Does it pay to develop a ground source heat pump system? Evidence from China.

The application potential and environmental benefits of ground source heat pump (GSHP) systems have become the focal points of decarbonization in the building sector. Synchronized and scientific analysis of GSHP systems' environmental and economic performance, however, remains lacking. This study analyzes the application prospects of GSHP systems via a life cycle assessment-based life cycle costing method, and considers China's actual status quo. The internal and external annual costs of a GSHP system per square meter are $ 4.05 and $ 1.37, respectively. Electricity generation and steel production are key processes to improve the environmental performance of a GSHP system further. Compared with coal-based heating, a GSHP system can mitigate 65%-95% of the environmental impact and 85% of external costs, except for the metal depletion impact which is 1.5 times higher than that of coal-based heating. In Shandong Province, promoting GSHP systems can substitute up to 69.4% of the district heating area, which implies reductions in fossil depletion, greenhouse gas emissions, human health impact, ecosystem quality impact, and external costs by up to 2.37 × 10 kg oil eq, 1.08 × 10 kg CO eq, 3.87 × 10 DALY, 1.18 × 10 Species. year, and $ 2.51 × 10, respectively. In consideration of environmental and economic aspects, a GSHP system can exhibit benefits compared with coal-based heating after 2.34 years of operation. To improve the economic and environmental performance of GSHP systems, a series of recommendations on financial subsidies, renewable energy development, inter-regional power transmission, steel scrap utilization, and hydrogen reduction steelmaking is provided.