**1. Introduction**

The Intergovernmental Panel on Climate Change [1] declared that achieving the Paris Climate Agreement target of limiting temperature increases to 1.5 ◦C requires exceptional actions. As countries face increasing challenges due to the scarcity of resources and dependence on raw materials, while carbon emissions reduction targets need to be met, CE could help move from a traditional linear take, make, and waste economy to a circular model.

The UK is the first country to set legislation to achieve 'Net Zero' greenhouse gas (GHG) emissions by 2050 [2]. This requires strong commitments to avoid further delays in reducing emissions. The built environment in the UK represents 30% of the total emissions [3].

The heat pump market has been growing gradually and reached 10% of the global building heating demand in 2021 [4]. Heat pump sales in Europe reached 7 million units in 2021 led by France with 537,000 units per year [5]. In the UK, yearly heat pump uptake is lower when compared with European countries (43,000 in 2021). The UK government aims to reach 600,000 heat pump installations per year by 2028 [6]. The Climate Change Committee suggest that this number should reach 1 million installations per year by 2030 to track UK's Net Zero pathway. The UK government introduced the Boiler Upgrade Scheme

**Citation:** Sevindik, S.; Spataru, C. An Integrated Methodology for Scenarios Analysis of Low Carbon Technologies Uptake towards a Circular Economy: The Case of Orkney. *Energies* **2023**, *16*, 419. https://doi.org/10.3390/ en16010419

Academic Editors: Viktor Koval, Dzintra Atstaja and Ilona Skaˇckauskiene˙

Received: 15 November 2022 Revised: 22 December 2022 Accepted: 23 December 2022 Published: 29 December 2022

**Copyright:** © 2022 by the authors. Licensee MDPI, Basel, Switzerland. This article is an open access article distributed under the terms and conditions of the Creative Commons Attribution (CC BY) license (https:// creativecommons.org/licenses/by/ 4.0/).

(BUS) in 2020 to accelerate this transition by providing a grant of £5000 for heat pump installations [7]. The Scottish Government granted a slightly higher subsidy named the Home Energy Scotland (HES) loan providing a cashback of up to £7500 and an interest-free loan for the rest of the costs of up to £2500 for heat pumps [8].

The Paris Agreement declared that the reliance on fossil fuels and energy imports makes islands vulnerable to climate change. The price cap for heating homes in Shetland and Orkney islands is the highest two figures with 107% and 96% more than the average price cap in 2021 with the highest annual energy bills among UK local authorities [9]. Orkney is an archipelago in the Northern part of Scotland. Even though Orkney generates its electricity from local renewable sources, electricity prices are assumed to be 2.5 pence higher than southern Scotland values [10]. Orkney's Fuel Poverty Strategy report indicates that 63% of households are living in fuel poverty in Orkney due to higher heating costs, older housing stock conditions, lower average income, and a long winter season with strong wind speeds [10].

Buildings are responsible for 35% of the energy use after transport (45%) in Orkney [11]. The majority of building-related energy consumption occurs in the domestic sector. The main fuel types used for heating are electricity and oil with 52% and 43%, respectively. The amount of electricity generated from renewables was more than the island's need in 2016 [12]. Therefore, there is a transition for electrification in heating. The number of all heat pump types deployed in 2021 was more than 1000 which accounts for 117 heat pumps per 1000 households [13]. This is the second-largest heat pump uptake among the Scottish local authorities. Therefore, this study aims to take an integrated approach to investigate the environmental impacts of replacing conventional heating systems with heat pumps by combining life cycle assessment with energy systems optimisation modelling (ESOM). A multi-level assessment framework helps to identify energy, environmental, and economic savings of individual heating technologies by house archetypes and cumulative savings for the island level in line with the UK's net zero target. Orkney was selected as a case study to analyse the existing electrification of heating trend and potential future decarbonisation scenarios towards a CE.
