Phasing out nuclear power in Europe Rolf Golombek May 2015

Transcription

1 Oslo Centre of Research on Environmentally friendly Energy Phasing out nuclear power in Europe Rolf Golombek May 2015

2 Nuclear power in Europe Mixed picture after Fukushima 2011 Phasing out nuclear vs. on hold vs. plans to increase nuclear capacity EU 2030 nuclear capacity about 20 percent below EU 2009 capacity Effects of a nuclear phase out by 2030 assuming Profitability is the guiding investment principle Long-run perspective: no bottlenecks Competitive markets

3 Nuclear policy in EU member states

4 The impact of lower nuclear capacity Short-run effect of less nuclear capacity Higher electricity price; investment incentives. substitution effects in energy demand (or Japan?) More RES capacity in the long run Increased price volatility? Very low prices in some periods; undermine investment incentives? Numerical model Quantify net effects; how much RES. how much gas power? Investment. production. prices; the entire energy industry

5 Nuclear phase out: main research questions The impact on production of electricity and consumption of energy The impact on the electricity technology mix Robustness Climate policy and instruments CCS Balancing power

6 Outline of talk Numerical equilibrium model of the European energy industry Modeling of wind power and solar power Costs of electricity Scenarios Results phasing out nuclear power Germany EU 30 Robustness

7 LIBEMOD Equilibrium model for energy markets in Europe Application of standard economic theory Private agents vs. governments Model variants Time horizon Market structure Deterministic vs. stochastic Applications Energy market liberalizations Environmental and energy policy New technology CCS Phasing out nuclear power

8 Aune. Golombek. Kittelsen and Rosendahl (2004): Liberalising the Energy Markets of Western Europe. Aune. Golombek and Kittelsen (2004): Does Increased Extraction of Natural Gas Reduce Carbon Emissions? Aune. Golombek. Kittelsen and Rosendahl (2008): Liberalizing European Energy Markets - An Economic Analysis. Golombek. Greaker. Kittelsen. Røgeberg and Aune (2011): Carbon capture and storage in the European power market. Golombek. Kittelsen and Haddeland (2012): Climate change: Impacts on electricity markets in Western Europe. Golombek. Brekke and Kittelsen (2013): Is electricity more important than natural gas? Partial liberalizations of the WE energy markets. Golombek. Kittelsen and Rosendahl (2013): Price and welfare effects of emission quota allocation.

9 LIBEMOD basic structure Energy goods Coal (3). gas. oil. bio (2). electricity Agents Producers of energy End users of energy Traders Governments Countries model country vs. ex. country/region Markets World European Domestic Determination of all quantites and prices in European and global markets. Emissions of CO2 by country and sector

10 LIBEMOD basic structure. cont. Supply Extraction/production of fossil fuels and bio energy (1 time period) Production of electricity (several technologies. 4 time periods) Demand Nested CES 5 levels (households. service. industry. transport) Power plants Transport - nodes International (capacity) Domestic (differentiated user cost)

11 LIBEMOD basic structure. cont. Short run: All capacities are given Long run: Expand capacities if profitable New power plants New international pipes/electricity lines Depreciation

12 LIBEMOD modeling of electricity supply Producer maximizes profits subject to technology constraints Can sell electricity or maintained power capacity to system operator Costs fuel. operational. start-up. maintenance. investment. grid connection Efficiency Calibrated efficiency distributions for pre-existing plants (country. technology) Constant efficiency for new plants (fuel based technologies) Technology constraints Maintained capacity (installed capacity) Annual production of electricity (downtime) Period production of electricity (available net capacity) Renewable electricity Sites differ (hydro. solar. wind)

13 Modeling of wind power Annual average number of wind hours (decreasing function): f() K Annual energy capacity: PM f( K ) K PM Energy capacity in period t: W PM PM t f ( K ) K Cost of investment: inv inv c K

14 Lagrange function of new wind power producer L P y c y c K c K c ( K ) K E YE E o E M PM inv inv gc inv inv t t t t T t T E PM inv E W PM PM E PM K K t yt t f( K ) K yt tk. t T t T t T

15 Calibration of wind power Impose linear function: W Wind hours at best site: a Slope parameter decreases over time Increased access to good sites over time Assumed that in each year 10 percent of max capacity will be available

16 Wind data ** ** Sources: Eerens and Visser (2008). EEA (2009). Hoefnagels et al. (2011a)and Storm Weather Centre. *In the model only 10 % of the potential from Hoefnagels et al. (2011a) has been used. Potential if price of electricity is 70 /MWh. **According to our data sources these numbers should be somewhat lower than 2000 hours. In the LIBEMOD runs we still use 2000 hours to obtain a positive wind power production in the calibration equilibrium.

17 Modeling of solar power Actual use of land for solar power: Actual momentarily capacity: Max momentarily capacity: Solar irradiance per square meter per year: Transformation rate of received energy: Efficient annual solar hours. z: Production sites differ (decreasing function): Solar production in period t: PM S K PM t z( ) K. Kˆ K ( ) Kˆ

18 Lagrange function of solar power producer L P y c y c K c K c ( K ) K E YE E O E M PM inv inv gc inv inv t t t t T t T PM E PM inv E inv ( ) ( ˆ M E S K PM K K K K) t { yt t z ( ) K } Kˆ E yt tk t T t T PM. t T

19 Calibration of solar power PV technology organized as centralised power plants Increased access to land over time 0.5 percent of agricultural land available for solar power in 2050 S Maginal solar irradiance: a Solar irradiance at best site: Solar irradiance at worst site: b. K ˆ S a S K a S b S

20 Solar data Source: All data from the NASA Surface meteorology and solar energy database

21 Cost of electricity

22 Costs of new electricity in 2030 ( 2009/MWh) ,0 22,3 4,2 9,1 6,7 16,5 26,4 14,1 20,7 14,9 25,9 17,3 38,1 6,7 21,1 31,0 51,9 27,8 8,3 19,3 Gas Coal Bio Wind Solar Nuclear Gas CCS greenfield 12,6 26,7 Coal CCS greenfield Fuel costs O&M costs Investment costs Fuel prices: Gas. coal and biomass prices in EU-30 in uranium prices from OECD (2011). Load hours: 70% for coal. gas. nuclear. CCS and bio. Wind and solar based on good locations in Europe (3500 and 2500 hours)

23 Cost of electricity from CCS in 2030 ( 2009/MWh) Sources: ZEP (2011). IEA GHG (2011) and own assumptions. Efficiencies: For greenfield gas 52 % and greenfield coal 37 %. For retrofit an 8 percentage point reduction from «good» existing plants for coal and gas. Fuel prices: Coal and gas prices in EU 30 in 2009.

24 LIBEMOD compared to other sources Investment costs in 2030 in 2009/kW LIBEMOD LIMES/EU Schröder 0 Natural gas Coal Nuclear Solar Wind LIBEMOD (OECD IEA ETSAP IRENA 2012 and own assumptions) EU (2013). EU Energy. Transport and GHG Emissions Trends to 2050 Schröder et al (2013). Data documentation. Current Prospective Costs of Electricity Generation until 2050

25 Scenarios

26 Reference climate policy European Commission proposal (2014) 40 percent GHG emissions reduction relative to 1990 GHG emissions in ETS 43 percent lower than in 2005 GHG emissions in non-ets 30 percent lower than in 2005 Transformed these targets to LIBEMOD LIBEMOD has only emissions of CO2 ETS in LIBEMOD covers the entire manufacturing sector Target for renewable energy in final energy demand 27 percent

27 Scenarios for 2030 Reference 50 % phase-out 100 % phase-out No EU policy Efficient High emissions Nuclear capacities reflect decisions after percent GHG reduction in 2030 relative to Separate targets for ETS and non-ets sectors. Common EU target for renewable energy share of 27 percent. Subsidies to renewable energy in selected countries. Nuclear capacities reduced by 50 percent in 2030 relative to percent GHG reduction in 2030 relative to Separate targets for ETS and non-ets sectors. Common EU target for renewable energy share of 27 percent. Subsidies to renewable energy in selected countries. Complete nuclear phase out by percent GHG reduction in 2030 relative to Separate targets for ETS and non-ets sectors. Common EU target for renewable energy share of 27 percent. Subsidies to renewable energy in selected countries. Complete nuclear phase out by No climate target. No EU target for renewable energy. Subsidies to renewable energy in selected countries. Complete nuclear phase out by percent GHG reduction in 2030 relative to One common emission target for ETS and non-ets sectors. Common EU target for renewable energy share of 27 percent. Subsidies to renewable energy in selected countries. Complete nuclear phase out by percent GHG reduction in 2030 relative to Separate targets for ETS and non-ets sectors. Common EU target for renewable energy share of 27 percent. Subsidies to renewable energy in selected countries.

28 Scenarios for continued Low emissions Cheap CCS. Complete nuclear phase out by percent GHG reduction in 2030 relative to Separate targets for ETS and non-ets sectors. Common EU target for renewable energy share of 27 percent. Subsidies to renewable energy in selected countries. Complete nuclear phase out by percent GHG reduction in 2030 relative to Separate targets for ETS and non-ets sectors. Common EU target for renewable energy share of 27 percent. Subsidies to renewable energy in selected countries. EU renewable target Balancing power Energy efficiency Complete nuclear phase out by percent GHG reduction in 2030 relative to Separate targets for ETS and non-ets sectors. Common EU target for renewable energy share of 35 percent. Subsidies to renewable energy in selected countries. Complete nuclear phase out by percent GHG reduction in 2030 relative to Separate targets for ETS and non-ets sectors. Common EU target for renewable energy share of 27 percent. Subsidies to renewable energy in selected countries. Increased requirement of balancing power. Complete nuclear phase out by percent GHG reduction in 2030 relative to Separate targets for ETS and non-ets sectors. Common EU target for renewable energy share of 27 percent. Subsidies to renewable energy in selected countries. High energy efficiency rates that exactly neutralize the effect of economic growth on demand for energy.

29 National subsidies to new power generation (2009 /MWh) Wind power Solar power Biopower Reservoir hydro power Run-of-river power Austria Belgium Bulgaria Switzerland Cyprus Czech Republic Germany Denmark Estonia Spain Finland France United Kingdom Greece

30 National subsidies to new power generation (2009 /MWh), continued Wind power Solar power Biopower Reservoir hydro power Run-of-river power Hungary Ireland Italy Lithuania Luxembourg The Netherlands Norway Poland Portugal Romania Sweden Slovenia Slovakia

31 Results for EU 30

32 Capacity by technology in EU 30 in 2030 (GW) Other renewable Solar power Wind power Hydropower Bio power Gas CCS Gas power Coal CCS Coal power Oil Nuclear Reference 50 % phase out 100 % phase out

33 Power generation in Europe in 2030 (TWh) Other renewable Solar power Wind power Hydropower Bio power Gas CCS Gas power Coal CCS Coal power Nuclear Reference 50 % phase out 100 % phase out

34 CO 2 price in Europe in 2030 ( /tco 2 ) Reference 50 % phase out 100 % phase out ETS Non ETS

35 Energy consumption in Europe in 2030 (Mtoe) Other renewable Solar power Wind power Hydro power Bio energy Gas Coal Oil Nuclear Reference 50 % phase out 100 % phase out

36 Renewable share in EU 30 in 2030 European Commission proposal: 27 % 29,0 % 28,8 % 28,5 % 28,0 % 27,5 % 27,0 % 27,0 % 27,0 % 26,5 % 26,0 % Reference 50 % phase out 100 % phase out

37 Producer and consumer prices in 2030 ( 2009/MWh or 2009/toe) Reference 50 % phase out 100 % phase out Producer Consumer Producer Consumer Producer Consumer electricity price 40,2 101,5 48,3 111,3 52,1 115,8 gas 136,9 582,5 157,4 597,8 168,5 606,9 steamcoal 113,0 349,3 112,3 419,2 112,3 459,8 cokingcoal 206,9 279,6 207,2 321,6 207,3 344,4 lignite 77,4 154,5 62,5 183,6 53,3 198,5 oil 554,2 1776,7 554,1 1781,2 554,1 1782,6 biofuel 1270,2 1519,4 1268,1 1624,5 1269,9 1540,1 biomass 101,6 197,6 102,1 216,0 113,1 226,2

38 Results for Germany

39 Capacity by technology in Germany in 2030 (GW) Nuclear 2009 Reference 100 % phase out Other renewable Solar power Wind power Hydropower Bio power Gas CCS Gas power Coal CCS Coal power Oil Nuclear

40 Power generation in Germany in 2030 (TWh) Other renewable Solar power Wind power Hydropower Bio power Gas CCS Gas power Coal CCS Coal power Nuclear Reference nuclear 2009 Reference 100 % phase out

41 Net import. producer and consumer prices in Germany in Reference Reference nuclear % phase out Net import Producer price Consumer price Net import Producer price Consumer price Net import Producer price Consumer price Net import Producer price Consumer price TWh /MWH /MWH TWh /MWH /MWH TWh /MWH /MWH TWh /MWH /MWH electricity 12,3 844,2 1048,3 195,9 42,9 130,5 120,9 40,2 127,2 120,0 54,4 144, Reference Reference nuclear % Phase out Net import Producer price Consumer price Net import Producer price Consumer price Net import Producer price Consumer price Net import Producer price Consumer price Mtoe /toe /toe Mtoe /toe /toe Mtoe /toe /toe Mtoe /toe /toe gas 67,3 860,7 1090,7 86,4 140,1 592,9 80,4 134,8 612,1 91,1 171,6 617,8 steamcoal 19,9 694,9 654,8 19,7 113,9 208,3 18,6 114,0 198,8 11,5 113,8 289,8 cokingcoal 4,4 326,2 1159,5 5,1 269,0 341,6 5,1 269,1 330,1 4,8 268,8 405,9 lignite 0,0 325,6 252,9 0,0 92,9 149,9 0,0 93,9 138,7 0,0 71,2 197,3 oil 107,0 0,0 0,0 91,7 554,2 1788,5 91,8 554,2 1786,8 91,4 554,1 1795,4 biofuel 0,0 0,0 0,0 2,5 1270,2 1399,5 2,4 1270,7 1378,8 2,5 1269,9 1523,4 biomass 0,0 0,0 0,0 1,3 108,4 230,4 0,0 104,3 223,2 0,0 118,2 254,4

42 Robustness

43 Capacity by technology in EU-30 in 2030 (GW) Other renewable 1200 Solar power Wind power 1000 Hydropower 800 Bio power Gas CCS Gas power Coal CCS Coal power % phase out No EU policy Efficient High emissions Low emissions Cheap CCS EU renewable target Balancing power Energy efficiency Oil Nuclear

44 Power generation in Europe in 2030 (TWh) Other renewable Solar power Wind power Hydropower Bio power Gas CCS Gas power Coal CCS Coal power Nuclear % phase out No EU policy Efficient High emissions Low emissions Cheap CCS EU Renewable Target Balancing power Energy efficiency

45 CO 2 price in Europe in 2030 ( /tco 2 ) % phase out Efficient High emissions Low emissions Cheap CCS EU Renewable Target Balancing Power 3 67 Energy efficiency ETS Non ETS

46 Energy consumption in Europe in 2030 (Mtoe) Other renewable Solar power Wind power Hydro power Bio energy Gas Coal Oil % phase out No EU policy Efficient High emissions Low emissions Cheap CCS EU Renewable target Balancing Power Energy efficiency

47 Renewable share in EU-30 in 2030 European Commission proposal: 27 % 40% 35% 30% 27.0 % 27.0 % 28.8 % 29.3 % 27.0 % 31.9 % 27.9 % 35.0 % 28.7 % 27.0 % 25% 20% 19.7 % 15% 10% 5% 0% Reference 50 % phaseout 100 % phase-nout EU policy Efficient High emissions Low emissions Cheap CCS EU Renewable Target Balancing Power Energy efficiency

48 Common Renewable feed in tariff in EU-30 in ( 2009/MWh) Reference 50 % phaseout 100 % phase-nout EU policy Efficient High emissions Low emissions Cheap CCS EU renewable target Balancing power Energy efficiency

49 Producer and consumer prices in 2030 ( 2009/MWh or 2009/toe) No EU policy Reference 50 % phase-out 100 % phase-out Efficient High emissions Producer Consumer Producer Consumer Producer Consumer Producer Consumer Producer Consumer Producer Consumer Electricity price Natural gas price Steam coal price Coking coal price Lignite price Oil price Biofuel price Biomass price

50 Producer and consumer prices in 2030 ( 2009/MWh or 2009/toe). continued Low emissions Cheap CCS EU renewable target Balancing power Energy efficiency Producer Consumer Producer Consumer Producer Consumer Producer Consumer Producer Consumer Electricity price Natural gas price Steam coal price Coking coal price Lignite price Oil price Biofuel price Biomass price

51 Welfare

52 Welfare relative to reference scenario (Million 2009)

53 Welfare in 100 % phase-out scenario relative to reference scenario (Million 2009) Producer surplus electricity Producer surplus other Consumer surplus Trader surplus Government net income Sum

54 Welfare in efficient scenario relative to reference scenario (Million 2009) Producer surplus electricity Producer surplus other Consumer surplus Trader surplus Government net income Sum

55 Electricity producer surplus by technology (except for nuclear power) relative to reference scenario (Million 2009) Other Renewable Solar power Wind power Hydropower Biopower Oil power Coal power Gas power

56 Government net income relative to reference scenario (Million 2009) % phase out 100 % phase out Cheap CCS EU renewable target Balancing power

57 Main results Partial impact of a nuclear phase out in Europe on production of electricity and consumption of energy is small Impact depends on climate policy and climate instruments Impact on electricity technology mix is significant More renewable electricity supply in particular wind power and bio power