Carbon Mitigation Unit Costs of Building Retrofits and the Scope for Carbon Tax, a Case Study

Abstract Energy and environmental data is collected from 5 tower blocks each containing 90 apartments to create two representative calibrated energy models. Three towers (heated by individual natural gas boilers) characterise medium (137.3 kWh/m2/yr.) and two (heated by electrical night storage heaters) characterise low (75.4 kWh/m2/yr.) thermal demands when benchmarked against actual UK domestic portfolio. Across 2020-2040 time horizon, an uncertain landscape is presented by 12 fuel carbon intensity and 14 economic scenarios in order to examine building fabric upgrade, with or in conjunction with centralised CHP engines, GSHP and biomass boilers in the case study towers. Out of 18 retrofit options examined, 7 or 8 solutions (under annual fuel price rises of 2% or 5.2% respectively) can provide lifetime CO2e mitigation at unit costs that fall below the upper bounds of carbon capture and storage technologies (US$143/tCO2e). If carbon taxation were to be used to enable full recovery of retrofit capital expenditure with no government subsidy, the lowest tax level observed belongs to a transition to centralised biomass from decentralised natural gas boilers requiring US$111/tCO2e (in 2020), while deep retrofits (i.e. plant and fabric) require much more punishing carbon taxes with 2020 figures ranging from US$233/tCO2e to US$1665/tCO2e.