Evaluating the Mexican National Strategy of Climate Change.

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1 Evaluating the Mexican National Strategy of Climate Change. Integration of energy models and Multiregional Input Output Analysis Cristina de la Rúa Yolanda Lechón Pérez Helena Cabal Antonio Rodríguez Martínez

2 Content 1. Background 2. Objective 3. Methodology 4. Results: examples of what we can produce 5. Conclusions

3 Background Mexico 117 millions inhabitants, 15 th position in terms of GDP in 2012 One of the largest oil producers (10 th ) Produced 1.6% of the global primary energy in 2012 Oil production has declined in the last years 4 th oil derived products importer country Energy dependency in Mexico is a key topic In 2012, 82% of the electricity was produced by fossil tech.

4 Background Evolution of the public electricity system in Mexico in the period The Mexican electricity system is moving from oil to natural gas Source: SENER In 2012, 48% of the electricity came from gas, 34% from other fossil resources, 15% from renewable resources, and 3% from nuclear

5 Background In 2012, the Government of Mexico launched two policies targeting energy and climate change Energy and Climate Change national targets

6 Objective Based on this policies, the socioeconomic and environmental impacts associated to two scenarios have been estimated. The study has been conducted in two phases: 1. Through an energy model, the evolution of the Mexican electricity systemsinthelongtermhasbeenanalyzed 2. Based on the energy model results, and using a Multiregional Input- Output Analysis, the socioeconomic and environmental impacts have been estimated for both scenarios.

7 Methodology Two methodologies have been used 1. EFDA TIMES Model(ETM) 2. Multiregional Input Output Analysis

8 EFDA TIMES MODEL (ETM) Two long term scenarios have been defined based on the Mexican policies Scenario Assumptions Business as Usual (BaU) National Strategy of Climate Change (ENCC) No energy or climate policies I. Climate objectives 442,859 ktco 2 total by 2020 (-30% compared to 2000 levels) 210,880 ktco 2 total by 2050 (-50% compared to 2000 levels) II. Energy objectives 35% share clean energies in electricity generation by % share clean energies in electricity generation by % share clean energies in electricity generation by 2054

9 MULTIREGIONAL INPUT OUTPUT ANALYSIS the World Input Output Database has been used to conduct the analysis WIOD developedbya FP7 project: proyected until countries+ Restof theworld 35 activity sectors socio-economic accounts environmental accounts

10 ELECTRICITY PRODUCTION COSTS ETM comprises very detailed techno-economic data for more than 30 current and future electricity generation technologies. Results from ETM provide the following data for each period: Investment costs Operation and maintenance costs Fuel costs Utilization factors These costs change along the periods Technologies and costs improvements are included Costs specifications for the Mexican case have been taken into account

11 ELECTRICITY PRODUCTION COSTS Costs have been broken down and assigned to different sectors based on the descriptions provided by: Instituto de Investigaciones Eléctricas(México) Universidad Autónoma del Estado de Morelos (México) IEA Renewable Energy Technology Deployment Costs vary along the time, depending on the utilization factor in each scenario

12 RESULTS Electricity Production

13 RESULTS Value Added

14 RESULTS Employment

15 RESULTS Cumulative Energy Demand

16 RESULTS Greenhouse Gases emissions

17 RESULTS

18 RESULTS

19 RESULTS: Direct vs. Indirect Impacts

20 Which countries are affected? ValueAdded Top 10 Employment Top 10

21 Which countries are affected? Energy Top 10 GHG Top 10

22 Which sectors are involved?

23 Which sectors are involved?

24 CONCLUSIONS Both scenarios reach the targets for clean energy. GHG emissions targets are achieved in ENCC scenario. Total cumulative energy demand grows in both scenarios due to coal in the BaU and gas in CCS in the ENCC. However, cumulative energy demand per kwh decreases also in both scenarios. At the end of the period, there is much higher employment creation and value added in the ENCC scenario. Employment creation is mainly driven by biomass technologies while VA is highly related to CCS technologies. Besides Mexico, USA contributes to VA and employment when climate targets are met. China plays a higher role concerning employment in the ENCC scenario, as basic materials supplier. Agriculture is the sector with major impacts on employment in both scenarios while coke, refined petroleum and nuclear fuel sector is responsible for most of the total cumulative energy demand

25 THANK YOU Energy Systems Analyses Unit Cristina de la Rúa Yolanda Lechón Pérez Helena Cabal Irene Rodriguez Antonio Rodríguez Martínez