Economic analysis of heating and cooling systems from the various perspectives: Application to EHP and GHP in Korea

Abstract

Energy flow from the primary energy to the final energy use varies depending on which device is used for the heating and cooling energy service. This paper presents economic analyses of medium capacity space heating and cooling systems from three perspectives – primary energy, final consumer, and social cost perspective. From the analysis results of primary energy and final consumer perspective, electric heat pump (EHP) system is found to be superior to the gas engine driven heat pump (GHP) system for the energy consumption and cost-effectiveness due to its higher system efficiency. However, the result of social cost perspective shows the GHP system is superior to the EHP system considering incurred incremental electricity generation capacity construction cost and avoided gas storage tank construction cost due to a new installation of each system. And this paper suggests three analysis methodologies – the primary energy, final consumer, and social cost perspective – can be used for developing various measures and policies for integrated demand side management.