Technico-Economic Analysis of Building Retrofit on Power Systems

Abstract

Germany’s 2045 climate-neutrality target requires coordinated decarbonisation of electricity supply and residential heating. This thesis quantifies how building-envelope retrofit interacts with heat-pump electrification in Germany using the open-source PyPSA-Eur sector-coupled capacity-expansion model at 5-node, 3-hour resolution under a 2050 net-zero target. Eight sce-narios combine retrofit and heat-pump deployment across heat-demand reductions of 15%, 29%, and 45%, with additional smart heat-pump control sensitivities. A post-processing cost-benefit framework combines modelled power-system savings with retrofit investment costs and secondary value streams. For reproducibility, a GitHub repository is included, which provides clean code, scenario outputs, thesis plots, and replication results. The results show that each percentage point of heat-demand reduction lowers German power-system costs by approxi-mately €0.5 bn/yr, with no diminishing returns up to 45%. Under conservative accounting, the campaign-period optimum occurs at 1%/yr renovation, yielding €3.1 bn/yr net benefit and a benefit to cost ratio of 1.37, while the 2%/yr EU target is net-negative during the campaign period but becomes positive under extended lifetime accounting. Retrofit also reduces the grid-flexibility value of heat pumps, with peak smoothing falling from 20.7% at baseline to 1.4% under deep retrofit. Smart heat-pump control cuts system costs by 25% (€17 bn/yr), although benefits diminish after initial thermal-mass smoothing. Heat pumps are cost-optimal at 69–81% share across all scenarios, suggesting that boiler bans reinforce, rather than drive, the main system-cost outcome. The thesis recommends a 2%/yr renovation target combined with retrofit cost-reduction policies and mandatory smart heat-pump control standards.