost more than gas furnaces. We haven’t tackled this topic yet, but we have plans to analyze the total cost of ownership (and carbon footprint) of the heating and cooling system together because some heat pumps can play both roles (heater and air-conditioner).

For sustainable buildings, don’t rule out heat pumps

Now, having said all this, I wouldn’t bet against heat pumps. In writing our white paper, we struggled to find cities with documented electricity generation fuel mixes, with 90% or more from coal and oil. If you change the fossil fuel to natural gas, even over 90%, the water-source heat pump’s carbon footprint is lower than the natural gas furnace, in all but the coldest of climates. This is because the carbon footprint of natural gas is lower than coal and oil. The lesson here is, as you lower the carbon footprint of every kWh of electricity generated, the more likely it is that a heat pump will beat out its fossil-fueled competition. Here’s how the emissions stack up. Accounting for fuel extraction, processing, transportation, electricity generation, and electricity transmission, we estimate the following emission rates (per MWh of electricity generated) for these three fuels:

Coal              1,060 kg CO2e/MWh

Oil                   860 kg CO2e/MWh

Natural gas      620 kg CO2e/MWh

(Note: the carbon emissions from plant construction and decommission are insignificant and are therefore excluded from these values). The trend in global electricity generation is clearly toward lower carbon emissions. This will make it even harder for the most efficient natural gas systems to compete with any kind of heat pump. To be fair, fossil fuel heating systems are competing against a different heating system altogether. Whereas fossil fuel-based systems convert a fuel’s chemical energy into thermal energy, heat pumps don’t burn things to produce heat, they transfer (or pump) heat energy from a cold “source” (i.e. outdoors) to a hot source (i.e. inside a building). The bottom line is that generating heat is much more energy intensive than transferring heat.

The link to data centers, healthy buildings, and heat energy storage

A few closing thoughts… commercial buildings tend to have some amount of IT equipment in the form of small IT rooms (or even small data centers), which may allow water-source heat pumps to take advantage of this heat. This IT equipment produces a lot of heat, in fact, a 3kW IT rack (low relative to the average data center density of 5kW/rack) produces about 41 times more heat than a person (73 watts). IT equipment is cooled year-round. Where does the heat from this IT equipment go? It’s usually transferred to the condenser water riser we mentioned above. If you have a water-source heat pump, it can essentially transfer the IT equipment heat (from the condenser water) to heating coils throughout the building. This is a lot better than rejecting the IT heat to the outdoors during the winter months and makes for a more sustainable building. As a side note, switching to electric heat pumps brings you closer to a healthy building since you avoid the potential for carbon monoxide and other particles of combustion getting into the building’s air supply.

Finally, on a forward-looking note, I can see heat pumps used to help balance the supply and demand of renewable energy. The better insulated a building is, the longer it can hold the heat energy transferred by heat pumps. When there is excess renewable energy supply, heat pumps can run to heat a building, at a lower electricity rate. And when the renewable energy supply is low, heat pumps can remain off for a longer period.

White Paper 504, Factoring Carbon Pricing into Business Decisions: A Building Heating Case Study, discusses this topic in more detail and explains the importance of carbon pricing to business decisions for commercial buildings. This and over 200 other white papers are largely written by members of Schneider Electric’s Science Center. We’re a small group of research analysts with a mission to research and simplify pertinent topics for our customers.

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