Modelling Climate Policy Recommendations for Sweden Workshop on Short term vs long term energy planning, UCL, April 28 th 2016

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1 Modelling Climate Policy Recommendations for Sweden Workshop on Short term vs long term energy planning, UCL, April 28 th 2016 Anna Krook Riekkola Associate Senior Lecturer Luleå Tekniska Universitet (LTU) 1

2 Energy system modelling process Policy implications From: Krook Riekkola (2015). Inspired by Clas Otto Wene, professor emeritus, Energy System 2 Technology unit (Chalmers), Churchman (1968) and Tosato (2009)

3 My objective with this workshop 1) Which kind of insights from the energy system model should be communicated to the decision makers (in order for them make sustainable decisions)? Indicators (e.g. EUR/CO2, cost/gdp): Decision makers asks for it, but what does it actually say? Stories on how the target could be met (often become huge)..? 2) How to improve the (TIMES) modelling work with respect to uncertainties of the future? 3

4 Assessing Climate target for Sweden Using TIMES-Sweden Sector targets in year 2030 Overall target in year 2050 TIMES-Sweden: An energy system optimization model of the Swedish Energy system, including both supply and demand sectors, including transportation. Base-year calibrated according to energy and transportation statistics, existing policy instruments etc. 4

5 Scenario analysis with TIMES-Sweden CO 2 pris KLIMATMÅL EU ETS pris CO 2 skatter Reference scenarios Scenarier utan CO2 mål Referens REF Dagens Klimat KLIM Dagens Ref LowEUETS REF låg nivå Dagens Sector targets for non-eu-ets Scenarier med sektormål för icke handlande sektorer (NETS) Klimat NETS40 NETS: 40% NETS: 40% Klimat NETS50 NETS: 50% NETS: 50% KLIM Dagens Klimat NETS60 sectors (NETS)in NETS: % NETS: 60% Klimat NETS70 NETS: 70% NETS: 70% Overall national climate Scenarier med mål för alla sektorer (NETS+ETS), CO 2 skatten höjs från 2020 i NETS i nivå med skuggpriset för att nå 50% reduktion i NETS år 2030 (scenario Klimat NETS50 ). Klimat CAP60 < 2030: Dagens NETS+ETS <= NETS+ETS <= 60% Klimat CAP80 >2030 Skatt enl. Tot Emissioner i NETS+ETS <= 80% KLIM Klimat CAP100 targets skuggpris i in 2050 scenario Klimat NETS+ETS <= 100% Klimat CAP110 Klimat NETS50 NETS50 NETS+ETS <= 110% Övergripande på för Sverige i linje med 85% reduktionsmål år 2045 (=100% reduktionsmål för Energi) Scenarier med sektormål för icke handlande sektorer (NETS) An overall An overall national EU ETS pris CO 2 national energy sector GHG CO2 skatter Klimatmål (KM) NETS+ETS <= 40% NETS+ETS <= 100% reduction target of of NETS+ETS 100% 85% <= 40% in in 2045 NETS+ETS <= 100% KM+NETS40 & NETS: 40% & NETS: 40% NETS+ETS <= 40% NETS+ETS <= 100% KM+NETS50 & different sector targets KLIM Dagens & NETS: 50% & NETS: 50% NETS+ETS <= 40% NETS+ETS <= 100% KM+NETS60 for NETS in 2030 & NETS: 60% & NETS: 60% NETS+ETS <= 40% NETS+ETS <= 100% KM+NETS70 & NETS: 70% & NETS: 70% Sensitivity analysis 5

6 160 Final Energy Consumption in 2013 (TWh) FOSSILS FOSSILS Coal Oil Natural gas Others Electricity District heating Biomass 20 0 FOSSILS Industry RSD&COM Transports Other 6

7 160 Net electricity & District heating production per source in 2013 (TWh) Coal Oil Natural gas Other Electricity FOSSILS Waste heat Biomass Nuclear 20 0 Wind Hydro Net electricity imp 20 ELC DH 7

8 Some results 8

9 Total CO2 emissions Klimat: Reference scenario with EU-ETS climate scenario Klimat mål (KM): A national 100% reduction target from 2045 Sector targets: KM+NETSxx (xx% reduction from 2030) KM & KM+NETS40 follows a similar pathway From year 2035, the emissions in NETS should be reduced by at least 60 %, in order to cost efficient meet the overall target (KM) From 2040, no sector targets are binding. Klimat > all possible options most be used Klimat Mål 2045 (KM) KM + NETS40 Klimat KM + NETS50 Klimat Mål 2045 (KM) KM NETS60 KM + NETS40 KM NETS70 KM + NETS50 KM + NETS60 KM + NETS70 9

10 Main conclusions Biomass is crucial in order to meet low carbon pathways in a low cost manner. ( Sweden is rich in biomass sources both forestry and energy crop possibilities ). Challenge I: Road-based goods transportation (very few alternatives to fossil fuels). Some goods can be changes to alternative transportation (railway, electrified high-ways, ships and improved logistics). THUS, biofuels becomes very important! In the same time, the compatibility of biofuels depends to a large degree on the price of oil, THUS, it is important with targeted policies! Challenge II: To make shore that the technology progress assumed in the model take place. 10

11 Big uncertainties that impact the results Bio-CCS and CCS in the industry (Pulp&paper, Iron&steel and Cement) -> Impact if the target can be meet or not. Future transport demand -> Impact he cost of meeting the target. Cost development of electric vehicle -> Impact he cost of meeting the target and how much biomass that is needed. Price development of oil products (impact biofuels) -> Impact he climate reduction pathway, and thereby the accumulated amount of CO2. 11

12 Thanks for the attention GREAT IDEAS GROW BETTER BELOW ZERO LTU