What is needed to phase out residential oil heating in Finnish single-family houses ?

Aira Hast (Corresponding Author), Tommi Ekholm, Sanna Syri

Research output: Contribution to journalArticleScientificpeer-review

5 Citations (Scopus)

Abstract

There are approximately 200,000 single-family houses heated with oil in Finland and the substitution of oil heating embodies significant carbon dioxide emission reduction potential in the residential sector. We analyze the economics of replacing oil heating with a ground source heat pump (GSHP) or a pellet heating from the consumers' perspective in alternative policy and oil price scenarios. We differentiated between cases where the oil burner is replaced in the end of its lifetime or before it. The results indicate that the level and uncertainty associated with future crude oil price are major factors in the profitability of replacement. If the international oil market price remains low, an early replacement is not likely to be economical for the consumer in Finland. Yet, with a recovering oil price even an early replacement can be optimal. If oil burner cannot be used anymore, it is in most scenarios economical to replace it with pellet or GSHP if some subsidy for heating renovation is available. Subsidies improve the profitability of both pellet and GSHP investments more than fuel taxation. Consumer discount rate also affects the results.
Original languageEnglish
Pages (from-to)49-62
JournalSustainable Cities and Society
Volume22
DOIs
Publication statusPublished - 2016
MoE publication typeA1 Journal article-refereed

Fingerprint

heat pump
oil price
Geothermal heat pumps
heating
Heating
oil
Oil burners
replacement
profitability
Profitability
subsidy
Finland
scenario
crude oil
Taxation
market price
renovation
discount rate
Oils
family

Keywords

  • consumer costs
  • Finland
  • replacement of oil heating
  • residential heating choice

Cite this

Hast, Aira ; Ekholm, Tommi ; Syri, Sanna. / What is needed to phase out residential oil heating in Finnish single-family houses ?. In: Sustainable Cities and Society. 2016 ; Vol. 22. pp. 49-62.
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What is needed to phase out residential oil heating in Finnish single-family houses ? / Hast, Aira (Corresponding Author); Ekholm, Tommi; Syri, Sanna.

In: Sustainable Cities and Society, Vol. 22, 2016, p. 49-62.

Research output: Contribution to journalArticleScientificpeer-review

TY - JOUR

T1 - What is needed to phase out residential oil heating in Finnish single-family houses ?

AU - Hast, Aira

AU - Ekholm, Tommi

AU - Syri, Sanna

PY - 2016

Y1 - 2016

N2 - There are approximately 200,000 single-family houses heated with oil in Finland and the substitution of oil heating embodies significant carbon dioxide emission reduction potential in the residential sector. We analyze the economics of replacing oil heating with a ground source heat pump (GSHP) or a pellet heating from the consumers' perspective in alternative policy and oil price scenarios. We differentiated between cases where the oil burner is replaced in the end of its lifetime or before it. The results indicate that the level and uncertainty associated with future crude oil price are major factors in the profitability of replacement. If the international oil market price remains low, an early replacement is not likely to be economical for the consumer in Finland. Yet, with a recovering oil price even an early replacement can be optimal. If oil burner cannot be used anymore, it is in most scenarios economical to replace it with pellet or GSHP if some subsidy for heating renovation is available. Subsidies improve the profitability of both pellet and GSHP investments more than fuel taxation. Consumer discount rate also affects the results.

AB - There are approximately 200,000 single-family houses heated with oil in Finland and the substitution of oil heating embodies significant carbon dioxide emission reduction potential in the residential sector. We analyze the economics of replacing oil heating with a ground source heat pump (GSHP) or a pellet heating from the consumers' perspective in alternative policy and oil price scenarios. We differentiated between cases where the oil burner is replaced in the end of its lifetime or before it. The results indicate that the level and uncertainty associated with future crude oil price are major factors in the profitability of replacement. If the international oil market price remains low, an early replacement is not likely to be economical for the consumer in Finland. Yet, with a recovering oil price even an early replacement can be optimal. If oil burner cannot be used anymore, it is in most scenarios economical to replace it with pellet or GSHP if some subsidy for heating renovation is available. Subsidies improve the profitability of both pellet and GSHP investments more than fuel taxation. Consumer discount rate also affects the results.

KW - consumer costs

KW - Finland

KW - replacement of oil heating

KW - residential heating choice

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JO - Sustainable Cities and Society

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SN - 2210-6707

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