SIXTH FRAMEWORK PROGRAMME
[6.1]
[ Sustainable Energy Systems]
The Pan EU NEEDS TIMES model:
main results of scenario analysis
Denise Van Regemorter, CES KULeuven
NEEDS Final Conference
RS2a: “Modelling Pan European Energy Scenarios”
Brussels, February 17 2008
CES KULeuven
Scenarios with PEM TIMES
• Focus: the EU energy and environmental
objectives and policy targets
• Energy target: competitiveness and energy
security, through energy efficiency and
enhancement of domestic resources
• Environmental targets: climate and local
pollution
• The scenarios:
• Reference scenario, without specific policies
• CO2 climate policy scenario: -70% in 2050
compared to 2000
• Internalisation of external cost of local
pollution scenario, in association with
climate scenario and renewable target
CES KULeuven
The Reference scenario
Demographic/Economic Development (annual growth rate)
Population
GDP
Private consumption
Industrial activity(energy intensive)
Other industrial activity
Transport activity
Service sector
Energy prices
Import price crude oil
Import price natural gas
Import price coal
[%]
[%]
[%]
[%]
[%]
[%]
[%]
€2000/GJ
€2000/GJ
€2000/GJ
2010/2005 2020/2010 2030/2020 2040/2030 2050/2040
0.4%
0.3%
0.1%
0.0%
-0.1%
2.4%
2.4%
2.1%
2.0%
1.9%
1.6%
1.9%
1.9%
1.9%
1.8%
2.7%
2.3%
1.9%
1.6%
1.3%
2.8%
2.4%
2.1%
1.9%
1.6%
2.4%
2.2%
1.9%
1.7%
1.4%
2.2%
2.4%
2.3%
2.3%
2.2%
2010
2020
2030
2040
2050
7.1
8.3
9.5
10.7
12.4
3.8
5.6
6.9
8.3
9.9
1.8
2.1
2.4
2.8
3.1
Growth rate and international energy price
assumptions, derived from POLES and GEM-E3, as in
the EU Impact assessment
Exogenous evolution in technology development
No specific country policies, except the nuclear phaseout when decided and low CO2tax of 5€/tCO2
EU Primary energy demand increases with 0.4% per
year, while CO2 emissions decrease till 2020 (-0.2%)
but then increase again (+0.5%) because of coal use.
CES KULeuven
Internalisation of external cost
of local pollution in TIMES
• The external cost associated with local
pollution (damage per emission from RS1b
stream) are computed in TIMES:
• either ex-post
• either included in the optimisation process and then
internalized
• So always included in the welfare/system cost (not
the case for CO2)
• With internalisation, synergies between policy
targets (climate and air quality) are fully
exploited in the choices of reduction
measures
• Caveat: the direct abatement options are not
yet extensively modelled.
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Internalisation of external cost
of local pollution in Reference
• Sharp reduction in local pollution
through internalisation
• Only small impact on CO2 emissions
Reduction in emissions compared to reference
80%
70%
60%
50%
NOx
PMx
40%
SO2
30%
NMVOC
CO2
20%
10%
0%
2010
2020
2030
2040
2050
-10%
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Climate policy scenario and
internalisation of external cost
• Climate policy
• Overall EU CO2 target of 70% in 2050
compared to 2000, with -12% in 2020
• Covers only CO2 because other gasses not
yet completely modelled and other gasses
only partly from energy
• No CDM or JI here because the target
takes it already in account (therefore cost
is only cost reduction in EU), neither
burden sharing
• Cost efficiency scenario with full trading in
the EU
• Nuclear phase-out as in reference
• With and without internalisation of
external cost from local pollutants
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Additional pollutant reduction
through internalisation
100%
80%
60%
NOx
PMx
40%
SO2
NMVOC
CO2
20%
0%
2010
2020
2030
2040
2050
-20%
• Mainly an impact at the beginning of the
horizon
• Slightly no impact on CO2 emissions because
of target
CES KULeuven
Impact on Primary energy
(EU30)
Primary Energy (PJ)
90000
80000
70000
Other renew ables
60000
Biomass
50000
Solid fuels
40000
Oil products
30000
Nuclear
20000
Gas
2010
2020
CO270intern
CO270
REF
CO270intern
CO270
REF
CO270intern
CO270
0
REF
10000
2040
• Primary energy consumption decreases:
• decrease in demand for energy services, esp. 2020, after
more similar (around -5%)
• Shift from solids to gas and to biomass in industry and
electricity (role of CO2 capture) but shift to coal derived
fuel in transport (at least till 2030) (maybe linked to
abatement options in model)
CES KULeuven
Welfare Loss
(EU30,% difference compared to reference)
Total discounted w elf are loss
3.00%
2.50%
2.00%
1.50%
1.00%
0.50%
0.00%
REFintern
CO270_EU
CO270intern
REFintern
CO270_EU
CO270intern
-0.50%
Excluding LAP Damages
Including LAP Damages
-1.00%
-1.50%
-2.00%
• internalisation reduces the damage from local
pollution (damage from CO2 not included)
• the joint policy is slightly less costly in terms of
welfare loss (excluding reduction of damage) than
the sum of the losses of both policies separately
• Climate and air quality jointly allows taking into
account the interaction between the pollutants
reduction options (depends on policy in place) CES KULeuven
Climate policy and
renewable/biofuel target
• Scenario
• Climate policy, as in previous
• Renewable target: as defined in the EU
climate energy/climate package) with the
possibility of trade of green certificates
• Biofuel target
Share Renewables
Share Biofuels
Share import in primary (∆ref)
CO270EU
2020 2040
15% 32%
3% 26%
-1% -6%
CO270intern
2020 2040
15% 32%
3% 28%
0% -5%
CO2+target
2020 2040
19% 32%
11% 27%
-4% -6%
CES KULeuven
Renewable and Biofuel
targets
• Results compared to CO2 only
• only significant impact before 2030
• Reduces import dependency
• greater shift towards biomass and
slower penetration of carbon capture
• small impact on cost
• local pollution remain very close, so
still need for internalisation
CES KULeuven
Overview of the integrated
scenarios results
CO2 emissions (∆ref)
Local pollutant emissions (∆ref)
CO270EU
1.17%
0.34%
2020
2040
-11% -57%
-4%
-24%
CO270inter
0.10%
0.03%
2020
2040
-11%
-57%
-39%
-38%
CO270+target
1.29%
0.37%
2020
2040
-11% -57%
-4%
-25%
Share renewables
Share import in primary energy (∆ref)
15%
-1%
15%
0%
19%
-4%
Total discounted welfare loss
annualized loss as % GDP2000
32%
-6%
32%
-5%
32%
-6%
Overall cost remains limited given assumptions of the model
(optimisation, perfect foresight, no adjustment cost)
Reduction of local pollution damage needs appropriate policy
in conjunction of climate policy
Renewable target significant impact before 2030
CES KULeuven
Conclusion
• Mix of options to reach severe energy/climate targets
• Decrease in demand of energy services
• efficiency improvement and shift to low carbon energy at
start
• Renewables, carbon capture, hydrogen with higher target
• Climate policies brings also ancillary benefits by reducing
damage from local pollutants (SO2, NOx, PM,VOC) but
policy aiming directly at better air quality is more
effective (though synergies)
• Climate policy alone is not sufficient for the renewable
target in 2020 and a renewable policy contribute only
slightly to the climate target, more for learning by doing
for future technologies
• Importance of an integrated modelling framework for
climate/energy policy to exploit synergies and trade-offs
• integrated in terms of demand and supply in the energy
system
• geographical integration
• covering all environmental dimensions linked to energy
• Caveats of the modelling framework must be kept in mind
and further development of the technology database is
important
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