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Research on electric heating system plan in northern region in winter based

on emission reduction and existing heating costs

F. LIN1，D. JIA2，X. SHI 3，Q. GAO4

1. State Grid Fujian Electric Power Co., LTD., Fuzhou, PRC 350003；2. State Grid
Energy Research Institute CO., LTD., Beijing, PRC 102209；3. State Grid Qingdao
Power Supply Company，Qingdao, PRC 266002； 4. State Grid Jiangsu Electric Power
Co., LTD.
China

SUMMARY

In recent years, serious haze weather appears frequently when it comes to winter heating
period in northern China, which has caused considerable damages to citizen health as well as
living environment. One of the main reasons is the using of coal as the main heating source.
The Chinese government has promoted to use clean energy to provide heating in northern
China, through using natural gas and electricity according to different circumstances, and
accelerating the process of increasing the usage proportion of clean energy in the heating
supply. The existing electric heating planning research mainly focuses on equipment selection
in specific heating project, the scheme design of the heating project, analyzing the project
economic efficiency and the subsidy demand analysis. Among them, the demand of subsidy
mainly relies on the financial support of the government, while the emission reduction is only
one part of the environmental benefit evaluation rather than the constraint conditions, which
leads to the absence of comparison among several heating methods over large areas.
This article has presented a method of electric heating planning in northern China based on
emission reduction and existing heating costs. 1) The growth trend of urban and rural building
heating area in northern China is predicted based on statistical data. 2) According to different
types of heating area statistics and sample research, the existing capacity in financial subsidies
of governments at different levels is estimated. 3) The gas supply capacity is predicted
according to the historical volume of natural gas consumption and structure combined with
the development of gas industry trend. 4) According to the installed power generation
capacity and its structure, together with the main industry electricity demand growth forecast,
winter heating electric supply capacity for northern China is forecast. 5) Based on the research
of production and sales of various types of heat pumps and the current situation of biomass
heating, the heating supply capacity in other forms is forecast. 6) Considering the current
environmental requirements, the cost of various types of heating facilities, the natural gas
supply capacity, the energy consumption prices like electricity and natural gas and
preferential tax, a model on the winter electric heating system plan in northern China is
jiadexiang71@163.com, jiadexiang@sgeri.sgcc.com.cn
constructed, which aims to improve the proportion of clean heating area, with the constrains
on meeting the heating demand and regional emission reduction targets, within the capacity of
various types of energy supply and all kinds of financial subsidies. 7) By using a typical city
as an example, based on the winter of 2015 electric heating data, the electric heating layout
scheme in 2016 is measured, and compared with the actual data of 2016 winter heating to test
the feasibility and rationality of the former method. 8) Using the proposed methods, the
development scale of main types of electricity heating, their electric consumption, heating
costs, subsidies demand and their share of fiscal subsidy capacity for the next 5 years are
given. 9) According to different types of the heating, the corresponding energy consumption
and their emission factors, the emission reduction that benefits from the plan is calculated.
The results show that the winter heating electric demand of northern China will reach 184.7
billion kW·h in 2021, with the new electric heating area of about 1.88 billion square meters.
Electric heating mainly includes decentralized electric heating, centralized thermal storage
electric heating and heat pump heating. Electric heating for the emission reduction effect of
densely populated areas is remarkable. Results of the research can provide decision reference
on clean winter heating to reduce air pollution for related governments and enterprise
deployments.

KEYWORDS

Electric heating, natural gas heating, heating demand, financial subsidy, emission reduction

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1 INTRODUCTION
In recent years, China's northern regions in the winter heating period have experienced frequent severe
hazing weather, causing serious impact on people's health and living environment. One of the main
reasons for the haze is the large use of scattered burning coal for heating purpose. With the
development of urbanization and the improvement of people's quality of life, the rigid heating demand
would grow rapidly in northern China in the upcoming decades, so as the importance of environmental
protection and ecological civilization. Therefore, winter clean heating is put on the agenda as an
important livelihood project. Chinese government has proposed to promote the adoption of clean
heating in northern China, through using natural gas and electricity according to different
circumstances.
Clean heating includes a variety of forms, such as coal or gas fired combined heat and power
generation (CHP) centralized heating, gas (boiler, wall furnace) heating, electric heating (electric
boilers, decentralized electric heating, heat pump), biomass fuel heating, solar heating etc. Electric
heating is getting more popular because of zero pollution, intelligence and comfort.
Domestic and international scholars have carried out extensive research on various forms of electric
heating planning. In the planning phase, paper [1] proposes a capacity planning model of phase
change thermal storage based on cooperation game. With the goal of maximizing coalition profit, the
capacity planning model considers curtailed wind power limit, heating supply constraint, and
technological constraints of phase change thermal storage. Twice profit distribution scheme based on
shapely value method is presented to build fair and reasonable profit allocation mechanism. In paper
[2], a general mathematical model including basic heating module, storage heating module and heat
accumulation module is established, and a flexible operation strategy is proposed to coordinate three
modules’ operation according to curtailed wind power. Then, based on the analysis of the wind power
curtailment characteristics, a mathematical model is developed to calculate the coal-saving
performance, national economy and the optimal configuration of the wind power heating project. After
the analysis of the average fixed cost, theoretical efficiency, security, and environmental protection,
paper [3] offers the technological innovation plan of electrically heated conducting oil boiler. Paper [4]
proposes an optimization model for replacing coal with electricity, using the goal of minimal total
annual cost and the constraints of coal consumption.
In the simulation of the clean heating planning, paper [5] forms CHP plant, wind farm and
photovoltaic redevelop in a certain heating region into virtual power Plant (VPP) as an interest whole.
The wind power heating equipment is introduced into VPP to realize the decoupling of heat and power
of CHP units. In paper [6], the electric boiler is added into the operation model of the system of VPP
and CHP to simulate four scenarios analysis when the direct conversion of wind powered heating is
realized. Paper [7-9] put forward the integrated operation model of heat storage facilities including
electric boilers, and consider the requirement of making full use of wind power heating. In paper [10],
a thermodynamic network model for the analysis of electric energy integrated system is established,
and the optimal operation model is proposed.
In the phase of policy and mechanism, paper [11] proposes a compatible hour-ahead trading
mechanism and corresponding settlement method. The economic benefits of surplus wind power
heating based on the proposed mechanism are analyzed and a criterion for feasibility is put forward.
Current research of electric heating planning mainly focuses on equipment selection, project design,
economic analysis and subsidy demand analysis. The subsidy demand mainly relies on the
government's additional financial support. The emission reduction is only regarded as the
environmental benefit assessment rather than the constraint condition, with a lacking of
comprehensive comparison of different methods over large areas.
This paper aims to increase the clean heating area to meet the heating needs, with the constrains on
regional emission reduction targets, all types of energy supply capacity, heating project operation
economy, various financial subsidy capacity, and heating reliability. Considering the application
condition of CHP centralized heating and electric heating, a planning method of electric heating based
on emission reduction and current heating cost is proposed. The research results can provide decision
reference on clean winter heating to reduce air pollution for related governments and enterprise
deployments.
2 METHODOLOGY
2.1 Objective function

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The main reason for eco-unfriendly bulk coal usage is the low cost. Although the electric heating has
no pollution, but its cost is usually higher. The main restricting factors for the development of clean
heating are the economy of large-scale clean heating project operation and the financial subsidy ability
of local governments. Therefore, to maximize the area of clean heating as the goal, the optimization
model is constructed as follows.
（1）
Among them, is the area of clean heating. is natural gas heating area, which is a function of
natural gas supply , natural gas heating project economy , and natural gas heating subsidy . is
the electric heating area, which is a function of electricity supply , economy of electric heating
project and subsidy of electric heating . is other clean heating area, which is a function of other
clean energy supply , economy of other heating project , and subsidy for other clean heating
projects . The decision variables are the development scale of all kinds of clean heating technologies
which affect clean heating area mainly through balancing the heating demand and the economy of
clean heating project.
2.2 Main constraint conditions
1) Heating demand balance constraint
（2）
Among them, is the total area of heating. is the CHP (coal or gas) centralized heating area.
is the bulk-coal decentralized heating area.
2) Environmental constraints
（3）
Among them, are the fuel consumption per unit area per heating season of gas heating,
CHP centralized heating, and the bulk-coal decentralized heating area respectively. are
the i type of pollutant emission factors per unit energy consumption of gas heating, CHP centralized
heating, and the bulk-coal decentralized heating area respectively. is the allowable emission limit of
category i environmental pollutant in heating industry, including sulfur compounds, nitrogen oxides,
particulate matter etc.
3) Heating subsidy constraint
（4）
Among them, is the annual maximum allocated government funding for clean heating
implementation.
4) Clean heating capacity constraints
（5）
（6）
（7）
are the maximum supply of natural gas, electricity and other clean energy per heating season
respectively.
5) Clean heating project operating economic constraints
（8）
（9）
（10）
Among them, is the net present value (NPV) of various types of clean heating projects,
including construction costs and operating costs. If the NPV of a clean heating project is negative, then
enough government subsidy is needed to continue the operation of the project.
6) The heating reliability constraint of the key area
（11）
are the heating loss of load probability (LOLP) and acceptable heating LOLP index of
region i respectively.

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 （12）
are the heating expected energy no supplied (EENS) and acceptable heating EENS
index of region i respectively.
（13）
（14）
is the area i equivalent load duration curve (ELDC). is the area i heating area. is the area
i maximum heating supply load, which is function of heating area. is heating equipment j (gas
boiler and electric boiler, etc.) capacity in area i. is the forced outage rate of heating equipment j. k
is the total number of heating equipment in area i.

（15）
is the calculation period for reliability indicators, such as 1 heating season. The detailed calculation
methods and procedures of LOLP and EENS are discussed in paper [12].
2.3 Analysis procedure
The planning of multi-area and multi-constrained multi-type heating equipment is a complex
optimization problem, which is difficult to solve theoretically. Based on the probabilistic production
simulation technology, this paper considers constrained conditions like local governments’ financial
subsidy ability and emission reduction, and discovers the rational regional electric heating planning
scheme.
1) Input basic data. Introduce heating demand data, such as the historical data of regional heating
area and heating demand, approved regional economic and social development planning data,
preliminary heating scheme data. Input existing and alternative heat source data, such as the capacity
of CHP, decentralized gas heating and electric heating equipment, the corresponding construction and
operation cost, and service life etc. Input comprehensive data, such as environmental emission
constraints, various types of historical clean heating subsidies data. Input calculation parameters, such
as planning cycle, reliability index, calculation termination criterion, etc.
2) Forecast the trend of urban and rural heating area growth in northern China based on the
statistical data. According to historical regional data of various types of building’s heating area,
heating demand data, and economic and social development planning data, considering the national
building energy conservation policy, adopting trend extrapolation method, method of building area per
capita, and method of heating index per built-up area, the regional building heating area and heating
demand are predicted. For a variety of prediction results, combined with expert experience, the
recommended prediction of regional building heating area and heating demand is selected, including
annual heating area, maximum load of heating demand, maximum load utilization hours, average load
demand capacity, load characteristics curve of heating for residents, public and commercial building
during planning period.
3) Estimate existing financial subsidy capacity of all levels of governments based on the census
data of heating area in different building types and sample study of subsidy analysis. Investigate
the household number of natural gas heating and electric heating, building types, average heating area
per household, heating prices, local natural gas and electric power average retail price. According to
the load forecast from step 2), calculate the real cost of natural gas heating and electric heating per unit
area of each heating season, considering energy utilization efficiency and using the method of thermal
equivalence. Lastly, based on regional heating area and its type, estimate governments’ current
subsidy capacity from the difference between real cost and nominal heating price.
4) Nature gas supply predication. According to the historical volume and structure of natural gas
consumption in the region, combined with the natural gas industry development trend, predicate the
supply capacity of natural gas for heating, including the total quantity of supply, daily average supply
and maximum supply, and peak regulation capacity of natural gas supply during the heating season.
5) Electric heating capacity prediction. According to the capacity and structure of electric power
generation in the region, the capacity of trans-provincial transmission lines and electric energy trading
result, combined with electric power and energy demand development in major industries, forecast the

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electric power supply for heating in winter, including electric energy consumption, maximum electric
load, typical daily electric peak and valley load variance of heating.
6) Other clean heating capacity forecast. According to the air source, ground source and other types
of heat pump production and sales research, heat pump economy, regional geothermal resources and
climatic conditions, predict the heat pump heating area. According to the regional biomass resources
collection and their cost, combined with the status of biomass heating, predict biomass heating
capacity.
7) Calculate the initial configuration of regional electric heating scheme. Based on the result from
step 2), such as heating area, maximum heating load demand capacity, maximum load utilization
hours in each year during the period of planning, apply formula (1) to maximize the clean heating area
as the goal, with constraints of heating needs, regional emission reduction targets, various types of
energy supply capacity, various financial subsidy capacity, and the economy of clean heating project.
According to the accepted error, apply commercial optimization software to form the initial plan of the
electric heating in the area.
8) Calculate the reliability of proposed regional heating plan. Based on the forecast of annual
regional heating demand capacity during planning period from step 2) and configuration scheme from
step 7), use formula (13)-(15) to calculate the reliability of the regional heating supply scheme.
9) Determine whether the regional heating reliability meets the requirements. If the requirement
is met, go to step 11). Otherwise, go to step 10).
10) Determine whether the alternative clean heating project capacity exceeds the limit of clean
heating supply capacity. If the upper limit is not exceeded, in the planning year when the reliability is
not satisfied, rank clean heating projects according to their economy of construction and operation,
and take it as a constraint condition of going into operation before the mentioned year in turn.
Otherwise, reduce environmental emissions constraints, and increase the number of coal-fired heating
projects. Go to step 7).
11) Output calculation results. Output electric heating configuration plan, construction cost,
operating cost during planning period, reliability, pollutant discharge, subsidy demand, clean heating
area and other data. The configuration plan includes regional heating area of electric boilers,
decentralized electric heating, heat pumps and their electricity consumption during the planning period.
12) Calculate the emission reduction benefit of electric heating. According to the electricity
consumption of electric heating during heating season, considering the energy utilization efficiency
and the regional heating energy consumption structure at the beginning of planning period, calculate
the corresponding fossil fuel consumption with the same thermal equivalent. According to the
environmental pollutant emission factor of per unit fossil energy heating consumption announced by
local environmental protection department, calculate the emission reduction benefit of the electric
heating planning.
3 CASE STUDY
3.1 Case 1
A city has continental climate, distinct seasons, and winter temperature on average of -4 - 5 ℃. The
land area is 12 thousand square kilometers. In 2015, the resident population is about 15.5 million.
Total heating area of the city is 560 million square meters, of which the area of centralized heating is
about 410 million square meters, and decentralized heating area is about 150 million square meters. In
decentralized heating, small boiler heating area takes about 17 million square meters, bulk coal heating
area about 120 million square meters, and electric heating area about 13 million square meters [13]. The
local electric power grid has a maximum electric load of about 13 GW. The natural gas supply for
heating is about 3 billion cubic meters. Based on the local regulations, the subsidy of natural gas user
for heating is 1RMB/cubic meters with a cap of 1200 cubic meters. For electric heating user, the
subsidy is 0.2 RMB/kWh with a cap of 8000 kWh. Heating equipment grading subsidies are on
average about 4000 RMB per household, and some of the equipment subsidies are slightly higher.

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Fig. 1 Growth rate of floor space completed in a city Fig. 2 Equivalent load duration curve of heating
Applying the model proposed in this paper and the optimization function in commercial optimization
software MATLAB, the calculation shows that the electricity consumption of the new built
decentralized electric heating, centralized heating of electric boiler with heat storage, and heat pump
heating in 2016 is 30 million kWh, 50 million kWh, and 250 million kWh respectively. The additional
electric heating area is 6.1828 million square meters. Electric heating subsidy increases 1.106 billion
RMB, in which the electricity consumption subsidy costs 76 million RMB, and heating equipment
subsidy costs 1.03 billion RMB. The unit heating area subsidy demand is about 178.81 RMB /square
meters and the heating reliability of electric heating area reaches 0.99, satisfying the local heating
reliability request.
With the increased subsidy, electric heating area is gradually increasing as well. But the growth rate is
gradually decreasing and the subsidy for unit heating area is increasing, which indicates that the
subsequent increase of the electric heating project is less economic viable. For instance, when the
subsidy reaches 1.151 billion RMB, the new electric heating area is about 6.3126 million square
meters, and the subsidy for unit heating area needs about 182.36 RMB /square meters. When the
subsidy reaches 1.215 billion RMB, the electric heating area is 6.4344 million square meters and the
unit heating area subsidy is 188.82 RMB /square meters.
The improvement of heating reliability is supported by increased subsidy and electric heating
equipment capacity. When subsidy reaches 1.047 billion RMB, electric heating capacity increases to
174.3 MW with the heating reliability of 0.984. When subsidy reaches 1.106 billion RMB, electric
heating capacity increases to 186.4 MW, and the heating reliability increases to 0.99. When the
subsidy reaches 1.151 billion RMB, electric heating capacity increases to 201.1 MW and the heating
reliability goes up to 0.991.
Tab. 1 Relations among electric heating configuration scheme, fiscal subsidy and heating reliability
Scheme 1 Scheme 2
DEH EBH HPH Total DEH EBH HPH Total
Heating energy 30 50 250 330 26 45 256 327
Heating capacity 37.4 49.4 99.6 186.4 32.0 41.1 101.2 174.3
Heating area 557.6 882.3 4742.9 6182.8 475.8 725.5 4765.4 5966.7
Fiscal subsidy 0.132 0.168 0.806 1.106 0.111 0.136 0.801 1.047
EENS 207.9 LOLP 0.99 EENS 434.3 LOLP 0.984
Scheme 3 Scheme 4
DEH EBH HPH Total DEH EBH HPH Total
Heating energy 41 54 240 335 42 56 242 340
Heating capacity 51.3 53.8 96.0 201.1 52.7 55.9 97.1 205.7
Heating area 768.2 963.9 4580.5 6312.6 790.1 1003.4 4640.9 6434.4
Fiscal subsidy 0.183 0.185 0.783 1.151 0.191 0.198 0.826 1.215
EENS 174.9 LOLP 0.991 EENS 241.4 LOLP 0.99
Note: DEH -- Decentralized electric heating, EBH-- Electric boiler heating, HPH -- Heat pump heating.
Unit: Heating energy / GWh, Heating capacity /MW, Heating area / thousand square meters, Fiscal
subsidy / billion RMB, EENS / MWh.
In 2016, the real increased electric heating area in the city is the same as scheme 1. The actual new
electric heating energy consumption is 329 GWh and financial subsidy is 1.091 billion RMB, which is
close to scheme 1. During the heating season 2016 - 2017, the newly constructed electric heating

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project does not experience any unplanned-out function, and the heating reliability is 100%, which
reconfirms the feasibility of the proposed method. According to the environmental pollutant emission
factor of per unit fossil energy heating consumption announced by local environmental protection
department, combined with the historical bulk coal consumption in the city, the proposed clean heating
scheme could reduce the bulk coal consumption 132 thousand tons per year, cut down PM2.5 emission
of 58.5 tons and SO2 emission about 1090 tons.
3.2 Case 2
The door-to-door interview conducted by State Grid Corporation of China shows that bulk coal
consumption is 225 million tons in its service area in 2015. Two thirds of the bulk coal is consumed in
the rural area, and 80% in northern China, northeastern China and northwestern China [13]. According
to China’s Statistical Yearbook, during the 11th Five-Year Plan period, floor space of building
completed increases at 8.08% annually, while it increases at 5.26% annually during the 12th Five-Year
Plan period. In 2016, its increase rate is 6.08%. During the 13th Five-Year Plan period, the predicated
annual growth rate would be above 5%. Applying the above model on the northern China region,
compared to that in 2016, the result shows that northern China would increase electric consumption on
heating to 184.71 billion kWh in 2021. In which, northern China, northwestern China and northeastern
China respectively accounts for 53%, 32.2% and 14.8% of the new electric consumption on heating.
The newly added electric heating area is about 1.88 billion square meters, of which, northern China,
northwestern China and northeastern China accounts for 67.7%, 22% and 10.3% respectively.
According to the construction cost of different types of electric heating, the fiscal subsidy needed is
about 337.43 billion RMB, of which, 49.87 billion RMB for the heating electricity consumption
subsidy and 287.56 billion RMB for electric heating equipment procurement and installation. Based
on the current emission levels of various energy consumption released by local environmental
protection department and bulk coal consumption in each region, by implementing electric heating
plan, northern China could reduce emissions of PM2.5 by about 32 thousand tons, SO2 about 714
thousand tons in year 2021, and decrease the bulk coal consumption by 81 million tons with
significant environmental benefits.
Tab. 2 Newly added electric heating in northern China in year 2017 - 2021
Heating energy / billion kWh Heating area / billion square meters
DEH EBH HPH Total DEH EBH HPH Total
Total 70.78 73.55 40.37 184.71 0.512853 0.50145 0.865139 1.879447
Northern China 44.72 34.78 18.43 97.94 0.387532 0.297343 0.587678 1.272554
Northwestern China 18.24 27.1 14.14 59.48 0.088749 0.145045 0.179912 0.413707
Northeastern China 7.82 11.67 7.8 27.29 0.036572 0.059062 0.097549 0.193186
Note: DEH -- Decentralized electric heating, EBH-- Electric boiler heating, HPH -- Heat pump heating.
4 CONCLUSION
This paper aims to increase the clean heating area ratio to meet the growing heating need, regional
emission reduction targets, all possible energy supply capacity, financial subsidy capacity, clean
heating project economy of construction and operation, heating reliability. Applying them as the
constraints, considering the application condition of different types of electric heating, a method of
electric heating planning in northern China based on emission reduction and existing heating cost is
proposed. In the proposed method, the electric heating planning scheme of a city in northern China in
the winter of 2016 is put forward and compared with the actual results of its construction and
operation, which confirms the rationality and feasibility of the method. The main constraints for the
development of clean heating are the economy of large-scale clean heating projects and the financial
subsidy ability of local governments.
The results show that by 2021 the newly added electricity consumption for heating in northern China
would be 184.7 billion kWh and the newly built electric heating area would be 1.88 billion square
meters. The electric heating mode would mainly be decentralized electric heating, centralized electric
boiler heating with thermal storage and ground source heat pump heating. Electric heating would
contribute greatly to the emission reduction in populated areas. Results of the research can provide
decision reference on clean winter heating to reduce air pollution for related governments and
enterprise deployments.

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