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Transitions Pathways and Risk Analysis for Climate Change
Mitigation and Adaptation Strategies
Decarbonising our Energy System
Transformation pathways, policies and markets: spotlight on Greece
16 November 2018
Alexandros Nikas
Management & Decision Support Systems Lab
National Technical University of Athens (NTUA)
Implementation and consequential risks of a
solar-based transition pathway in Greece:
Insights from a stakeholder-driven analysis
CONTEXT
Motivation
Understanding the dynamics of a solar-based low-carbon transition of the Greek power
sector
Research questions
• What are the potential barriers to and consequences of such a transition?
• Can they be quantified, in terms of impact?
• How can science respond to actual policy demand?
• Can we bridge the infamous science-policy interface?
Carried out by
NTUA UPRC/TEES IBS
TRANSDISCIPLINARY APPROACH
BSAMBusiness Strategy
Assessment Model
MEMODynamic
stochastic general
equilibrium IAM
FCMIdentification of
barriers &
consequences
Policy recommendations
Stakeholder
input
Quantification of set of risks A
Quantification of set of risks B
Results
UNDERSTANDING BARRIERS
IMPLEMENTATION RISKS
• B1. Ongoing recession
• B2. Poor public acceptance
• B3. Unstable regulatory
framework
• B4. High technological costs
• B5. Poor political prioritisation
B1. Ongoingeconomic recession
B2. Publicacceptance
B3. Regulatoryframeworkinstability
B4. Technologicalcosts
B5. Poor politicalprioritisation
SCENARIOS
IDENTIFY ING POTENTIAL CONSEQUENCES
CONSEQUENTIAL RISKS
• C1. Costs for end users
• C2. Poor economic growth
• C3. Investments
• C4. Unemployment
• C5. Tariff deficits (again)
• A prosuming-oriented strategy perceived to have positive socioeconomic impacts
along the envisaged transition. Especially in a high adaptation challenges scenario.
• A centralised generation-based pathway perceived to have negligible socioeconomic
benefits, unless our future’s trends do not shift from historical patterns.
More importantly:
• Potential impact of energy storage and demand flexibility on wholesale electricity
prices and, in turn, electricity costs for end users.
• Potential impact of a wide-scale RES deployment on socioeconomic indices
(economic growth, investments, employment).
KEY STAKEHOLDER F IND INGS
R ISK QUANTIFICATION
BSAMBusiness Strategy
Assessment Model
MEMODynamic
stochastic general
equilibrium IAM
• Energy storage
• Wholesale electricity prices
• Wide-scale RES deployment
• Technological costs
• Economic growth
• Investments
• Employment
ECONOMIC R I SKS (BSAM)
-12
-9
-6
-3
0
3
6
9
12
1 2 3 4 5 6 7 8 9 10 11 12
Pri
ce d
iffe
rence
(€
/mw
h)
Month
Storage market share of 5%
SC01 SC11 SC21
-12
-9
-6
-3
0
3
6
9
12
1 2 3 4 5 6 7 8 9 10 11 12Pri
ce d
iffe
rence
(€
/mw
h)
Month
Storage market share of 10%
SC02 SC12 SC22
• Self-consumption favours
prosumers: they offset the
energy produced with energy
consumed at different times
(abolishing the grid’s role).
• Combined with the limited
flexibility of the Greek power
system, increasing self-
consumption could “force”
generators to bid higher.
• Increasing self-consumption
will increase, for some
months of the year, the price
that everybody else pays.
ECONOMIC R I SKS (MEMO)
• Across all scenarios, the
impact of RES-E deployment
on the Greek economy
becomes positive by 2040.
• In 2050, the Greek economy
would be 1.8% larger in the
RES scenario than in the BAU
scenario; GDP loss never
larger than 0.6% (-1% in high
technological costs scenario)
• Investment goods fuelled by
inflow of labour and capital.
-1,5%
-1,0%
-0,5%
0,0%
0,5%
1,0%
1,5%
2,0%
2017Q
12018Q
12019Q
12020Q
12021Q
12022Q
12023Q
12024Q
12025Q
12026Q
12027Q
12028Q
12029Q
12030Q
12031Q
12032Q
12033Q
12034Q
12035Q
12036Q
12037Q
12038Q
12039Q
12040Q
12041Q
12042Q
12043Q
12044Q
12045Q
12046Q
12047Q
12048Q
12049Q
12050Q
1
% o
f base
line G
DP
Effect of RES Deployment on GDP
-0,1%
0,0%
0,1%
0,2%
0,3%
0,4%
0,5%
0,6%
0,7%
2017Q
12018Q
12019Q
12020Q
12021Q
12022Q
12023Q
12024Q
12025Q
12026Q
12027Q
12028Q
12029Q
12030Q
12031Q
12032Q
12033Q
12034Q
12035Q
12036Q
12037Q
12038Q
12039Q
12040Q
12041Q
12042Q
12043Q
12044Q
12045Q
12046Q
12047Q
12048Q
12049Q
12050Q
1
% b
ase
line G
DP
Effect of RES Deployment on Investment
high tech costs expected tech costs low tech costs
SOCIAL R I SKS (MEMO)
• Larger wages and better job
finding rates encourage
activity and a miners’ shift to
other sectors.
• Increase in demand for goods,
greater real revenue for firms,
increases in real wages,
increases in the number of job
vacancies and higher chances
of unemployed finding a job.
• Temporary decrease in labour
productivity. Size and length
depend on investments/costs.
-0,4
-0,2
0
0,2
0,4
0,6
0,8
2017Q
1
2017Q
6
2017Q
11
2017Q
16
2017Q
21
2017Q
26
2017Q
31
2017Q
36
2017Q
41
2017Q
46
2017Q
51
2017Q
56
2017Q
61
2017Q
66
2017Q
71
2017Q
76
2017Q
81
2017Q
86
2017Q
91
2017Q
96
2017Q
101
2017Q
106
2017Q
111
2017Q
116
2017Q
121
2017Q
126
2017Q
131
2017Q
136
%
Effect of RES Deployment on the Activity Rate
-0,5
-0,4
-0,3
-0,2
-0,1
0
0,1
0,2
0,3
2017Q
1
2018Q
1
2019Q
1
2020Q
1
2021Q
1
2022Q
1
2023Q
1
2024Q
1
2025Q
1
2026Q
1
2027Q
1
2028Q
1
2029Q
1
2030Q
1
2031Q
1
2032Q
1
2033Q
1
2034Q
1
2035Q
1
2036Q
1
2037Q
1
2038Q
1
2039Q
1
2040Q
1
2041Q
1
2042Q
1
2043Q
1
2044Q
1
2045Q
1
2046Q
1
2047Q
1
2048Q
1
2049Q
1
2050Q
1
%
Effect of RES Deployment on the Unemployment Rate
high tech costs expected tech costs low tech costs
CONCLUS IONS
Renewables can facilitate the country’s economic recovery.
Optimising self-consumption is not always beneficial
(if optimality means decreasing the price that consumers without it must pay)
Self-consumption with storage must be evaluated with decreasing costs for storage, new
business models and regulatory frameworks (fair allocation of benefits among all actors)
Acknowledging the limitations of modelling activities
Assumptions outdated or unrealistic (e.g. fresh 2030 RES targets for Greece)
Unit commitment problem, grid inflexibility and technical aspects
Rigidity of wages (sectoral level), barriers of entry, structural changes’ effect to R&D
SCENARIO A SSUMPTIONS
• Installed PV Capacity: {2016: 2,611 MWp}, {2025: 3,900 MWp}, {2035: 5,900 MWp}
• 3 energy storage (in small-scale PV) market share scenarios: 0%, 5%, and 10%
• Large-scale PV 6 : 1 small-scale
• Ceteris paribus (total power demand, fossil fuel prices, water reservoir levels, etc.)
• Elastic job search intensity (small wage changes many workers joining market)
• Electricity demand: linear trend {2020: 53 TWh} {2030: 58.5 TWh}
COST A SSUMPTIONS
• For one 1 MW installation (large-scale solar projects): The average annual
capacity factor is taken to be 22% and the annual efficiency decrease 0.5%.
Furthermore, the operating and maintenance cost is assumed to be equal to
1% of the total investment cost per annum. Investment cost is 1 €/W.
• For small roof-mounted PV systems: The operating and maintenance cost is
assumed to be equal to 2% of the total investment cost per annum. The
average annual capacity factor for rooftop PV installations is 15%. The
annual efficiency decrease has been assumed to be 0.5%. Investment cost is
1.3 €/W.
• The capital cost for onshore wind power systems in Greece is 1.2 €/W. The
average annual capacity factor for interconnected wind RES-E farms is 25%.
A SSUMPTIONS FOR PV/W IND CAPACITY
Year PV Capacity (MW) Wind Capacity (MW)
2016 2,443 1,987
2020 2,900 2,831
2025 3,900 3,675
2030 4,900 4,519
2035 5,900 5,363
2040 6,900 6,207
2045 7,900 7,051
2050 8,900 7,900