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Stefan P. SchleicherUniversity of Graz, Austria
Project LINK Meeting 2016
Toronto, 20 October 2016
Deepening structural modeling for
understanding the decoupling of energy
and emissions from economic growth
Or: Why new approaches to energy
modeling are needed
Why energy modeling is facing new challenges
SDGs and Paris Agreement
Global political commitments to limit global warming by limiting the global budget for GHG emissions
The emerging and disruptive energy technologies
Buildings, transport, renewables, business models
Current mainstream models are not able to cope adequately with these challenges
Deepened structural modeling approaches are a way forward
The upcoming energy challenges
and the deficiencies of
mainstream modeling
What might be the impact of the
Paris Agreement?
United States and China revived international climate policy with the Paris Agreement 2015
Both states ratified the Paris Agreement in September 2016
Both states with different motivation
China – fighting local smog
USA – legacy of Obama
The Paris Agreement in a nutshell
Temperature target
well below 2°C, while urging efforts to limit the increase to 1.5°C
Nationally Determined Commitments (NDCs)
all parties report in cycles of 5 years these efforts for mitigation
This translates to radical reductions of global GHG emissions
by 2050, e.g. minus 80 percent in advanced economies
Six countries account for 2/3 of global GHG emissions
0.0
2.5
5.0
7.5
10.0
1990 1995 2000 2005 2010 2015
Bill
ion
to
ns
of
CO
2
USA
EU28
IndiaRussian Federation
Japan
China
What might be the impact of
of breakthrough technologies?
The use and misuse of models for climate policyRobert S. Pindyck, MIT, 2015
The arbitrariness about crucial parameters
Discounting welfare of future generations
Dynamics of technologies
Nested production functions and their elasticities of substitution
Demand functions and their cross-price elasticities
Uncertainty about climate sensitivity
Feedbacks between emissions, temperatures, economic impacts
“Calling Integrated Assessment Models (IAMs) ‘Close to useless’ is generous.”
In a nutshell:
The building blocks for
a deepened structural energy modeling approach
Tier 1:
The physical layer
Thermal functionalities
low temperature (buildings)
high temperature (industry)
Mechanical functionalities
stationary (engines)
mobile (transport)
Specific electric functionalities
lighting
electronics
Step 1:Identify energy servicesThe functionalities of an energy system
Step 2:Consider the full energy value chain
F
Functionalitiesthermal, mechanical
specific electric
ef
Final energysolid, liquid, gaseous
heat, electricity
ep
Primary energyfossils, renewables
nuclear
Step 3:Identify physical interactions with capital stocksFunctionalities and final energy – application technologies
F = TF(ef, KF)
ef = tF(KF)-1∙F
F
Functionalitiesthermal, mechanical
specific electric
ef
Final energysolid, liquid, gaseous
heat, electricity
TF
Applicationtechology
KF
Applicationcapital stock
ef = tT(KT)∙ep
ep = tT(KT) -1∙ef
Step 3:Identify physical interactions with capital stocksFinal and primary energy – transformation technologies
ef
Final energysolid, liquid, gaseous
heat, electricity
ep
Primary energyfossils, renewables
nuclear
T
Transformationtechnology
KT
Transformationcapital stock
g = gfos(distr(ep,fos))∙(1 - sp,fos - sp,res - sp,nuc)∙ep
Step 4:Link emissions to primary energyEmissions intensities depend on fuel mix
ep
Primary energyfossil, renewable
nuclear
distr(ep)Distribution ofprimary energy
g
GHG emissions
Tier 2:
The economic layer
Step 5:Identify interactions with the economic system
Economic System
Energy System
The energy system interacts with the economic system vial the consumption of energy and investments into application and transformation technologies
Economic impacts Improving the thermal structure of buildings
Investment costs per m2 600 €
Annual capital costs 15 €/year
Saved energy per m2 150 kWh/year
Abatement costs 10 Cent/kWh
Energy prices for consumers
Oil 9 Cent/kWh
Gas 7 Cent/kWh
Electricity 20 Cent/kWh
2 percent / year of building stock
Direct investments 6.4 bill €/year
Induced investments 1,8 bill €/year
Tier 3:
Markets and institutions
This modeling design deliberately separates the analysis of structures from mechanisms that generate these structures
Price-determined mechanisms
if prices are relevant
Non-price determined mechanisms
standards and other regulations
Step 6:Add mechanisms for coordination and incentives
Implementing this
deepened structural modeling approach
Switching to a different mindset
16 Losses
27 Mobility
22 Low
Temperature
17 High Temp.
10 Light.,
Engines8 Non-energet.
2015
A new view onthe energy system
So far: Where from can we get plenty and cheap energy
Now: What fordo we need energy
The new buildingsZero or even plus-energy standards
2015 2050
22 Low Temp.
6 Low Temp.
baumschlager eberle
2226 Haus, Lustenau
The new mobilityAccess to persons and goods
2015 2050
27 Mobility
7 Mobility
Integrating all modes of mobility
Business models based on sharing
The new energy generation technologiesHighly efficient transformation and distributions
16 Losses
2015
5
2050
Volkswagen
Vaillant fuel cell
Combined generation of electricity and heat
Distributed generation
Micro and smart grids
The transition to low-energy structuresA low-carbon energy system for 2050 or earlier
16 Losses
27 Mobility
22 Low
temperature
17 High
temperature
10 Light, motors
8 Non-energ.
2015
5 Losses7 Mobility
6 Low temp..15 High temp.
10 Light, motors
7 Non-energ.
2050
10 Fossils
40 Renewables
2050
energyfutures.net
Micro grids – functionalities with highest efficienciesMicro grids – Functionalities with highest efficiencies
