Assessment of European RES policy pathways beyond 2020 results of the quantitative assessment of RES policy pathways beyond 2020

Transcription

1 Authors: Gustav Resch1, Pablo del Rio2, Mario Ragwitz3, Sebastian Busch1, Andre Ortner1 1Energy Economics Group, Vienna University of Technology, Austria 2Consejo Superior de Investigaciones Científicas, Spain 3Fraunhofer Institute for System and Innovation Research, Germany Contact: Web: beyond 2020 results of the quantitative assessment of RES policy pathways beyond 2020 This presentation reflects research conducted within the European project Design and impact of a harmonised policy for renewable electricity in Europe IAEE New York, 18 June 2014 Slide 1

2 Content (1) Introduction Challenges & policy options beyond 2020 and our contribution to find a suitable ways forward (the beyond2020 project) (2) Method of approach model-based assessment of beyond 2020 (3) Results (4) Conclusions IAEE New York, 18 June 2014 Slide 2

3 (1) Introduction a closer look beyond 2020 Our agenda for tomorrow à Tackle the energy & climate problem for which renewable energies are the key mitigation option Source: Energy Roadmap 2050 (EC, DG ENER, 2011) RESshare[%] PRIMES Reference PRIMES High RES 2011 PRIMES Energy Efficiency PRIMES Diversified Supply Energy Roadmap IAEE New York, 18 June 2014 Slide

4 (1) Introduction a closer look beyond 2020 A RES strategy beyond 2020 Several policy dimensions relate to the debate on a future RE strategy for Europe beyond These include: RE support instruments and financing aspects related to that, Electricity market design and impacts on market functioning arising from an enhanced use of (variable) renewable energy sources, Sustainability concerns, in particular related to the use of biomass, Cooperation with third countries, in particular imports (to the EU) of biofuels and solid biomass as well as renewable electricity (RES-E). Generally, future policy choices related to above dimensions might show a more national orientation or could reflect further consolidation and cooperation among Member States, whereby the ultimate extent would be a harmonised approach across the EU. IAEE New York, 18 June 2014 Slide 4

5 Design and impact of a harmonised policy for renewable electricity in Europe the project at a glance Overview on the IEE project beyond2020 Look more closely beyond 2020 by designing & evaluating feasible pathways of a harmonised European policy framework to support RES in general & RES-E in particular Contribute to the forming of a European vision of a joint future RES policy framework in the mid- to long-term Project coordination: Energy Economics Group (EEG) Vienna University of Technology Contact: Web: beyond2020@eeg.tuwien.ac.at beyond2020 aims to provide the analytical base for the design, evaluation and implementation of policy proposals for a harmonisation of RES support in Europe. The work included quantitative (costs/benefits with Green-X) & qualitative assessments, focussing on legal, strategic, political aspects and electricity market integration. The final outcome is a finely tailored policy package, offering: A concise representation of key outcomes and a detailed comparison of pros and cons of each policy pathway Detailed roadmaps for practical implementation of assessed policy pathways Outline of a legal draft for the implementation of key provisions of two recommended policy pathways Contract number: IEE/10/437/SI , project duration: from 07/2011 to 12/2013, Update: 31st of December 2013 Slide 5

6 (2) Method of approach Key assumptions / approach RES policy assessment conducted with Green-X model Assumptions on conventional reference system, energy and carbon prices as well as energy demand based on PRIMES high renewables case (EC, Energy Roadmap, 2011) Final modeling incorporates outcomes of the assessment of long-term RES potentials as well as of grid-related & electricity market aspects, in particular incl. market values for variable RESe RES deployment target for 2030: 31.2% PRIMES Reference PRIMES High RES 2011 RESshare[%] PRIMES Energy Efficiency PRIMES Diversified Supply Source: Energy Roadmap 2050 (EC, DG ENER, 2011) IAEE New York, 18 June 2014 Slide

7 (2) Method of approach - the Green-X model and approach Mid-term (up to 2020) realisable potentials in year n & corresponding costs for RES at country level by RES technology (subdivided into several bands) Potential Cost (efficiency) n+1 costs band 1 Technology diffusion ( S-curve ) (non-economic barriers by technology/country) Technological change ((global) learning curves by technology) costs band 2 band 3 potential The Green-X approach: Dynamic cost-resource curves Realisable yearly potentials in year n Energy policy (energy prices, RES support) potential & e.g. Feed-in tariffs, Investment incentives, Tendering schemes, Quotas with tradable green certificates Deployment in year n and corresponding costs & benefits IAEE New York, 18 June 2014 Slide 7 PFIT costs potential a detailed energy policy representation

8 (2) Method of approach Overview on RES(-E) policy pathways beyond2020 Degree of harmonisation Characterisation Instrument FIT (feed-in tariff) FIP (feed-in premium) QUO (quota system with uniform TGC) QUO banding (quota system with banded TGC) ETS (no dedicated RES support) TEN (Tendering for large scale RES) Full EU target One instrument Medium EU target One instrument Additional (limited) support allowed Soft EU & National targets One instrument MS can decide on various design elements incl. support levels 1a 2a 3a 4a 5 6 Sensitivity to 7 1b 2b 3b 4b 1c 2c 3c 4c (national support, but harmonisation for selected technologies) Minimum With minimum design standards for support instruments No No minimum design standards for support instruments EU & National targets Cooperation mechanism (with or w/o increased cooperation) 7d Reference with minimum design criteria (national RES support with increased cooperation and with minimum design standards) 7 Reference (national RES support w/o increased cooperation and w/o minimum design standards) IAEE New York, 18 June 2014 Slide 8

9 (2) Method of approach Overview on RES(-E) policy pathways beyond2020 Selected key cases used in follow-up comparison Degree of harmonisation Characterisation Instrument FIT (feed-in tariff) FIP (feed-in premium) QUO (quota system with uniform TGC) QUO banding (quota system with banded TGC) ETS (no dedicated RES support) TEN (Tendering for large scale RES) Full EU target One instrument Medium EU target One instrument Additional (limited) support allowed Soft EU & National targets One instrument MS can decide on various design elements incl. support levels 1a 2a 3a 4a 5 6 Sensitivity to 7 1b 2b 3b 4b 1c 2c 3c 4c (national support, but harmonisation for selected technologies) Minimum With minimum design standards for support instruments No No minimum design standards for support instruments EU & National targets Cooperation mechanism (with or w/o increased cooperation) 7d Reference with minimum design criteria (national RES support with increased cooperation and with minimum design standards) 7 Reference (national RES support w/o increased cooperation and w/o minimum design standards) IAEE New York, 18 June 2014 Slide 9

10 (3) Results Selected key cases Results: RES pathways beyond 2020 results (on deployment) RES -Eshare [% - shareingroselectricitydemand] 60% 55% 50% 45% 40% 35% 30% 25% FIT medium FIP soft QUO full QUO-banding medium ETS only ETS only (default CO2 price) TEN REF min criteria REF EnergyproductionfromnewRES( -E)(instaled 2021to2030)in2030[TWh] 2,500 2,250 2,000 1,750 1,500 1,250 1, New RES FIPmedium FITsoft QUOful ETSonly New RES-E TEN REFmincriteria REF 20% ETSonly(defaultCO2price) QUO-bandingmedium Comparison of the resulting RES(-E) deployment over time for all RES-E (left) by 2030 for new RES(-E) installations only (from 2021 to 2030) (right) in the EU-27 for selected key cases IAEE New York, 18 June 2014 Slide 10 Source: beyond2020 project (2013) à à Without dedicated support ( ETS only ), RES-E deployment would stagnate after 2020, reaching a share of RES-E of 42.0% (44.6% with higher carbon prices) by Corresponding figure for RES total: RES share in gross final energy demand of 21.2% (26.3% with higher carbon prices) by 2030

11 (3) Results Results: RES pathways beyond 2020 results (on deployment) *if carbon action is taken seriously: 3,390 TWh Case: ETS only Energy production from RES by 2030 [TWh]: 2,728 TWh Biofuels 0.3% * RES-E imports non-eu 1.7% 19%...48% more RES by 2030 (in total) Case: Reference case with minimumg design criteria Energy production from RES by 2030 [TWh]: 4,050 TWh Biofuels 7.2% RES-E imports non-eu 1.8% RES-heat RESelectricity 47% 116% 44.3% 53.7% more new RES (installed 2021 to 2030) by 2030 Breakdown of energy production from RES by 2030 in the EU27 for the ETS only case (left) RES-heat 39.6% RESelectricity 51.4% for the case of Reference case with minimum design criteria / intensified RES cooperation (right) IAEE New York, 18 June 2014 Slide 11 Source: beyond2020 project (2013)

12 (3) Results Selected key cases Results: RES pathways beyond 2020 results (on deployment) ElectricitygenerationofnewRES -E instalations(2021to2030)in2030[twh] FIT medium FIP soft QUO full QUO-banding medium ETS only (default CO2 price) ETS only* TEN REF min criteria REF Hydrolarge-scale Hydrosmal-scale Solidbiomas Geothermal electricity Photovoltaics Solarthermal electricity Tide&wave Windonshore Windofshore Biowaste Biogas Technology-breakdown of electricity generation by 2030 from new RES-E installations only (from 2021 to 2030) in the EU-27 for selected key cases IAEE New York, 18 June 2014 Slide 12 à à à Onshore wind energy as key option (even in the ETS only cases) Among all other cases than ETS only generally only small differences are expected, as a moderate-to-ambitious RES target requires a larger contribution from the various available RES-E options. More expensive (novel) RE technologies do not come into play in the case of technology-neutral incentives (QUO full). Gap in deployment would be compensated by an increased penetration of Source: cheap-to-moderate beyond2020 project RES-E (2013) options (onshore wind and biomass co-firing)

13 (3) Results Selected key cases Results: RES pathways beyond 2020 results on deployment, cost & expenditures Yearlysuportexpendituresfor newres -Einstalations(2021to2030) onaverage(2021to2030)[bilion ] % 5% 10% 15% 20% 25% 30% 35% Comparison of deployment & support expenditures for new RES-electricity installations only (from 2021 to 2030) in the EU-27 for selected key cases Note: *possible increase of consumer expenditures due to higher electricity prices (related to merit order effect on carbon and electricity market) Deployment of new RES-E installations (2021 to 2030) in 2030 [% - share in gross electricity demand] FIT medium FIP soft QUO full QUO-banding medium ETS only (default CO2 price) ETS only* TEN REF min criteria REF 55% cost increase for RES-E in the case of a harmonised uniform quota system compared to a harmonised FIT system (31% for RES in total) IAEE New York, 18 June 2014 Slide 13 Source: beyond2020 project (2013)

14 (3) Results All assessed cases Results: RES pathways beyond 2020 results on costs & expenditures Yearlysuportexpendituresfor newres -Einstalations(2021to2030) onaverage(2021to2030)[bilion ] Note: *possible increase of consumer expenditures due to higher electricity prices (related to merit order effect on carbon and electricity market) FIT fullmediumsoft (Path 1 a- b-c) FIP fullmediumsoft (Path 2 a- b-c) QUO fullmediumsoft (Path 3 a- b-c) QUObanding fullmediumsoft (Path 4 a- b-c) ETS only ( * ) (Path 5) TEN (Path 6) REF with and w/o min criteria (Path 7 -d) FIT full FIP full QUO full QUO-banding full FIT medium FIP medium QUO medium QUO-banding medium FIT soft FIP soft QUO soft QUO-banding soft ETS only (default CO2 price) ETS only* TEN REF min criteria REF Yearly average (2021 to 2030) support expenditures for electricity generation by 2030 from new RES-E installations only (from 2021 to 2030) in the EU-27 for all assessed key cases IAEE New York, 18 June 2014 Slide 14 Source: beyond2020 project (2013) How does the degree of harmonisation affect the economic performance of policy instruments? à à Remarkably, the type of instrument chosen plays a more prominent role than the degree of harmonisation. Only small differences are applicable among the variants by type of instrument.

15 (3) Results All assessed cases Indicatorsoncost&benefitsofnew RES -Einstalations(2021to2030) - Indicatorsoncost&benefitsofnew RESinstalations(2021to2030) - yearlyaveragevalues(2021to2030) yearlyaveragevalues(2021to2030) [bilion ] [bilion ] Results: RES pathways beyond 2020 costs and benefits Avoided fossil fuels Avoided fossil fuels IAEE New York, 18 June 2014 Slide 15 Avoided CO2 emissions Avoided CO2 emissions Capital expenditures Capital expenditures Additional generation cost Additional generation cost Support expenditures Support expenditures Source: beyond2020 project (2012) FIT medium FIP soft QUO full QUO-banding medium ETS only (default CO2 price) ETS only* TEN REF min criteria REF Note: *possible increase of consumer expenditures due to higher electricity prices (related to merit order effect on carbon and electricity market) FIT medium FIP soft QUO full QUO-banding medium ETS only (default CO2 price) ETS only* TEN REF min criteria REF Note: *possible increase of consumer expenditures due to higher electricity prices (related to merit order effect on carbon and electricity market) Comparison of (yearly average) costs & benefits of new RES-E installations (2021 to 2030) in absolute terms (monetary expression) - for RES in the electricity sector (top) - for RES in total (bottom) for selected key cases

16 Conclusions The RES directive (Directive 2009/28/EC) lays the ground for the RES policy framework until 2020 but a strategy and clear commitment to, with dedicated support for RES beyond 2020 is of need (if RES shall deliver what is expected) Ignore simplistic approaches for RES policy harmonisation! a harmonisation of RES support based on simplistic policy options offering uniform support e.g. via a uniform RES certificate trading cannot be recommended (- for the 2020 and the 2030 perspective -). Final modelling outcomes have shown that several other show a similar performance on costs/benefits for the post-2020 period ranging from full to soft/minimum harmonisation, including feed-in premiums/tariffs and quotas with banding as well as keeping strengthened national support but with intensified coordination /cooperation (and with or w/o complementary harmonised tenders (for large-scale RES)). Cooperation & coordination among Member States is beneficial and required to tackle current problems/challenges in RES markets IAEE New York, 18 June 2014 Slide 16

17 Thanks for your attention! Further information: Contact Gustav Resch phone: Energy Economics Group (EEG), Vienna University of Technology Gusshausstrasse 25-29/E370-3, A-1040 Vienna, Austria IAEE New York, 18 June 2014 Slide 17