Smart heating, apps & co.: Does digitalization in the energy sector benefit climate protection?

Using weather forecasts to control heating systems, monitor the efficiency of heating appliances or record electricity consumption smartly: Digitization in the energy sector promises opportunities to save greenhouse gases. But to what extent can it really contribute to climate protection? A new study has used five case studies to assess how smart solutions in buildings and households affect energy and climate protection targets and what their environmental impacts are. The researchers from the Institute for Ecological Economy Research (IÖW) and co2online show that such digital applications can usefully supplement important climate protection measures such as the energy-efficient refurbishment of buildings or the expansion of renewable energies, but cannot replace them due to limited savings potential. The project “Climate Protection Potentials of Digitalization” was carried out on behalf of the Federal Environment Agency.

The researchers have developed a transferable methodology for the environmental assessment of digitalization in the energy end-customer market and applied it in selected case studies on heat and electricity in residential buildings and households. Among them: the control of heating systems via weather forecasts as well as online efficiency monitoring of heating systems, digital recording of electricity consumption via smart meters with a feedback system, or tools to help operate heat pumps and electric charging stations in such a way that they serve the power grid.

The research team compared the direct environmental effects of such smart technologies – such as their production, use and disposal – with the indirect effects, such as an increased use of renewable energies or an increase in energy efficiency, as well as user-related and electricity market effects. The assessment was carried out using the established method of life cycle assessment and a systematic classification of the potentially occurring environmental impacts.

Climate protection potential by 2030: available, but low

The results show that smart energy solutions for households can contribute to climate protection. In this way, the environment can benefit from the optimization and monitoring of heating systems, as the positive effects from the heating energy saved are significantly greater than the environmental impact of building and operating the digital tools. Applications that require customers to take action themselves are more difficult to evaluate. A smart meter, for example, analyzes a household’s electricity consumption and provides tips on how to save electricity via an app. There is still little knowledge available here on medium-term savings effects. Nevertheless, it appears that the potential environmental opportunities tend to be greater than the environmental risks. However, it is important not to overestimate the potential, the researchers emphasize.

“Extrapolated to the whole of Germany, the emissions savings of the solutions studied, combined with their current market growth, can only make a small contribution to the 2030 climate protection targets,” summarizes Hannes Bluhm, an expert in environmental assessments at the Institute for Ecological Economy Research. The tools studied can only contribute between 0.07 and 0.21 percent of the 113 million tons of CO2 that the energy industry needs to save by 2030.

Even if digital solutions are not the central lever for climate protection in buildings, they could still be implemented as predominantly low-investment measures in the short or medium term. The smart control of heating systems, for example, can on the one hand contribute to a relevant reduction in buildings that are still uninsulated and on the other hand achieve a few additional percentage points of savings even in well-insulated buildings. “Digitalization can be a useful complement to the necessary renovation measures and the switch to renewable energies in the building sector. In order to achieve climate neutrality in the building sector, the use of appropriate applications is even a prerequisite,” says Laurenz Hermann of co2online.

Recommendations for policy and practice

Since most smart solutions have only been on the market for a few years, there is often a lack of independent, scientific evaluation of their impact and potential. Therefore, the research team recommends a broader investigation in field studies that demonstrate and validate the ecological impact of appropriate applications.

In addition, technology providers and market players should develop common standards so that digital applications do not require costly retrofits and can be managed independently of individual providers. It is also essential that new technologies are always accompanied by appropriate qualification of those responsible for sales and installation. “For applications to become widespread, viable business models are needed, which are often dependent on the design of the relevant legal framework, including the level of existing taxes, levies and charges in the energy sector,” says Professor Matthias Knauff, who examined the cases studied from a legal perspective. Here, the new federal government is called upon to review these for their climate policy impact and, if necessary, to establish funding instruments.

Download the publication of the Federal Environment Agency: Potentials of digitalization for the reduction of greenhouse gas emissions in the energy sector