Optimising national energy systems integrating heat pumps: Effects of rising cooling demand and heating demand-side management strategies

Heating and cooling interplay affects the energy system planning and operation, especially in heating-dominated countries with rising cooling demand. Heating demand-side management (DSM) measures, such as building envelope retrofit or temperature setpoint reduction can provide flexibility and facilitate HP integration, in order to avoid stress on electricity grids due to heat pumps operation. This study analyses the effect of future residential cooling and heating electrification in Switzerland under various DSM strategies by soft-coupling two energy system models: a physics-based building stock model (SwissRes+) and an energy optimisation model (GRIMSEL). Our results show that heating electrification has a substantial impact on capacity planning and system operation. Applying any heating DSM strategies leads to lower capacity needs, with retrofit showing the largest impact. However, deep retrofit scenarios result in overall higher total energy system costs (+13.5%) due to additional renovation investments. Reducing temperature setpoint by 1 °C decreases battery storage investments by up to 20% or 5 GW and could potentially reduce levelized electricity costs by up to 3.6%, therefore providing significant benefits for long-term planning. Conversely, rising residential cooling has a limited impact on optimal capacity planning (PV and battery storage), but affects system operation (e.g., reducing curtailments and exports while increasing self-consumption and imports), and slightly lowers levelized electricity cost, especially under higher PV adoption scenarios. These findings provide relevant insights for policymakers and energy planners to incorporate heating DSM strategies while adapting to increasing cooling demand driven by climate change.