*Article* **An Integrated Methodology for Scenarios Analysis of Low Carbon Technologies Uptake towards a Circular Economy: The Case of Orkney**

**Selman Sevindik \* and Catalina Spataru**

Energy Institute, Bartlett School Environment, Energy and Resources, University College London, London WC1E 6BT, UK

**\*** Correspondence: s.sevindik@ucl.ac.uk

**Abstract:** This study aims to create a comprehensive, holistic approach to evaluate the environmental, energy, and economic impacts of air source heat pump deployment scenarios through: (i) a life cycle assessment of air source heat pumps in Orkney houses, (ii) energy systems optimisation modelling to optimise the performance of an air source heat pump coupled with thermal energy storage tank to reduce use phase related impacts in Orkney, (iii) modelling of Orkney's domestic building stock to understand the housing condition, and (iv) economic modelling to analyse the life cycle cost of an air source heat pump and potential savings when replacing conventional heating systems. The results show that an 82% reduction in energy supply could be achieved when ambitious energy efficiency improvement measures are adopted in the circular economy scenario. The use phase related emissions could be reduced by 98% when the air source heat pump becomes the only heating technology in Orkney. However, the life cycle-wide approach suggests that strong commitments are required in the manufacturing stage of these technologies through implementing circular principles, such as including the use of secondary materials, eco-design, and reusability of all components. Moreover, total heating costs paid by consumers in Orkney could be reduced by 84% in the circular economy scenario when air source heat pump uptake is coupled with energy efficiency improvement measures, but it requires a £130 million investment to insulate the whole housing stock of Orkney. Future scenarios indicate that decision-making has significant importance on overall results. Therefore, circular economy standards for air source heat pump manufacturing and deployment are crucial to reduce the negative impacts of fuel poverty and reach the net zero target.

**Keywords:** circular economy; energy systems modelling; islands; life cycle assessment; low-carbon heating
