Scenario development for policy analysis: ongoing experiences in Europe and the Netherlands

ETSAP 24-25 November 2004, Firenze

Koen Smekens, Hilke Rösler

ECN Policy Studies, The Netherlands

Cascade Mints2

Current activities

• Major EU projects- Cascade Mints- HyWays- NEEDS- EFDA

• Wide variety of policy questions & issues to be covered

• Involving MARKAL/TIMES analytical work and model extensions

Cascade Mints3

Cascade Mints - Introduction

• Stands for : CAse Study Comparisons And Development of Energy Models for INtegrated Technology Systems

• FP6 project, DG Research• Part 1: Modelling possible configurations of a

hydrogen economy and using models to study its prospects

• Part 2: Medium- and Long-term policy scenarios focusing on the impact of renewables, nuclear and CCS (follow up of the ACROPOLIS project)

• Partners: 15 institutes in Europe, US, Canada and Japan• January 2004-December 2006

Cascade Mints4

Cascade Mints

Modelling possible configurations of a

hydrogen economy and using models to study its

prospects

Joint case studies on policy issues

with operational

energy models

PART 1 PART 2

Coordinator: NTUA Coordinator: ECN

Administrative Coordinator: NTUA

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CM part 1 - objectives

• Extensive model development • Technological scenario analysis:

Aim to identify conditions under which hydrogen can transform the energy system with particular emphasis on aspects of the transition.

• Hydrogen technology dynamicsExamine conditions under which favourable developments in the technical and economic characteristics of hydrogen related technologies (both on the demand and supply side) may materialise.Incorporate relationships in the models to equip them with the ability to perform R&D policy simulations in a dynamic environment

• Stochastic evaluation of hydrogen economy prospectsSystematic evaluation of the risks (and opportunities) facing the evolution of the hydrogen economy: assessment as to how likely different paths towards it are.

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CM Part 2 – objectives

• Investigate the role of different policies in improving security of supply, reducing GHG emissions and fostering technological innovation- What will happen without intervention?- What room is available for policy intervention? - Show consequences (energy mix, emissions, SoS, cost)- Analyse trade-offs and synergies on different policy issues

• Enhance the communication between model experts and policy-makers

• Build consensus among model experts

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CM Part 2 – classification of models

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CM Part 2 – background and baseline analysis

• Long term challenges for the energy sector- Environmental impacts- Security of supply- Acceptable costs- Global interactions

• Key drivers for change- Economical growth- Availability of resources- Technological development- Infrastructure- Geopolitical situation- Policies- Preferences

• Harmonization of drivers- IPCC B2 storyline- Energy prices (oil, coal, gas) form

POLES- Economic growth- European policies (present policies

valid for 2003-2012, abandoned afterwards but CO2 tax of 10€/ton after 2012)

• Analysis of outcome (Europe, world)- Primary energy demand- Security of supply- Emissions

Selected baseline results

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CM Part 2 – mix primary energy consumption

2050

76%

6%

18%

75%

4%

21%

Fossil fuels

Nuclear

Renewables

Western Europe

World

Energy mix remains dominated by fossil fuels, but mix changes

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CM part 2 – percentage of world oil production from Middle East

0%

10%

20%

30%

40%

50%

60%

70%

80%

2000 2010 2020 2030 2040 2050

Message GMM Poles DNE21+ PACE

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CM Part 2 – Import dependency Europe

• Oil • Gas

0%

20%

40%

60%

80%

100%

2000 2010 2020 2030Imports (Russia and FSU)

Imports (Africa, Latin America, Middle East)

Natural gas production (Western Europe)

0%

20%

40%

60%

80%

100%

2000 2010 2020 2030

Oil production Oil imports

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CM Part 2 – global CO2 emissions

0

10

20

30

40

50

60

70

2000 2010 2020 2030 2040 2050

[Gton]

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CM Part 2 – Key messages for Europe in 2030

• Energy consumption grows with some 20-25% in 2000-2030; dominated by fossil fuels- Increasing import dependency (up to 70%)

• Uncertain: Power generation mix- Growers: natural gas and renewables (wind, biomass)- Decrease: oil- Large variety in the prospects for coal technologies and nuclear

power - New Member States: increasing contribution from natural gas and

renewables at expense of coal

• Share of electricity in final demand increases; fastest growth in new Member States

• Mixed message on CO2 due to increasing importance of natural gas

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CM Part 2 – Renewables case study

• Focus: Europe, but world models contribute- Two approaches - Europe 2020, world 2050- Major scenario assumptions: EU targets (12 and 20% of primary

energy consumption in 2020)- World models: subsidy scheme (ct/kWh green electricity)- Use models according to strength- Several sub-questions

• Technological developments

• Impact on other important issues: employment, SoS, …

• Interregional dependence: spill-overs, relative growth, …

• Report and policy brief in January 2005

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CM Part 2 - forthcoming case studies

• Nuclear case- 2 versions: phase out in OECD and global technical break-

through, both under sever climate constraints (100€/ton CO2)

• CO2 capture and storage- No outline yet

• Hydrogen economy- No separate case (=CM part 1), but synergy analysis

• More information Cascade Mints- http://www.e3mlab.ntua.gr/cascade.html

HyWays

Building a fully validated and accepted

H2-roadmap for Europe

HyWays18

Background - Objectives

• The transition towards a hydrogen based society is the starting point- Simulation models show usually “no hydrogen” (short

term benefits vs. long term profits)- Boundary of future hydrogen society have to be set

by the Scoping Report

• HyWays has to show that the transition towards a future hydrogen society is preferable- Emission impacts, employment effects, impacts on

GDP- Indicate the conditions (policy measures, energy

prices, CO2 contstraints, etc.)

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Scope and level of ambition

Scoping report• Ambition has to be in line with US, Japan• Consensus on forehand on essential project

characteristics (Industry, Institutes, MS, EC)- Scenario parameters (energy prices, energy

demand,)- Depletion of natural resources (e.g. natural gas bij

20??)- Policy framework (550 ppm level in 2050, emission

trading, etc.)- Time horizon (2020, 2030, 2050)

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Major research questions

Penetration of hydrogen as an energy vector for mobile and stationary applications;- Development of penetration rate and investment (additional)

costs of hydrogen relevant technologies - Pathway analysis, including identification of critical actors

and key changes and plausible hydrogen production routes matched to feasible timeliness

- Changes in primary and final energy demand (security of supply)

- Blueprint of a possible future hydrogen based society (stationary and mobile)

- Emission analysis indicating achievable reductions in greenhouse gasses and pollutant emissions

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Major research questions (2)

• Demands on infrastructure- Estimated costs, capital investments and timescales

for infrastructure built-up

• Identification of different (most promising) regional markets for a hydrogen economy in Europe and development of regional market strategies

• Development of industry R&D strategies for the creation of hydrogen economies; identification key technologies and needs for further research (R&D)

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Major research questions (3)

• Analysis of economical (i.e. subsidies, taxation) and legal conditions (i.e. regulatory policies) under which a hydrogen economy can become competitive in order to derive a European set of recommendations - Impacts on GDP, EU balance of trade, economic

structure, employment effects, private vs. public investments, security of supply and social justice

- Impacts of introducing general policy instruments such as a CO2-tax, emission trading etc.

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Characteristics

• Many partners (>30): Institutes and Industry (co-funding), MS/regions

• Start: 1 April 2004• Time frame (2 x 18 months)• Phase 1: NL, Gr, Nw, It, Fr, D• Phase 2: other member states of EU-25

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Objectives

• Valid storylines, taking into account all kinds of barriers and opportunities have to be build- Models can address energy demand,

penetration rates, emission impacts etc., but not country specific infrastructure built up or niche market development

- Hybrid approach (including actor analysis) is needed

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General Framework

Hybrid approach• Address impact on

- micro level (technology) – E3-database and Markal - meso level (sectoral level) – ISIS I/O-model- macro level (national level) – GEM-E3- emission impacts – based on COPERT III

• Technical, social, economic, political/institutional aspects have to be taken into account

• Multi-level- Micro level – cost/benefit ratio (pay back time)- Macro/meso level – cost effectiveness (€ / tonne CO2)

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Hybrid approach

Hydrogen chains

Road map & action plan

Models

TransitionAnalysis

(regions profiling&

system dynamics)

Markal

Energy system analysis

(Focus: Energy System)

ISIS

I/O Analysis

(Focus: All industry

branches)

GEM E3

Equilibrium model

(Focus: Energy system and

Industry)

H2-Scenario results

- Physical & monteary

demand flows Energy

consumption

Scenario Analysis

(Experts)

Regions profiling

Framework

Energy balance

Scenarios

Scenario assumptions

H2-Scenario

results

Selected

Technologies

Environmental Models

Emissions

Production level

Energy consumption

CO2.Emissons

WP3 Task 1

WP3 Task 2

WP3 Task 3

WP3 Task 4,5

WP3 Task 6

Data collection

WTW and STU analysis

Technology

specific

information

E3 database

WP1 & WP2

ISTICSTMECN

LBSTCEAECNISIZEWENEA

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Markal

Energy system analysis

(Focus: Energy System)

ISIS

I/O Analysis

(Focus: All industry

branches)

GEM E3

Equilibrium model

(Focus: Energy system and

Industry)

H2-Scenario results

- Physical & monteary

demand flows Energy

consumption

Scenario Analysis

(Experts)

Regions profiling

Framework

Energy balance

Scenarios

Scenario assumptions

H2-Scenario

results

Selected

Technologies

Environmental Models

Emissions

Production level

Energy consumption

CO2.Emissons

WP3 Task 1

WP3 Task 2

WP3 Task 3

WP3 Task 4,5

WP3 Task 6

Data collection

WTW and STU analysis

Technology

specific

information

E3 database

WP1 & WP2

Modelling framework

HyWays28

Transition analysis

Analytical framework: using elements from transition methodology

Key regime changes• Technology and economics • Consumer behaviour

Critical actors• Actors opposing• Actors who benefit• Neutral actors

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Example of topological input

HyWays31

H2 chains

• Member state specific hydrogen chains

• max 6 pathways per MS

• Stationary and mobile options

• Modelling of infrastructure (lumpy investment approach)

GAS

Decentral GH2

5 km pipeline

GAS

Gas network

FS CGH22.0 MPa, 457 kW

Central LH2

FS LH2438 kW

Central GH2

50 km pipelineCentral GH2

WINDELC

Biomass

Coal

De-central LH2

Central SMR844 MW

Centr. Electr.2.4 MW

Coal gasific.844.9 MW

5 km pipeline

Biomass gasif.Katofsky

Distr.decentrGH2

GH2 for FS

GH2 for H/CDecentr. SMR

960 kW

Exist. Techn.

CHP FCH2

FCLH2/ICELH2Truck 40tEuro IV

Liquefier30 bar, 300 MW

SMR Pernis

GAS

HyWays32

Demand regionalisation

• Regionalisation of end use demand in building sector (commercial, service and residential) and transport sector

0

1000

2000

3000

4000

5000

6000

7000

8000

spac

e he

at

warm

wate

r

cook

ing

Light

ing

refri

g./fr

eezer

washi

ng m

achi

ne

tum

ble d

rier

dish

washe

r

othe

r app

lianc

es

PJ

fina

l

heat

electr.

gas

petrol. prod.

wood/solid

coal

0

50

100

150

200

250

300

350

spac

e hea

t

warm w

ater

cook

ing

Lightin

g

refrig

./fre

ezer

washin

g mac

hine

tum

ble d

rier

dish

washe

r

othe

r app

lianc

es

PJ

final

heat

electr.

gas

petrol. prod.

wood/solid

coal

HyWays33

Regionalisation – results (1)

0

500

1000

1500

2000

2500

3000

3500

4000

4500

1990 2000 2010 2020 2030 2040 2050

P

J F

inal

SF

D

MF

D

N

ew

otherheatelcgaspetrol. Prod.woodcoalotherheatelcgaspetrol. Prod.woodcoalotherheatelcgaspetrol. Prod.woodcoal

0

50

100

150

200

250

300

350

1990 2000 2010 2020 2030 2040 2050

P

J F

inal

S

FD

M

FD

New

Residentialspace heating/coolingMiddle WEU and NL

HyWays34

Regionalisation – results (2)

Space heating/coolingCommercial/service WEU and NL

0

1000

2000

3000

4000

5000

6000

1990 2000 2010 2020 2030 2040 2050

PJ

final

Italy

Greece

South WEU

France

Germany

NL

Middle WEU

Norway

North WEU

0

100

200

300

400

500

600

1990 2000 2010 2020 2030 2040 2050

PJ

final

heat

elc

gas

petrol. Prod

wood

coal

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More information

• www.HyWays.de