Long-term evolution of European electricity sector

Transcription

1 WIR SCHAFFEN WISSEN HEUTE FÜR MORGEN A. Singh, R. Kannan :: Energy Economics Group :: Paul Scherrer Institute Long-term evolution of European electricity sector The 37th International Energy Workshop, Gothenburg, Sweden June 218

2 Outline Overview of the European and Swiss electricity sector Research objectives European Swiss TIMES Electricity Model (EUSTEM) Scenario analyses Scenario definition Key assumptions Conclusions Source: TRICKLABOR / Forschungszentrum Jülich GmbH Page 2

3 European electricity sector EU electricity generation mix (215) Status quo 1% 4% Power sector accounts for 25% of the EU CO 2 emissions ~5% of electricity supply is from fossil fuels Long-term (25) goals 12% 48% Fossil Fuels Nuclear Hydro Wind Solar Others EU aims to cut greenhouse gas emissions to 8-95% by 25 26% Power sector should be fully decarbonized EU CO2 reduction by sectors Challenges Nuclear phase out in some countries reduction in base-load generation Integration of renewable & slow development of transmission grid Electricity market integration Source: EU, 217 Page 3

4 Swiss electricity system in the European context Almost zero carbon electricity Well connected to the European electricity network and therefore highly influenced by the EU polices Nuclear phase out & CO 2 mitigation goals DE-CH: 4.4GW CH-DE: 6.1GW FR-CH: 3.2GW CH-FR: 1.7GW AT-CH: 1.GW CH-AT: 1.9GW IT-CH: 3.1GW CH-IT: 5.5GW Source: Winter Net Transfer Capacities (NTC) für 225 «On track Szenario» Swissgrid (215) Szenarioanalyse des PSI (218) Page 4

5 Research objectives and methods Objectives Understand the implication of EU polices on the transformation of the Swiss energy system Explore Europe s long term electricity supply within the framework of the EU policies Methods Least cost electricity supply model - European Swiss TIMES electricity model (EUSTEM) Explorative, what-if scenarios Domain of possible states with Perfect Foresight Today 25 Page 5

6 European Swiss TIMES electricity model (EUSTEM) A technology rich, bottom-up, cost optimization model in IEA s TIMES framework Multi regional model of Europe (national and aggregated regions) Model covers 96% of EU-28 electricity supply with detailed representation of Switzerland Long-term capacity expansion High intra-annual detail (e.g. hourly representation of intra-day and seasonal variabilities (288 time-slices)) 11 regions of EUSTEM Page 6

7 Reference Electricity demands from the 216 EU reference scenario for EU countries and Swiss demand from Business as usual scenario of the Swiss Energy Strategy (inelastic) Include some of the existing EU policies Phase out of nuclear and existing coal power plants without CCS in selected countries Definition of scenarios 22 targets (renewable & CO 2 emissions) CO 2 price from IEA s current policy scenario Climate - Tax (Reference with high CO 2 tax) Reference scenario with high CO 2 tax from IEA s 45 scenario Climate - Cap (Reference with CO 2 cap) 95% CO 2 emissions reduction across the whole EU electricity system by 25 from 199 levels Climate - Cap (Limited CCS) Limit the deployment of CCS by 1%-25% of the Climate - Cap scenario CO 2 Price assumptions Current policy Year Scenario 45 scenario (USD/t) Source: IEA, 215 Page 7

8 Key assumptions and data sources Renewables potentials NREAPs by the European Commission TYNDP ENTSO-E; IEA roadmaps; EU JRC reports Renewables generation profile Reanalysis of the satellites and ground data Simulated generation at economically viable sites Technology learning PSI s Technology Assessment Group, EU JRC,.. Electricity storage options Pumped hydro, batteries, compressed air storages Inter-connectors Limited by cross-border net transfer capacities ENTSO-E 23 grid development plans Energy prices World Energy Outlook (IEA, 215) Renewable energy potential (TWh) Biomass Marine Geo Hydro Wind Solar Technology learning curves Page 8

9 EU electricity supply Capacity (GW) Reference Replacement of coal and nuclear by CCS and RES The CO 2 tax in the Reference scenario is not adequate to keep 22 emission level. 95 GW of storages to accommodate solar PV and wind (5% of total capacity) CAES/Batteries Other Renewables Wind Solar Hydro Gas CCS Gas Coal CCS Coal Nuclear Generation (TWh) Climate-Cap Reference Climate - Cap Reference Climate - Cap Complete replacement of conventional fossil fuel generation by CCS (12 GW by 25) Four-fold increase in solar PV and wind compared to 22 (64% of total capacity) Other Renewables In short term, gas power plants providing flexibility In the long run, storage plays a major role (13 GW of storages provide up to 35 TWh) Wind Solar Hydro Gas CCS Gas Coal CCS Coal Nuclear CAES/Batteries Output CAES/Batteries Input Pump Electricity Input Net Import Demand Page 9

10 Implication of high CO2 tax Reduction in CO2 Emissions from power sector, 199 (%) EU ETS CO2 Price ($/tonne) Cli-Tax Ref Cli-Cap (Left hand axis) (Right hand axis) Applying the high CO 2 tax (18 USD/t) nearly follow the CO 2 targets till 24. However, the tax is not adequate to meet the 25 target of 95% decarbonisation The high CO 2 tax doubles the deployment CCS (relative to Climate-cap scenario) Lower investments required in new renewables generation and storage capacities Residual emissions from CCS limit the further decarbonisation Page 1

11 Power sector in Switzerland and neighboring countries TWh Real Real Real Real Real Austria Switzerland Germany France Italy Climate Cap Scenario By 25 Switzerland invests on gas plant in mid-term; and RES and gas CCS in the long run Role of storage is increasing France meets 5% of its demand by nuclear; and import electricity from Spain Germany and Italy deploy CCS to meet 5% (coal) and 3% (gas) of their respective demands Italy and Germany invest on 53 TWh and 43 TWh of battery storage, respectively Page 11

12 Electricity schedule in Reference scenario European Generation and Marginal Cost Profiles (25) Summer Weekday Winter Weekday Nearly 1 GW excess generation in summer at 12: Gas power plants and battery storages provide flexibility Page 12

13 Electricity schedule in Climate-Cap Scenario European Generation and Marginal Cost Profiles (25) GW Eur/MWh Summer Weekday Winter Weekday ~2 GW excess supply in summer noon while 1 GW in winter Excess solar PV generation leads to sharp drop in marginal costs in summer Higher wind power generation in winter complement the low generation from solar PV There is a need for both diurnal and seasonal storage Page 13

14 Electricity supply in Climate-Cap scenario - Switzerland Swiss Generation Profile for Climate-Cap scenario (25) Summer Weekday Exports Winter Weekday Imports Swiss power sector dominated by solar PV and hydro, with 19 GW of solar PV capacity Dam/pumped hydro and batteries to provide flexibility Hydro power in summer offer flexibility to EU High dependence on seasonal battery storage and imports in winter Page 14

15 Approach Implication of CCS Parametrically* reduced the deployment of CCS in the Climate-Cap scenario With 1% limit*, CCS capacity is 75 GW less than Climate-Cap scenario (12 GW) Reduced availability of CCS would require more investments in solar PV and wind to fill gap in baseload capacity Early investments in solar PV and wind capacity A shift towards gas CCS Change in installed capacity between the Climate-Cap and Climate-Cap (Limited CCS) scenarios Increase the electricity system cost *1% and 25% of the total 18 Gt carbon is made available Page 15

16 Costs of decarbonization Average Cost (Eur/MWh) Reference Climate - Tax Climate - Cap Climate - Cap (Limited CCS) Average cost of electricity in 25 increases considerably (~25%) in the Climate-Cap scenarios compared to the Reference scenario due to stringency of the CO 2 mitigation target The ranges in the marginal costs widen in the Climate-Cap scenarios due high share of RES Marginal Cost -25 (Eur/MWh) Climate - Tax Reference Climate Cap Climate - Cap (Limited CCS) Page 16

17 Conclusions Solar PV and wind power capacity increase more than four-fold until 25 in order to achieve decarbonization targets Gas power plants provide flexibility in the short-/mid-term In the long run (25), about 13 GW of batteries providing up to 35 TWh of electricity storage could be needed to provide flexibility to the European power system Higher CO 2 prices could be a cost effective policy measure to achieve significant reductions in emissions Coal and gas based CCS technologies contribute to cost efficient mitigation (up to 12 GW by 25) With no or limited deployment of CCS technologies requisite early investments in solar PV and wind power capacities Page 17

18 Wir schaffen Wissen heute für morgen Thank you for your attention! Energy Economics: