10th IAEE European Conference Vienna, 7-10 September 2009

Transcription

1 Avoided Emissions and External Costs in the EU27 Member States up to 23: Study on the Environmental Benefits of Wind Energy Replacing Fossil-Fuel Based Electricity Generation Dr. Hans Auer Energy Economics Group Vienna University of Technology Gusshausstrasse 25-29/373-2 A - 14 Vienna, auer@eeg.tuwien.ac.at The results presented here are based on EEG s contribution to the recently published study Wind Energy - The Facts ( co-financed by DG TREN (European Commission)

2 Agenda 1. Introduction 2. Methodology for the Calculation of Emissions and Externalities of Different Types of Electricity Generation Technologies 3. Status Quo in Each of the EU27 Member States in 27: Total, Avoidable & Avoided Emissions and External Cost of Fossil-Fuel Based Electricity Generation 4. Wind Deployment Scenarios up to 22 and 23: Avoidable & Avoided Emissions and External Costs due to Wind Generation in Each of the EU27 Member States 5. Conclusions, Further Work

3 1. Introduction Analysing External Costs - Valuation Procedures are needed, e.g. Putting a value on a person becoming ill due to pollution (YOLL, VSL) Evaluation of burden put to other receptors (animals, plants, crops, materials) Visual intrusion and acoustic noise caused by a wind turbines Future climate change damage caused by a tonne of CO 2 /SO 2 /NO x /PM 1 Evaluations of externalities: moral dilemmas (valuation of human life) uncertainties due to assumptions consistency risk in fuel cycle analyses Therefore, difficult to fully implement the internalisation of externalities by policy measures and instruments: e.g. tradable permits, emission standards, subsidies, taxes, liability rules, voluntary schemes. Nevertheless, they offer a base for politicians to improve the allocation processes in the energy markets. Internal-, External- and Social Cost of Electricity Generation External Costs of Wind: cent 27 /kwh (i.e. ~2% of average external costs of fossil-fuel based electricity generation technologies External Cost Internal Cost Wind Generation Social Cost of Electricity Generation External Cost Internal Cost Conventional Electricity Generation

4 2. Methodology: Calculation of Emissions & Externalities of Different Types of Electricity Generation Technologies Pioneering Studies: ExternE ( Consistent methodology to assess externalities of electricity generation technologies; work/methodology continuously updated (e.g. New-Ext (24), ExternE-Pol (25), etc.) Prior: Hohmeyer (1988), Friedrich et al (1989), Ottinger et al (199), Pearce (1992) ExternE Methodology: Bottom-up approach; Characterisation of stages of the fuel cycle of a electricity generation technology; Fuel chain burdens identification, i.e. potential burdens/impacts independent of their number, type or size (accounting framework); Most significant burdens/impacts are selected and only their effects are calculated; Then the impact pathway approach proceeds to establish the effects and spatial distribution of the burdens to see their final impact on health and the environment; Finally, the economic valuation assigns the corresponding external costs of the damages induced by each given activity;

5 Impact Pathway Approach: Model EcoSense EcoSense is a wind-rose trajectory model analysing also cross-border effects in Europe SOURCE (specification of site and technology) Emission (e.g. kg/yr of particulates) DISPERSION (e.g. atmospheric dispersion model) Increase in concentration at receptor sites (e.g. kg/yr of particulates) Calculation of emissions of CO 2, SO 2, NO x and PM 1 per kwh from a specific power plant technology at a specific site. Modelling the atmospheric dispersion of emissions (including the formation of secondary air pollutants) to the sites of different receptors, such as humans, animals, plants, crops, materials, etc. DOSE-RESPONSE FUNCTION (or concentration-response function) Impact (e.g. cases of asthma due to ambient concentration of particulates) MONETARY VALUATION Cost (e.g. cost of asthma) Impacts of emissions on the receptors calculated on the basis of so-called dose response functions. Important data on receptors include also data like population density, land use patterns, etc. Finally, the calculated physical damage to a receptor is valued on a monetary scale.

6 Replaceable Segment of Conventional Electricity Generation by Wind Due to its inherent variability, wind generation only can replace specific segments of the load duration curve of conventional generation: Wind generation can replace conventional generation in the intermediate load segment, but can t do so for base-load and peak-load. Therefore, wind can t replace hydro-power (base-load: run-of-river plants; peak-load: pumped-hydro storage plants), nuclear power (base-load)* and also fossil-fuel based peaking plants (e.g. like Open-Cycle Gas Turbines). This leaves mainly fossil-fuel based generation technologies in the intermediate segment being replaced by wind. In detail, these are the following technologies: -> Lignite: 1% replaceable intermediate load (9% base-load not replaceable) -> Hard Coal: 3% replaceable intermediate load (7% base-load not replaceable) -> Mixed Firing: 5% replaceable intermediate load (5% base-load not replaceable) -> Fuel Oil: 1% allocated to replaceable intermediate load -> Natural Gas: 1% allocated to replaceable intermediate load In terms of externalities analyses, wind generation is allocated to an attractive segment of the load duration curve; the fossil-fuel cycle of electricity generation represents the highest values on external effects and external costs (lignite, hard coal, peat, oil and gas), of which gas is the least damaging. * Nuclear: The external costs of nuclear power are impossible to quantify (also ignored in ExternE study). In case of an exident they are / can be infinite for society. Also other unquantifiable externalities of nuclear power exist, e.g. weapons proliferation, terrorist attacks, etc.

7 3. Status Quo on EU27 Member State Level in 27 Fossil Fuel Based Electricity Generation in the EU27 in mixed firing, not specified natural gas, derived gas fuel oil lignite hard coal Ireland TWh/yr

8 Specific Emissions of Fossils 27 Specific Average Emissions from Fossil Fuel Based Electricity Generation in the EU27 in CO2 SO2 NOX Irleand CO2 [g/kwh] 3 2 SO2, NOX [g/kwh] 1

9 Replaceable Fossil Generation 27 Total Fossil Fuel Based Electricity Generation Replaceable by Wind (and other Renewable Technologies) in the EU27 in mixed firing, not specified natural gas, derived gas fuel oil lignite hard coal Irleand TWh/yr

10 Total Wind Generation 27 Annual Wind Generation in the EU27 Member States in Ireland TWh/yr

11 Avoided Emissions by Wind 27 Total Emissions Avoided by Wind in the EU27 in CO2 SO2 NOX Irleand CO2 [kt/yr] 8 6 SO2, NOx [kt/yr] 4 2

12 Specific External Costs of Fossils 27 External (Avoidable) Costs of Fossil Fuel Based Electricity Generation in the EU27 in External (Avoidable) Costs (high) External (Avoidable) Costs (low) Ireland External (Avoidable) Cost [ cent27/kwh]

13 Avoided External Costs by Wind 27 Avoided External Costs by Wind Generation in the EU27 in Total Avoided External Costs by Wind (high) Total Avoided External Costs by Wind (low) Ireland Avoided External Costs [ m27/yr]

14 4. Internalization of External Costs for Different Wind Deployment Scenarios up to 22 and 23 Cornerstones of Scenario Studies: Determination of the total amount of fossil-fuel based electricity generation and corresponding emissions in each of the EU27 Member States in 22 and 23; 2. Determination of corresponding replaceable/avoidable amount by wind energy; 3. Determination of the corresponding replaced/avoided emissions and external costs by wind energy in the three EWEA s wind generation scenarios; Whereas: 1. The (business-as-usual) scenarios on the portfolio of conventional electricity generation are based on the well-known official documents of the European Commission (Capros et al (28)) and Eurelectric (26). 2. In general, the efficiency of new plants within each of the types of fossil-fuel based electricity generation technologies improves with time and, therefore, the specific emissions in year 22 and 23 decrease compared to Due to expected electricity demand increase, the amount of total fossil-fuel based electricity generation in 22 is supposed to be higher than in 27 in almost all EU Member States. However, the significant shares of wind generation in the three different EWEA scenarios are expected to be even higher.

15 Avoidable Emissions by Wind 22 Total Emissions Avoidable by Wind (and other Renewable Technologies) in the EU27 in CO2 SO2 NOX Irleand CO2 [kt/yr] SO2, NOx [kt/yr] 1 5

16 Wind Deployment Scenarios (EWEA) 22 Breakdown of EWEA's Three Wind Generation Scenarios in the EU27 in 22 Annual Wind Generation [TWh/yr] EWEA Low 22 Ireland EWEA Reference 22 EWEA High 22

17 Avoided Emissions by Wind(Reference Scenario) 22 Total Emissions Avoided by Wind Generation (Breakdown of EWEA's Referecence Scenario) in the EU27 in CO2 SO2 NOX Irleand CO2 [kt/yr] SO2, NOx [kt/yr]

18 Specific External Costs of Fossils 22 External (Avoidable) Costs of Fossil Fuel Based Electricity Generation in the EU27 in External (Avoidable) Costs (high) External (Avoidable) Costs (low) Ireland External (Avoidable) Cost [ cent27/kwh]

19 Avoided External Costs by Wind(Reference Scenario) Avoided External Costs by Wind Generation in the EU27 in 22 (Breakdown of EWEA's 22 Reference Scenario) 12 Total Avoided External Costs by Wind (high) Total Avoided External Costs by Wind (low) Ireland Avoided External Costs [ m27/yr]

20 Avoided External Costs by Wind(High Wind Scenario) 23 Avoided External Costs by Wind Generation in each of the EU27 Member States in 23 (Average Values of External Costs in m 27 /yr; Breakdown of EWEA's 23 High Scenario) ; 9167 ; 1123 ; 2669 ; 74 ; 1815 ; 95 ; 212 ; 61 ; 153 ; 1766 ; ; 1524 ; 197 ; 488 ; 1877 ; 51 ; 545 ; 225 ; 12 ; 135 Ireland; 77 ; 2634 ; 113 ; 156 ; 3517 ; 9389 ; 956 Avoided External Costs in this Figure in -million per year in each of the EU Member States!

21 5. Conclusions / Further Work In general, the analysis gives insight to improve allocation processes in the electricity markets and to better understand the future potential for the internalisation of externalities by policy instruments. Treatment of short-term operational effects of variability of wind in the analysis: Included: Part loaded operation of flexible CCGT power plants to balance the system Not included: Merit order effect of wind generation on the wholesale electricity market Further work: 1. Total amount of avoided external costs related to wind energy: comparison with (additional) money (above wholesale market prices) spent for financial support instruments like feed-in tariffs, tradable green certificates, etc. E.g. 27: Wind generation: ~ 4 TWh/yr; FIT: ~ 8 /MWh; EEX: ~ 45 /MWh EEX_27average ~ 3 b 27 /yr spend for FIT for wind onshore in total (i.e. 4 TWh/yr*8 /MWh) ~ 1.4 b 27 /yr additional money spend for wind, but ~ 3 b 27 /yr avoided external costs related to wind Note, this rough calculation neglects pricing in of parts of CO 2 externalities of the fossil-fuel based marginal power plants in the wholesale electricity market price

22 Further work (cont d): 2. Comparision of CO 2 -related part of specific / total external costs with the CO 2 wholesale market price (EUA market price) in order to get an idea on the share of internalized external CO 2 cost by the EUA market price. E.g. 27: Specific emissions of fossil-fuel based power plants: ~ 8 g/kwh Specific external costs of fossil-fuel based power plants: ~ 8 cent 27 /kwh ~ 1 /tc 2 would reflect perfect internalization of external CO 2 costs ~ 2 /tc 2 average EUA price in 27 (i.e. market internalizes only 2%) Note, this rough calculation considers the CO 2 -related indicators only, but the EUA markte price is a European index. In a European context the perfect internalization of CO 2 external costs is not exactly 1 /tc 2 but also in this order of magnitude. 3. Extension of the analyses on avoided emissions and avoided external costs to the entire portfolio of renewable electricity generation (RES-E) technologies.