Modelling work
at EC DG RTD and TREN
as a basis for policy making:
an overview
Maria R. Virdis
DG RTD – J1
NEEDS – 1st Policy Workshop
Rome, 7 April 2006
RTD/J1/MRV
NEEDS – 1st Policy Workshop
7/4/2006
Content
 PRIMES modelling approach and scenarios
 POLES modelling approach and scenarios
 WETO H2 scenarios
DG-RTD/J1/MRV
NEEDS – 1st Policy Workshop
7/4/2006
PRIMES Modelling and scenario approach (1)
 Baseline and renewables scenarios draw on PRIMES model and other
more specialised models operated by a consortium led by NTUA;
 Baseline is a starting point for scenarios on alternative framework
conditions and policy approaches, such as:
-
higher energy import prices;
alternative policies (energy efficiency, renewables penetration, on
nuclear or transport policies).
 2005 Baseline to 2030 is an update of the “Trends to 2030” of 2003;
 Baseline reflects current trends and policies of the EU and the MS;
 Model produces a complete representation of the energy economy of the
EU and its 25 Member States up to 2030; plus other European countries,
with a deep disaggregation by sector and fuel for energy consumption,
transformation and production and for CO2 emissions;
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PRIMES Modelling and scenario approach (2)
 Approach includes macro-economic analyses, world energy modelling
(import prices from the POLES model) and in depth analyses on specific
areas (e.g. renewables, transport);
 Consultation with Member states, EC services and stakeholders;
 Scenarios are under preparation addressing:
- better energy efficiency;
- 20% renewables share target for 2020 under discussion;
- revisiting 12% renewables share in 2010 scenario;
- combination of renewables with high efficiency scenario;
- high energy import prices (sub-case with more oil and gas price decoupling.
 Scenarios on e.g. nuclear and effects of transport policies will follow;
 Baseline and scenarios to be updated in 2006 given the rapidly changing
energy environment; new publication planned for early 2007.
DG-RTD/J1/MRV
NEEDS – 1st Policy Workshop
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Assumption for the 2005 baseline
 Population increase is small with a stagnation from 2020 onwards;
 Aging and lifestyle changes lead to smaller households; their number
increases by almost 25% over 30 years to 2030;
 GDP in EU-25 increases by 2.0% pa in 2000-2030:
-
rather low growth in this decade;
-
low growth also in 2020-30 due to stagnant and aging population.
 Economic growth reflects overall economic/social policies;
 Sectoral growth rates (industries and services) consistent with GDP;
 Growth of passenger and freight transport activity in line with the results of
the ASSESS study for the Transport White Paper;
 Future weather conditions as of 2000 (warmer than long-term average);
 High energy import prices – reaching 58 $/bbl for oil in 2030 (in money of
2005 – in nominal terms, price in 2030 could come close to 100$)
DG-RTD/J1/MRV
NEEDS – 1st Policy Workshop
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Policy Assumption for the baseline
 2005 Baseline includes policies implemented in the M S by end 2004;
 Tax rates in place are constant in real terms (grow with inflation);
 Continuation of the economic reform process (e.g. Lisbon strategy) and
completion of the internal electricity and gas markets by 2010;
 Continuation of active policies to promote better technologies;
 Continued policies on energy efficiency including implementation of the fuel
efficiency agreement with the car industry;
 Nuclear phase-out in certain old Member states and agreed closure of plants
with safety concerns in new MS;
 Continued promotion of renewables;
 No further strengthening of climate change policies - CO2 emissions are
modelling results.
DG-RTD/J1/MRV
NEEDS – 1st Policy Workshop
7/4/2006
EU-25: Baseline: Final energy demand by fuel
mtoe
1400
renewables
1200
1000
solids
800
electricity/heat
600
gas
400
200
oil
0
1990
DG-RTD/J1/MRV
2000
2010
2020
NEEDS – 1st Policy Workshop
2030
7/4/2006
EU-25: Baseline: Electricity generation by fuel
(in TWh)
4500
solid fuels
4000
3500
oil
3000
2500
gas
2000
1500
renewables
1000
500
0
2000
DG-RTD/J1/MRV
nuclear
2005
2010
2015
2020
NEEDS – 1st Policy Workshop
2025
2030
7/4/2006
EU-25: Baseline: Renewables share
in power generation
30%
geothermal
25%
solar
20%
biomass/waste
15%
10%
wind
5%
hydro
0%
2000
DG-RTD/J1/MRV
2010
2020
NEEDS – 1st Policy Workshop
2030
7/4/2006
EU-25: Baseline: Energy consumption by fuel and
carbon and energy intensity
mtoe
Carbon and Energy intensity 1990=100
100
2000
renewables
1750
75
1500
nuclear
natural gas
1250
50
1000
750
oil
solids
25
500
250
0
0
1990
DG-RTD/J1/MRV
2000
2010
2020
NEEDS – 1st Policy Workshop
carbon
intensity
energy
intensity
2030
7/4/2006
Work plan for 2006: overview
 Reporting on 2005 baseline (sharing results among experts and
stakeholders through a report to be finalised – no new “red book”);
 Completion of scenarios under construction and reporting:
high oil/gas prices;
scenarios on renewables (some 20% in 2020 and 12% in 2010),
energy efficiency and combination with renewables cases;
 Fresh scenario work on nuclear, transport and policies combined;
 New baseline in 2006 for 30 countries reflecting latest developments and
stakeholder comments;
 Extension of baseline modelling to all countries of S-E Europe;
 New energy and transport scenarios starting from the 2006 baseline;
 New 2006 scenarios designed to include also feedbacks on GDP, sectoral
production and employment; i.e. include second round effects through
changes in GDP following RES and efficiency policies.
DG-RTD/J1/MRV
NEEDS – 1st Policy Workshop
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POLES modelling approach and
scenarios
DG-RTD/J1/MRV
NEEDS – 1st Policy Workshop
7/4/2006
Scope
To provide policy-makers at EU level with a 50-year ahead vision on the
future structure of world energy markets, GHG emission trends and
resource exploitation patterns
Several scenarios are systematically generated as variants of the
baseline projection, assuming alternative policy options and
different hypotheses on

Economic growth

Resource availability

Technology development
DG-RTD/J1/MRV
NEEDS – 1st Policy Workshop
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Methodology: POLES model
 Reference scenario developed and quantified with POLES.
 Model jointly developed by LEPII-EPE (F), IPTS (EC) and
Enerdata (F)
 Together with PRIMES and GEM-E3, a reference EC policy
analysis tool, extensively used to address the long-term
evolution of energy markets at global level (GHG emissions,
security of energy supply and energy technology)
 Time horizon extended to 2050
 Calculation of energy balances for 32 countries and 18 world
regions
 Disaggregation into 15 energy demand sectors, 12 new/renewable
technologies and 12 power generation technologies
 Simulation of oil and gas: discoveries and reserves for main
producers
 International energy prices and markets are endogenous
DG-RTD/J1/MRV
NEEDS – 1st Policy Workshop
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Drivers and constraints to world
energy development (1)
 Population
World population is expected to grow to 8.9 Billion in
2050, with a slowdown that anticipates stabilisation in
the second half of the century
 Economic growth (source: CEPII (F))
• Economic growth slows down, from 3.5 %/yr in 1990-2010, to
2.9%/yr in 2010-2030 and 2.2 %/yr in 2030-2050
• In 2050 total world GDP represents four times the current GDP
• Industrialised regions converge towards a less than 2%yr
growth in the very long run, Asian economic growth
significantly slows down, while growth accelerates in Africa
and the Middle-East
DG-RTD/J1/MRV
NEEDS – 1st Policy Workshop
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Drivers and constraints to world
energy development (2)
 World oil production
•
Identified reserves amount to 1000 Gbl; (~ oil cumulative prod. today)
•
Progress in recovery rate: URR: from 2600 Gbl today to 3500 Gbl in 2050
•
Conventional production peaks to about 100 Mbl/d by 2025)
•
Non-conventional oil resources deploy mainly in the western
hemisphere
World Conventional Oil Production
100
Mbl/d
80
60
Iran
Iraq
UAE
Kow eit
Saudi Arabia
40
20
0
2001
DG-RTD/J1/MRV
2030
2050
NEEDS – 1st Policy Workshop
World Non-Conventional Oil Production
35
30
25
Mbl/d
Other Countries
Canada
USA
Russia
Nigeria
Venezuela
120
USA - Oil Shales
Venezuela - Extra Heavy Oil
Canada - Tar Sands
20
15
10
5
0
2001
2030
2050
7/4/2006
Reference case - Definition
35
Europe
Rest Annex 1
Non-Annex 1
30
€05/tCO2
 Accounts for “minimum”
climate policies, differentiated
by world regions (exogenous
carbon value), according to the
presently in-force climate
policies
25
20
15
10
5
0
2000
2010
2020
2030
2040
2050
120
 Higher endogenous oil
prices
100
$05/boe
 Simulates a relatively
constrained access to the oil
resources in the Middle-East
Gas
80
60
40
20
0
1980
DG-RTD/J1/MRV
Oil
NEEDS – 1st Policy Workshop
1990
2000
2010
2020
2030
2040
2050
7/4/2006
Reference case –
Primary energy consumption
World
Europe
2050: 22 Gtoe (10 Gtoe in 2001)
2050: 2.6 Gtoe (1.9 Gtoe in 2001)
Oil & Gas: 6 & 4 Gtoe resp.
Oil & Gas: 0.6 & 0.5 Gtoe each
RES + Nuclear: 6 Gtoe
RES + Nuclear: 1 Gtoe
Coal: 6 Gtoe (> ¼)
Coal: 0.5 Gtoe (1/5)
25,0
Renew ables
Nuclear
Gas
Oil
Coal
2500
Renew ables
Nuclear
Gas
Oil
Coal
2000
15,0
Mtoe
Gtoe
20,0
3000
10,0
1500
1000
5,0
500
0,0
0
2001
DG-RTD/J1/MRV
2010
2020
2030
2050
NEEDS – 1st Policy Workshop
2001
2010
2020
2030
2050
7/4/2006
Reference case:
Electricity production
World
Europe
 Increase: 2.8%/year on average
 Increase: 1.8%/year on average
 Share of non-fossil electricity:
decrease up to 2020 followed
by a significant increase (50%
in 2050)
 Share of non-fossil electricity
would reach 60% in 2050
9000
70000
TWh
50000
40000
30000
7000
Renew ables
Nuclear
Gas
Oil
Coal
6000
TWh
60000
8000
Renew ables
Nuclear
Gas
Oil
Coal
5000
4000
3000
20000
2000
10000
1000
0
0
2001
DG-RTD/J1/MRV
2010
2020
2030
2050
NEEDS – 1st Policy Workshop
2001
2010
2020
2030
2040
2050
7/4/2006
Reference case:
Renewable electricity
Europe
 Increase: 5%/year on average 9n
2001-2030, accelerates to
5.7%/year in 2030-2050
 Increase: 4%/year on average in
2001-2030, accelerating to 5.3%
year in 2030-2050
 Wind potential expanding, and
significant emergence of solar
power
 Wind potential exhausted after
2040
20000
18000
16000
14000
12000
10000
8000
6000
4000
2000
0
3000
Biomass
2500
Solar
Biomass
Solar
2000
Wind
TWh
TWh
World
Hydro
Wind
Hydro
1500
1000
500
0
2001
DG-RTD/J1/MRV
2010
2020
2030
2050
NEEDS – 1st Policy Workshop
2001
2010
2020
2030
2040
2050
7/4/2006
Reference case: CO2 emissions
World
50
45
40
GtCO2
35
30
25
2050: non-Annex 1 = 2/3 world
emissions
Rest Asia
India
China
Middle East
Africa
Latin America
CIS
Japan - Pacific
North America
Europe
2050: 2.5 times the 1990 level
20
15
10
Europe
5
0
1990
2001
2010
2020
2030
2050
2050: 5% above 1990 level
50
6000
45
40
5000
4000
30
MtCO2
GtCO2
35
Electricity
Res-Ser-Agr
Transport
Industry
Electricity - Transformation
Res - Ser. - Agr.
Transport
Industry
25
20
3000
2000
15
10
1000
5
0
2000
2010
DG-RTD/J1/MRV
2020
2030
2040
2050
0
2000
NEEDS – 1st Policy Workshop
2010
2020
2030
2040
2050
7/4/2006
Reference case:
World oil markets
Oil Trade by Region
4000
3000
2000
Rest Asia
Japan - Pacific
Europe
North America
Middle East
Africa
Latin America
CIS
Mtoe
1000
0
-1000
-2000
-3000
Net Imports > 0
-4000
2001
DG-RTD/J1/MRV
2010
2020
2030
NEEDS – 1st Policy Workshop
2050
7/4/2006
Reference case:
World gas markets
Gas Trade by Region
2000
1500
1000
Asia
Japan - Pacific
Europe
North America
Middle East
Africa
Latin America
CIS
Mtoe
500
0
-500
-1000
-1500
Net Imports > 0
-2000
2001
DG-RTD/J1/MRV
2010
2020
2030
NEEDS – 1st Policy Workshop
2050
7/4/2006
Key messages
from the Reference
 By 2050 the volumes traded within the world energy system and
corresponding CO2 emissions would be roughly double today’s
 Because of the “peak oil” and “peak gas” and in spite of the marked
progresses of RES and nuclear energy after 2030 …
 Coal comes to be a strategy primary source in the world energy balance
 Which aggravates the CO2 emissions problem
 However, contrasted situation in EU (more carbon-free primary electricity)
 Constraints in oil and gas markets (specially after 2030) will involve
many structural changes. These are mostly related to:
 The necessity of “closing” the world energy balance in the long run
 Solve the bottleneck of the oil-based transport sector of modern societies
 The European vulnerability to supply is a crucial issue, for which
renewables and nuclear may prove very cost/effective and curb GHG
emissions
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WETO H2 scenarios
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NEEDS – 1st Policy Workshop
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Objectives
The WETO-H2 scenario analysis aims at:
 Identifying and quantifying technological breakthroughs that may lead to a
significant market penetration of hydrogen as an energy carrier at
European and global level by 2050.
 Providing a harmonised and coherent view of the possible emergence
pathway of a hydrogen-based energy system, including contrasted
hypothesis on resource availability and technology deployment.
 Assessing the implications of GHG emission reduction policies on the
development of hydrogen as energy carrier, and viceversa.
DG-RTD/J1/MRV
NEEDS – 1st Policy Workshop
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The hydrogen scenario(s)

The main Hydrogen-scenario assumes an accelerated penetration of Hydrogen
in energy markets according to the specifities of each country and includes the
same ambitious carbon abatement policies as in the WETO carbon constrained
scenario (Carbon value rising to 150-200 Euro/tCO2 by 2050). It is referred to
as CCH2.

As a variant for comparative purposes mainly to analyze the structure of the
hydrogen production mix, a second hydrogen scenario was also run (H2), with
the same technological assumptions that CCH2 but with the mild carbon
emission restrictions imposed in the reference projection.

It assumes an accelerated competitiveness of hydrogen-related technologies,
with a specialised view on:
 The fossil-fuel-based hydrogen. (gasification, new thermodynamic cycles)
 The electricity-based hydrogen production routes (nuclear, renewable
electricity)
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NEEDS – 1st Policy Workshop
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Transport technologies
11 generic car technologies are represented:
 Light Gasoline
 Large Gasoline
 Light Diesel
A dedicated module
representing the behaviour of
the road passenger transport
demand has been developed.
 Large Diesel
 Electric vehicle
 Fuel cell H2-fuelled
Three categories of users:
 Hybrid-gasoline fuelled

Urban use (< 10.000 kms/year)
 Hybrid-diesel fuelled

Normal use ( ~ 20.000 kms/year)

Intensive use (> 40.000 kms/year)
 Hybrid-Fuel cell H2 fuelled
 Internal Combustion Engine H2 fuelled
 Internal Combustion Engine Natural Gas-fuelled
DG-RTD/J1/MRV
NEEDS – 1st Policy Workshop
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World primary energy demand
World primary consumption - CCH2
World primary consumption - Reference
25
Renew ables
Nuclear
Gas
Oil
Coal
25
20
15
Gtoe
Gtoe
20
Renew ables
Nuclear
Gas
Oil
Coal
15
10
10
5
5
0
0
2001
2010
DG-RTD/J1/MRV
2020
2030
2050
2001
NEEDS – 1st Policy Workshop
2010
2020
2030
2050
7/4/2006
Europe primary energy demand
Europe primary consumption - Reference
3000
2500
Europe primary energy consumption - CCH2
Renew ables
Nuclear
Gas
Oil
Coal
3000
2500
2000
Mtoe
Mtoe
2000
Renew ables
Nuclear
Gas
Oil
Coal
1500
1500
1000
1000
500
500
0
0
2001
DG-RTD/J1/MRV
2010
2020
2030
2050
NEEDS – 1st Policy Workshop
2001
2010
2020
2030
2050
7/4/2006
Carbon emission projections
50
45
40
35
30
25
20
15
10
5
0
2000
Industry
CO2 Emissions - World
50
45
40
35
GtCO2
GtCO2
CO2 Emissions - World
30
25
20
15
10
5
2010
Transport
DG-RTD/J1/MRV
2020
2030
Res-Ser-Agr
2040
2050
Electricity-Transformation
0
2000
2010
Industry
NEEDS – 1st Policy Workshop
Transport
2020
2030
Res-Ser-Agr
2040
2050
Electricity-Transformation
7/4/2006
World hydrogen production
(Reference + H2 cases)
World hydrogen production - CCH2
1200
1000
Mtoe
800
World hydrogen production - Reference
Grid
Renew ables
Nuclear
Gas
Coal
600
400
400
350
300
Grid
Renew ables
Nuclear
Gas
Coal
200
0
2001
2010
2020
2030
2040
2050
Mtoe
250
200
150
World hydrogen production - H2
100
50
1200
0
2001
2010
2020
2030
2040
1000
2050
Mtoe
800
Grid
Renew ables
Nuclear
Gas
Coal
600
400
200
0
2001
DG-RTD/J1/MRV
NEEDS – 1st Policy Workshop
2010
2020
2030
2040
2050
7/4/2006
THANK YOU
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