RTD/J1/MRV NEEDS – 1st Policy Workshop 7/4/2006 Modelling work at EC DG RTD and TREN as a basis for policy making: an overview Maria R. Virdis DG RTD –

RTD/J1/MRV NEEDS – 1st Policy Workshop 7/4/2006

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

DG-RTD/J1/MRV NEEDS – 1st Policy Workshop 7/4/2006

Content

PRIMES modelling approach and scenarios

POLES modelling approach and scenarios

WETO H2 scenarios


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;


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.


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 $/bbl for oil in 2030 (in money of 2005 – in nominal terms, price in 2030 could come close to 100$)


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.


EU-25: Baseline: Final energy demand by fuel

0

200

400

600

800

1000

1200

1400

1990 2000 2010 2020 2030

renewables

solids

electricity/heat

gas

oil

mtoe


EU-25: Baseline: Electricity generation by fuel (in TWh)

0

500

1000

1500

2000

2500

3000

3500

4000

4500

2000 2005 2010 2015 2020 2025 2030

solid fuels

oil

gas

renewables

nuclear


EU-25: Baseline: Renewables share in power generation

0%

5%

10%

15%

20%

25%

30%

2000 2010 2020 2030

geothermal

solar

biomass/waste

wind

hydro


EU-25: Baseline: Energy consumption by fuel and carbon and energy intensity

0

250

500

750

1000

1250

1500

1750

2000

1990 2000 2010 2020 2030

0

25

50

75

100

renewables

nuclear

natural gas

oil

solids

carbonintensity

energyintensity

Carbon and Energy intensity 1990=100mtoe


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.


POLES modelling approach and scenarios


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


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


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


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

0

20

40

60

80

100

120

2001 2030 2050

Mb

l/d

Other Countries

Canada

USA

Russia

Nigeria

Venezuela

Iran

Iraq

UAE

Kow eit

Saudi Arabia

World Non-Conventional Oil Production

0

5

10

15

20

25

30

35

2001 2030 2050

Mb

l/d

USA - Oil ShalesVenezuela - Extra Heavy OilCanada - Tar Sands


Reference case - Definition

Accounts for “minimum” climate policies, differentiated by world regions (exogenous carbon value), according to the presently in-force climate policies

Simulates a relatively constrained access to the oil resources in the Middle-East

Higher endogenous oil prices

0

5

10

15

20

25

30

35

2000 2010 2020 2030 2040 2050

€05/

tCO

2

Europe Rest Annex 1Non-Annex 1

0

20

40

60

80

100

120

1980 1990 2000 2010 2020 2030 2040 2050

$05/

bo

e

Oil

Gas


Reference case – Primary energy consumption

World

2050: 22 Gtoe (10 Gtoe in 2001)

Oil & Gas: 6 & 4 Gtoe resp.

RES + Nuclear: 6 Gtoe

Coal: 6 Gtoe (> ¼)

Europe

2050: 2.6 Gtoe (1.9 Gtoe in 2001)

Oil & Gas: 0.6 & 0.5 Gtoe each

RES + Nuclear: 1 Gtoe

Coal: 0.5 Gtoe (1/5)

0,0

5,0

10,0

15,0

20,0

25,0

2001 2010 2020 2030 2050

Gto

e

Renew ablesNuclearGasOilCoal

0

500

1000

1500

2000

2500

3000

2001 2010 2020 2030 2050

Mto

e



Reference case: Electricity production

World

Increase: 2.8%/year on average

Share of non-fossil electricity: decrease up to 2020 followed by a significant increase (50% in 2050)

Europe

Increase: 1.8%/year on average

Share of non-fossil electricity would reach 60% in 2050

0

1000

2000

3000

4000

5000

6000

7000

8000

9000

2001 2010 2020 2030 2040 2050

TWh


0

10000

20000

30000

40000

50000

60000

70000

2001 2010 2020 2030 2050

TWh



Reference case: Renewable electricity

World

Increase: 5%/year on average 9n 2001-2030, accelerates to 5.7%/year in 2030-2050

Wind potential expanding, and significant emergence of solar power

Europe

Increase: 4%/year on average in 2001-2030, accelerating to 5.3% year in 2030-2050

Wind potential exhausted after 2040

02000

40006000

800010000

1200014000

1600018000

20000

2001 2010 2020 2030 2050

TWh

Biomass

Solar

Wind

Hydro

0

500

1000

1500

2000

2500

3000

2001 2010 2020 2030 2040 2050

TW

h

Biomass

Solar

Wind

Hydro


Reference case: CO2 emissionsWorld

2050: non-Annex 1 = 2/3 world emissions

2050: 2.5 times the 1990 level

Europe

2050: 5% above 1990 level

0

1000

2000

3000

4000

5000

6000

2000 2010 2020 2030 2040 2050

MtC

O2

Electricity - TransformationRes - Ser. - Agr.TransportIndustry

0

5

10

15

20

25

30

35

40

45

50

2000 2010 2020 2030 2040 2050

GtC

O2

ElectricityRes-Ser-AgrTransportIndustry

0

5

10

15

20

25

30

35

40

45

50

1990 2001 2010 2020 2030 2050

GtC

O2

Rest AsiaIndiaChinaMiddle EastAfrica Latin AmericaCISJapan - Pacif icNorth AmericaEurope


Reference case: World oil markets

Oil Trade by Region

-4000

-3000

-2000

-1000

0

1000

2000

3000

4000

2001 2010 2020 2030 2050

Mto

e

Rest AsiaJapan - Pacif icEuropeNorth AmericaMiddle EastAfrica Latin AmericaCIS

Net Imports > 0


Reference case: World gas markets

Gas Trade by Region

-2000

-1500

-1000

-500

0

500

1000

1500

2000

2001 2010 2020 2030 2050

Mto

e

AsiaJapan - Pacif icEuropeNorth AmericaMiddle EastAfrica Latin AmericaCIS

Net Imports > 0


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


WETO H2 scenarios


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.


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)


Transport technologies

A dedicated module representing the behaviour of the road passenger transport demand has been developed.

Three categories of users: Urban use (< 10.000 kms/year)

Normal use ( ~ 20.000 kms/year)

Intensive use (> 40.000 kms/year)

11 generic car technologies are represented: Light Gasoline

Large Gasoline

Light Diesel

Large Diesel

Electric vehicle

Fuel cell H2-fuelled

Hybrid-gasoline fuelled

Hybrid-diesel fuelled

Hybrid-Fuel cell H2 fuelled

Internal Combustion Engine H2 fuelled

Internal Combustion Engine Natural Gas-fuelled


World primary energy demand

World primary consumption - Reference

0

5

10

15

20

25

2001 2010 2020 2030 2050

Gto

e


World primary consumption - CCH2

0

5

10

15

20

25

2001 2010 2020 2030 2050G

toe



Europe primary energy demand

Europe primary consumption - Reference

0

500

1000

1500

2000

2500

3000

2001 2010 2020 2030 2050

Mto

e


Europe primary energy consumption - CCH2

0

500

1000

1500

2000

2500

3000

2001 2010 2020 2030 2050

Mto

e



Carbon emission projections

CO2 Emissions - World

05

10

1520253035

404550

2000 2010 2020 2030 2040 2050

GtC

O2

Industry Transport Res-Ser-Agr Electricity-Transformation

CO2 Emissions - World

0

5

10

15

20

25

30

35

40

45

50

2000 2010 2020 2030 2040 2050G

tCO

2

Industry Transport Res-Ser-Agr Electricity-Transformation


World hydrogen production (Reference + H2 cases)

World hydrogen production - Reference

0

50

100

150

200

250

300

350

400

2001 2010 2020 2030 2040 2050

Mto

e

GridRenew ablesNuclearGasCoal

World hydrogen production - H2

0

200

400

600

800

1000

1200

2001 2010 2020 2030 2040 2050

Mto

e


World hydrogen production - CCH2

0

200

400

600

800

1000

1200

2001 2010 2020 2030 2040 2050

Mto

e



THANK YOU

e-mail

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Documents

RTD/J1/MRV NEEDS – 1st Policy Workshop 7/4/2006 Modelling work at EC DG RTD and TREN as a basis for policy making: an overview Maria R. Virdis DG RTD –