Climate Policies and Carbon Capture and Storage in the Dutch Power Sector

Transcription

1 Titel van de presentatie Climate Policies and Carbon Capture and Storage in the Dutch Power Sector Machteld van den Broek, University of Utrecht Paul Koutstaal, CPB Paul Veenendaal, CPB

2 Research question Titel van de presentatie How will different international frameworks on climate change policies and policy design options affect welfare? What are the implications for the implementation of CCS in the Dutch power sector? Background Abundance of fossil fuels Increasing role for coal in power generation 2005: 46% coal 2030: 55% coal CCS important technology for cost-effective CO2 reductions Cost reduction requires implementation

3 Outline Work in progress: preliminary results Titel van de presentatie Climate change policies and inefficient policy design International policy scenarios EU energy/climate policies and CCS in the Dutch power sector Preliminary conclusions

4 Inefficient climate change policies (1) Optimal international climate change policy Titel van de presentatie International cooperation Global price for CO2 (emission trading or tax) Incentive for development and diffusion of new technologies such as CCS International governance failure Limited or no international policy coordination Insufficient emission reductions Absent or low CO2 prices Uncertainty about longer-term emission reductions

5 Inefficient climate change policies (2) Titel van de presentatie EU energy policy Specific targets for renewables, energy saving and biofuels Inefficiencies ETS Difference in marginal costs between ETS and non- ETS sectors Entrant allocation and closure rules Fuel specific allocation to entrants in power sector Minimum size for power plants in ETS Different allocation rules between MS Limited auctioning

6 Modeling policy failures / inefficiencies Titel van de presentatie International policy framework Uncertainty on future policies WorldScan X MARKAL Renewable targets X X ETS / non-ets Entrant allocation Fuel specific allocation Lower limit for power plants in ETS X X X X X

7 International policy scenarios: assumptions Titel van de presentatie Two scenarios Grand coalition Impasse Grand Coalition Annex I 23% emission reduction compared to baseline Non-Annex I 5% reduction Emission trading Annex I, no CDM EU ETS versus non-ets Impasse EU 27% reduction compared to baseline ROW small efficiency increase compared to baseline Emissions trading for ETS sectors no CDM

8 Grand Coalition 2020 Targets 2020 compared to baseline 2020 (%) Emissions 2020 compared to baseline (%) Emissions price / tco2 National income % change compared to baseline Annex I EU USA Former Soviet Union Non-Annex I China India World

9 Impasse 2020 Target 2020 compared to baseline 2020 (%) Emissions 2020 compared to baseline (%) Emissions price / tco 2 National Income % change compared to baseline Annex I EU USA Former Soviet Union Non-Annex I China India World

10 Implicit emission taxes in non-ets 2020 Grand Coalition / tco2 Impasse / tco2 Titel van de presentatie Germany Netherlands United Kingdom France Italy Spain New member states 2 1 ETS price 26 46

11 CO2-price /tonne Grand Coalition Impasse

12 Titel van de presentatie Electricity demand growth EU-27 (%) Baseline Grand Coalition Impasse

13 Baseline PC PC with CCS PC retrofitted with CCS IGCC IGCC with CCS NGCC NGCC with CCS CHP plant CHP plant small scale Nuclear Wind Other

14 Grand coalition PC PC with CCS PC retrofitted with CCS IGCC IGCC with CCS NGCC NGCC with CCS CHP plant CHP plant small scale Nuclear Wind Other

15 Impasse PC PC with CCS PC retrofitted with CCS IGCC IGCC with CCS NGCC NGCC with CCS CHP plant CHP plant small scale Nuclear Wind Other

16 CO2 emissions Dutch electricity sector

17 Policy options and the implementation of CCS Titel van de presentatie Share of CCS in power generation GC all power generation 17% 38% 70% GC ETS only (>25 MW) 17% 35% 65% GC high renewables share 12% 34% 51% GC no renewables bound 18% 36% 69% GC high price biomass 14% 26% 41% Impasse 32% 42% 46%

18 Preliminary conclusions and points for discussion Titel van de presentatie Policy failures will increase abatement costs and have consequences for the implementation of new technologies such as CCS Implicit emission price in non-ets >> ETS price High renewables target reduces investments in CCS Impasse scenario shows initially higher CCS investments Designing a cost-effective climate change policy: The devil is in the detail Is there a need for additional policies to stimulate development of CCS and other technologies?

19 Titel van de presentatie Thank you for your attention

20 Titel van de presentatie Investment costs in /kw

21 Fuel costs in /GJ for baseline Titel van de presentatie Other important constraints: No new nuclear plants allowed Not more than 4 GW onshore wind energy

22 Titel van de presentatie Cost of electricity in /MWh

23 Titel van de presentatie CO 2 avoidance cost /tonne CO 2