U.S. Buildings Sector Scenarios to 2050

In 2023 we explored the impacts of several buildings sector scenarios on energy demand, emissions, and the grid through 2050. Considering a comprehensive portfolio of building efficiency, flexibility, and electrification measures, we found:

Deep reductions in buildings sector energy and emissions are possible by 2050

U.S. buildings sector CO₂ emissions could be reduced up to 91% below 2005 levels by 2050 with aggressive deployment of efficiency and electrification and a low-emissions grid. This scenario also avoids more than one-third of total reference case building energy use and slightly reduces reference case building electricity demand.

Figure Caption: The figure shows CO₂ emissions, site electricity, and site energy results for the U.S. buildings sector from 2022–2050 for three benchmark (BM) scenarios representing low, moderate, and high building emissions reductions. Results are relative to the EIA Annual Energy Outlook (AEO) 2021 Reference Case forecast (electricity, energy) or relative to the AEO forecast with GridSIM Reference Case CO2 intensities substituted for electricity (emissions). Nine additional scenarios are simulated to explore key sensitivities in the results and denoted by colored shading. Bounding sensitivity scenarios for each benchmark are annotated.

Building efficiency and electrification are critical for deep emissions reductions

Measures that affect building energy demand, especially those that improve building envelope performance and upgrade HVAC and water heating equipment to more efficient electric options, could account for up to nearly half of total sectoral CO₂ emissions reductions by 2050, with remaining reductions coming from reduced emissions of the building electricity supply.

Figure Caption: The figure shows emissions reduction wedges relative to AEO 2021 Reference Case buildings sector emissions for the low, moderate, and aggressive benchmark scenarios. Reductions from electrifying and improving the efficiency and flexibility of building end uses (demand-side measures) are indicated with colored wedges for each affected end use. Power supply emissions reductions from any reference case building electricity that remains after accounting for deployment of efficiency and flexibility measures, is indicated with a dark gray wedge in the figure, and remaining buildings sector emissions are represented by the lighter gray wedge.

Building efficiency and flexibility reduce the cost of grid emissions reduction

Building measures could avoid up to $107 billion in bulk power system investments per year by 2050, or more than a third of the incremental costs of a fully emission-free power supply. These avoided costs cover the vast majority of (84%) of the demand-side portfolio’s incremental deployment cost. Building envelope improvements and HVAC measures that improve the efficiency of end-use electrification are especially valuable.

National Power System Cost Savings by End Use

National Power System Cost Savings by Measure and Customer Type

Figure Caption: Benefits of the measure portfolio represent avoided generation and transmission investments given full portfolio deployment, in 2022$. Electrification (EL) measure benefits involve switching from an inefficient to an efficient EL measure, yielding positive power system benefits in our analysis. Energy efficiency measures are abbreviated in the figure as EE. A subset of both EL and EE measures is represented with demand flexibility (DF) features. Non-electric measures were excluded from these results, thus excluding natural gas system cost savings. Avoided distribution system investments were also not accounted for in our analysis.

Early retrofits and codes and standards are key deployment levers

Numerous policy, regulatory, and market-based levers can influence building decarbonization pathways. Accelerating early retrofits, increasing deployment of efficient technologies via enacting stringent codes and standards and improving marketability, and commercializing breakthrough technologies are key levers for achieving the highest potential for buildings sector emissions reduction by mid-century.

Low Decarbonization Scenarios; Moderate Decarbonization Scenarios; Aggresive Decarbonization Scenarios

Figure Caption: The figure shows results for nine sensitivity scenarios, which are organized into three groups and assessed relative to the 2050 avoided CO₂ emissions (top row) and cumulative avoided CO₂ emissions from 2023-2050 (bottom row) of the three benchmark (BM) scenarios. The sensitivity cases assess the influence of five building dynamics on annual energy and emissions: reductions in efficiency of electrification via substantial conversion from fossil-based heating and water heating to electric resistance technologies; failure to increase the market-available technology performance ceiling via eventual introduction of breakthrough efficiency technologies with very low cost and performance; failure to increase the market-available technology performance floor via implementation of more aggressive building performance codes and efficiency standards; and failure to deploy additional market-viable efficiency and flexibility options not represented in the reference case – primarily envelope retrofits and advanced controls. Energy efficiency and electrification are abbreviated in the figure as EE and EL, respectively.

Efficiency reduces emissions now and enables electrification impacts later

Building electrification is an essential long-term component of buildings sector emissions reduction, delivering nearly twice as much emissions reductions as building efficiency from 2030–2050. Prioritizing efficiency in the near-term, however, delivers significant CO₂ reductions by 2030 and hedges against a slower pace of end-use electrification. Building efficiency and demand flexibility also facilitate electrification at all scales of the electricity system (from behind-the-meter and distribution through transmission and generation).

Figure Caption: The figure shows reductions from the 2005 buildings sector emissions total for the aggressive benchmark scenario broken out between 2005–2030 and between 2030–2050 by source: historical reductions (from 2005–2022); reductions projected in the reference case forecast; further demand-side reductions via building efficiency, flexibility and electrification beyond the reference case; and further reduced emissions of the building electricity supply beyond the reference case. Energy efficiency and electrification measures are abbreviated in the figure as EE and EL, respectively. A subset of both EL and EE measures is represented with demand flexibility (DF) features.

Overview of the Methodology

We combine detailed bottom-up modeling of buildings sector emissions reduction measures, technology stock turnover, and consumer purchasing decisions with a long-run simulation of the US power system to estimate the energy and power system cost impacts of the pathways considered in our analysis.

A dozen modeling scenarios that span a comprehensive range of key factors such as the rate of new building technology deployment, the pace and extent of low-emissions power generation, and the performance levels of available efficient and flexible technologies, among others.

Representation of the installed costs, consumer adoption, and energy demand impacts of over 150 residential and commercial buildings sector emissions reduction measures between 2023-2050 using the U.S. DOE Building Technologies Office (BTO) Scout model.

Granular geographic representation of U.S. power sector development and electricity emissions across 25 regions using Brattle's GridSIM capacity expansion model.

Hourly modeling of system impacts from demand-side building measures through 2050, including optimized dispatch of building demand flexibility measures, using Brattle's LoadFlex model.

Our analysis assesses the effects of a full suite of building measures and measure deployment dynamics that could be affected by policy programs

BUILDING MEASURES

Energy efficiency
(persistent reductions in energy to serve electric/fossil loads)

Demand flexibility
(shed, shift, and/or shape electric loads to better match electric grid needs)

End-use electrification
(switch from fossil-based to electric end-use services)

DEPLOYMENT DYNAMICS

Elevate minimum performance codes/standards
(raise market-available performance "floor")

Introduce breakthrough technologies
(raise market-available performance "ceiling")

Accelerate electrification
(escalate annual fuel switching rates)

Accelerate retrofit decisions
(add annual early replacement rates)

Demand-side (BTO Scout)

Supply-side (Brattle GridSIM)

Power grid emissions reduction
(emissions decline to target by certain year)

Benchmark scenarios are differentiated primarily by levels of efficiency, electrification, and grid emission reduction

Benchmark scenario	Efficiency and electrification	Grid decarbonization	Question addressed
1: Low	Aggressive Electrification Only	Reference Case (GridSIM Reference Case)	How impactful is aggressive electrification on emissions without efficiency and under slow reduction of grid emissions?
2: Moderate	Moderately Aggressive	Moderately Aggressive (80% Reduction from 2005 Levels by 2050)	Is mostly market-driven demand-side measure deployment with moderate reductions of grid emissions sufficient to yield deep reductions in building emissions?
3: Aggressive	Aggressive	Aggressive (100% Reduction by 2035)	How deeply can building emissions be reduced under a best-case scenario of demand-side measure deployment and grid emissions reduction?

Our results provide critical insights into the role of the buildings sector in reducing energy-related emissions and enabling the transition to a low-emissions power supply. Read the journal article to dive deeper into our key findings.

Read the Journal Article

For more information, please reach out to the study authors

Lawrence Berkeley National Laboratory

Jared
Langevin
Research Scientist

Aven
Satre-Meloy
Research Scientist

Andrew
Satchwell
Research Scientist

The Brattle Group

Ryan
Hledik
Principal