The Role of Technology in Meeting National and Global Technology Needs PART II

Transcription

1 The Role of Technology in Meeting National and Global Technology Needs PART II GTSP The Global Energy Technology Strategy Program Presented by Jae Edmonds and Leon Clarke for the GTSP team The Cosmos Club Washington, DC May 27, 2009 PNNL-66648

2 Part II In Part I we discussed interactions between technology and climate policy. He showed how technology deployment was affected by the policy environment, but also, how technology affected policy. We have been particularly interested in imperfect responses to climate change. In Part II we will continue this line of inquiry. We will take on three questions: How important is sectoral coverage? Will bioenergy with CCS make it possible to get to very low scenarios? And, how does bioenergy interact with other terrestrial ecosystems? How big a deal is emissions leakage? 2

3 How important is sectoral coverage? 3

4 Electrification If all fossil fuel carbon is priced equally the price of electricity FALLS relative to its competitors in end-use markets. As a consequence the world electrifies. 60% Electricity as a Percentage of Total Final Energy 1 Average Electricity Price Relative to Oil Price 50% % 30% 20% 10% GTSP 450 GTSP 550 GTSP 650 GTSP 750 GTSP Reference 0% Index 2005= GTSP GTSP 550 GTSP 650 GTSP 750 GTSP Reference

5 Electrification Over Time 25 Stabilization changes the sources of fossil CO 2 emissions. Utility emissions drop by 90 percent. Buildings and Industry electrify. Transportation emissions dominate. Global Fossil Fuel CO 2 Emissions Reference Case 25 Global Fossil Fuel CO 2 Emissions 4.7 Wm -2 Stabilization GtC/yr 10 GtC/yr Transportation Buildings Electricity Natural Gas Liquids Production Industry Hydrogen Transportation Buildings Electricity Natural Gas Liquids Production Industry Hydrogen

6 Electrification If only electric power generators see carbon prices, then the cost of reducing a tonne of carbon emissions rises by a factor of FIVE. $30 $25 Trillion 2003 USD $20 $15 $10 $5 $0 Carbon Tax Elec Power only Equivalent Reduction All Sectors Shortcut to papers & presentations\2005 morita Special Issue--Electrification paper\epri_electricty_sector_targeted_tax2 6

7 7 Will bioenergy with CCS make it possible to get to very low scenarios? And, how does bioenergy interact with other terrestrial ecosystems?

8 Why are we interested in bioenergy with CCS? ENERGY with NEGATIVE emissions are a major feature of the new low-climate-forcing scenarios. Source: Rao, Shilpa, Keywan Riahi and Cheolhung Cho, Detlef van Vuuren, Elke Stehfest, Michel den Elzen, Jasper van Vliet and Morna Isaac IMAGE and MESSAGE Scenarios Limiting GHG Concentrations to Low Levels. Framework Contract ENV.C5/FRA/2006/0071. International Institute for Applied Systems Analysis, Laxenburg, Austria. 8

9 Bioenergy is more than purpose-grown bioenergy crops EJ/yr Purpose Grown Bioenergy MSW MiniCAM Reference scenario Crop Residue Derived Bioenergy

10 Bioenergy and CCS 10 Both bioenergy and CCS are technologies that exist today. The combination of both is also being explored. CCS is not deployed at scale. Deployment of each depends on the institutional environment. Carbon price Institutional framework that facilitates a business model for deployment. Sequestration of CO 2 from bioethanol synthesis University of Illinois DOE Archer Daniels Midland

11 Present State of CCS Technology CCS systems have been used with coal and gas power generation systems since the 1970 s. (But not at scale.) 3,900 miles of CO 2 transport systems. CO 2 has been used with EOR for 35 years. CCS can potentially be applied to a wide range of industrial systems ranging from fossil fuel power generation (coal, gas and oil), cement kilns, refineries, chemical manufacture, etc. There are 4 end-to-end commercial systems in place today. 11

12 CCS and Cumulative Emissions PgC Cumulative global CO 2 capture and maximum potential global storage capacity. 3,000 2,500 2,000 1,500 1, Maximum Potential Storage A1g 450 ppm A1g 550 ppm A1g 650 ppm Unminable Coal Depleted Oil Reservoirs Depleted Gas Reservoirs Deep Saline Reservoirs Off Shore Deep Saline Reservoirs On Shore A1g 750 ppm GTSP 450 GTSP 550 GTSP 650 GTSP 750 Southeast Asia Former Soviet Union Eastern Europe Western Europe Ratio of Cumulative Emissions 1990 to 2095 to Maximum Potential Geologic Storage Capacity by Region Latin America Africa Middle East India China Korea Japan Australia_NZ Canada USA 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Cumulative emissions from MiniCAM CCSP SAP 2.1a Potential geologic storage from Dooley et al. (2004) and subsequent updates. 12

13 Institutional arrangement for CCS 13 CCS is a CO 2 emissions mitigation technology. It raises capital costs by 50%. It takes a substantial fraction of a power plant s power production to run. There is no business model for deploying CCS without either a significant positive price on carbon, or a regulatory requirement. New plants would be cheapest. Retrofits are possible at extra cost. For most of the world s carbon emissions, the price of carbon is zero. The regulatory model that governs CCS for most of the world s carbon emissions is still under development. Exceptions exist, e.g. Norway Significant progress in many parts of the OECD in defining CCS rules.

14 Present State of CCS Technology Jim Dooley will be talking about this in more detail after lunch at the JGCRI at the GTSP Technical Workshop. 14

15 Bioenergy 15 Bioenergy is derived from plant material a very young hydrocarbon. Bioenergy derives its carbon from the air. If the plant material is oxidized, then there in no NET change in carbon in the atmosphere. Though there are indirect emissions to be discussed shortly. Bioenergy is generally considered a renewable energy form. Bioenergy was the dominant preindustrial energy form. It was supplanted by higher energy density forms, e.g. fossil fuels and nuclear power. It is still used today, e.g. the pulp and paper industry but also traditional bioenergy use in developing regions. It is a major source of liquid fuel in Brazil today.

16 Bioenergy today There is more bioenergy used today than when it was the dominant energy form. Bioenergy is not cheap and without a subsidy, it does not compete effectively with energy forms such as fossil fuels. The relative attractiveness of bioenergy use could be dramatically different if under a carbon price regime. EJ/year Historical Global Energy Use Biomass Coal Oil Natural Gas Nuclear Non-biomass renewable

17 Indirect Land-use Change Emissions (ILUC) Bioenergy production requires land, a limited resource. Any number of papers have identified the problem of indirect land-use emissions (ILUC). Fargione et al. (2008); Searchinger et al. (2008); Edmonds et al. (2003); and Wise et al. (2009). ILCU occurs when a major new demand for land is introduced in the face of a fixed land resource. Increased demand for land for purpose-grown bioenergy crops results in higher rental rates for crops and potentially expansion into unmanaged lands. Crutzen et al. (2008) also raised the question of expanded non-co 2 GHG emissions, most notably as a consequence of N 2 O from fertilizer applications. 17

18 ILUC and Limiting Atmospheric CO 2 Concentrations There are more than 2000 billion tons of carbon in terrestrial ecosystems including soils and above ground plants. Limiting atmospheric CO 2 concentrations to low levels, e.g. 450 or 550 ppm implies limits for total anthropogenic carbon emissions. 450 ppm ~500 PgC (2005 to 2100) 550 ppm ~800 PgC (2005 to 2100) Note that these concentrations are NOT CO 2 -equivalent The extent of ILUC depends on the policy environment. 18

19 Carbon Pricing CCS only deploys in the presence of either a carbon price of a regulatory requirement. Purpose-grown bioenergy production is enhanced by the presence of a carbon price. The BioCCS combination produces a negative emission Need for a mechanism that allows for payment for negative emission. Note that negative global emission scenarios not only produce no revenue, but are a net public expenditure. 19

20 Carbon Pricing in for Two Contrasting Scenarios Immediate, universal participation by all regions to limit CO 2 concentrations in Two alternative carbon pricing regimes 1. Fossil fuel and industrial carbon tax (FFICT) in this regime only fossil fuel and industrial carbon emissions are valued. Bioenergy is treated as having no net carbon. Terrestrial carbon is valued at zero. 2. Universal carbon tax (UCT) in this regime all carbon is valued equally regardless of either its origins or the activity that introduces it to (or removes it from) the atmosphere. 20

21 Carbon Prices: FFICT and UCT 2005 USD/tC $3,500 $3,000 $2,500 $2,000 $1,500 UCT 550 UCT 500 UCT 450 Reference 550 FFICT 500 FFICT 450 FFICT Carbon Price $1,000 $ $

22 Net Land Use Change Emissions & Fossil Fuel and Industrial CO 2 Emissions For a given CO 2 concentration limit In the UTC regime ILUC disappears as an issue. In the FFICT regime high carbon prices drive bioenergy demands and ILUC TgC/yr 25,000 20,000 15,000 10,000 Land Use Change Emissions 550 UCT 500 UCT 450 UCT Reference 550 FFICT 500 FFICT 450 FFICT TgC/yr 25,000 20,000 15,000 10,000 Fossil Fuel and Industrial CO 2 Reference 550 UCT 500 UCT 450 UCT 550 FFICT 500 FFICT 450 FFICT 5,000 5, ,000-5,000 22

23 Land use: 450 ppm atmospheric CO ppm Stabilization Scenario When ALL Carbon is Valued (UCT) 100% 80% Desert Other Unmanaged Land 60% Unmanaged Forests Reference Scenario 100% Desert 80% Other Unmanaged Land 60% Unmanaged Forests Managed Forests 40% Unmanaged Pasture 20% Pasture Bioenergy Crops Crops 0% UrbanLand RockIceDesert OtherArableLand Tundra ShrubLand UnmanagedForest Forest GrassLand UnmanagedPasture Pasture PurGrownBio Rice SugarCrop OtherGrain OilCrop MiscCrop FodderCrop FiberCrop Corn Wheat 40% Managed Forests 20% Unmanaged Pasture Pasture Bioenergy Crops 0% Crops % Desert 80% Other Unmanaged Land Unmanaged Forests 60% Bioenergy Crops Managed Forests 40% ppm Stabilization Scenario When Terrestrial Carbon is NOT Valued (FFICT) Unmanaged Pasture 20% Pasture Crops 0%

24 24 Cropland 1700

25 25 Cropland 1750

26 26 Cropland 1800

27 27 Cropland 1850

28 28 Cropland 1900

29 29 Cropland 1950

30 30 Cropland 2005

31 Cropland RCP 4.5 (MiniCAM)

32 Cropland RCP 4.5 (MiniCAM)

33 Where does the bioenergy go? Carbon taxes and bioenergy use Bioenergy can play many roles in climate stabilization: Provider of liquid fuels for transportation ( ), or If CO 2 capture and storage (CCS) is an available technology, bioenergy could be used in power generation with CCS ( ) and provide a means of achieving negative global CO 2 emissions. Bioenergy with CCS is a key technology for achieving low climate stabilization levels. EJ/yr UCT 500 ppm biomass to H2 biomass to H2 CCS Biomass (IGCC)_CCS Biomass (IGCC) Biomass (existing) Biomass (conv) refined liquids industrial refined liquids enduse wholesale gas industry building $174/tC $362/tC

34 BioCCS and Electric Power Generation EJ/year Global Fuel Consumption in Electric Power Generation 450 ppm Limit hydro geothermal exotic PV_storage PV CSP_storage CSP w ind_storage wind Gen_III Gen_II_LWR Biomass (IGCC)_CCS Biomass (IGCC) Biomass (existing) Biomass (conv) Coal (IGCC)_CCS Coal (IGCC) Coal (existing) Coal (conv pul) Gas (peak load conv) Gas (existing) Gas (CC)_CCS Gas (CC) Gas (base load conv) Oil (peak load conv) Oil (IGCC)_CCS Oil (IGCC) Oil (existing) Oil (base load conv) BioCCS in electricity is a minor energy form in the first half of the century. Even in the 450 ppm case BioCCS deploys 15 to 30 years after CCS with fossil fuels. Total BioCCS energy use for power production in % of total for the 450 ppm case 34

35 Biomass Consumption: EMF w/m 2 Overshoot, Immediate Accession 35 Bioenergy is used to fuel the transportation sector when CCS is not available. Terrestrial Carbon Pricing CCS No CCS EJ/yr EJ/yr 250 Biofuels 200 Electricity w CCS 150 Electricity Hydrogen 100 Industry 50 Buildings Biofuels 200 Electricity w CCS 150 Electricity Hydrogen 100 Industry 50 Buildings

36 Corn Price When Carbon Is Valued But No Bioenergy Is Produced Significant crop price escalation occurs if carbon is valued, even in the absence of purpose grown bioenergy production. Prior to 2040 the influence of bioenergy is negligible. Prior to 2040 crop price escalation, relative to the reference scenario, is predominantly driven by the value of carbon. Index 2005= Corn Price Reference Reference (no purpose-grown bioenergy) 500 UCT (no purpose-grown bioenergy) 500 UCT 500 FFICT

37 Land Use Change Emissions and Crop Productivity Cumulative Emissions 2005 to %/yr crop productivity growth: 50 PgC No crop productivity growth: 122 PgC TgC/yr 3,000 2,500 2,000 1,500 1, Land Use Change Emissions 0 Difference 72 PgC , %/yr Crop Productivity Growth No Crop Productivity Improvement ,500 37

38 Bioenergy, Land Use, and Climate Change Allison Thomson will be talking about the impact of climate change on these results later today at the GTSP Technical Workshop. 38

39 How big a deal is emissions leakage? 39

40 Industrial Leakage SGM EMF ppm CO 2 -e with delayed participation Leakage offsetting increases in nonmitigating regions. Measuring leakage: Mitigation by those reducing domestic emissions less total reductions in Global emissions. 16% 14% 12% 10% 8% 6% 4% 2% 0% If ROW never enters Delayed Accession 3.7 W/m2 Scenario The degree of industrial leakage decreases as the coalition expands. The degree of industrial leakage increases with time. Leakage reaches a maximum in the EMF ppm CO2-e scenario at around 6% 40

41 SGM EMF22 International Karen Fisher-Vanden will be talking about this in more detail tomorrow morning at the JGCRI at the GTSP Technical Workshop. 41

42 Land Use Leakage 3.7 Scenario, Overshoot S1 = Immediate Accession S2 = Delay GtC/yr Group 1 Group 2 Reference S1_3p7_OS S2_3p7_OS GtC/yr Reference S1_3p7_OS S2_3p7_OS 42 Leakage offsetting increases in nonmitigating regions. Measuring leakage: Mitigation by those reducing domestic emissions less total reductions in Global emissions. GtC/yr Group 3 Reference S1_3p7_OS S2_3p7_OS GtC/yr Global Reference S1_3p7_OS S2_3p7_OS

43 Land Allocation: 3.7 W/m 2 Overshoot GROUP 1 Immediate Accession 100% 80% 60% 40% 20% 0% Grass/Shrub Forest Pasture biomass Corn FiberCrop FodderCrop MiscCrop OilCrop OtherGrain Rice Rice SugarCrop Wheat Delayed Accession 100% 80% 60% 40% 20% 0%

44 Land Allocation: 3.7 W/m 2 Overshoot GROUP 2 Immediate Accession 100% 80% 60% 40% 20% 0% Grass/Shrub Forest Pasture biomass Corn Corn FiberCrop FodderCrop MiscCrop OilCrop OtherGrain Rice Rice SugarCrop Wheat Delayed Accession 100% 80% 60% 40% 20% 0%

45 Land Allocation: 3.7 W/m 2 Overshoot GROUP 3 Immediate Accession Delayed Accession 100% 80% 60% 40% 20% 0% Grass/Shrub Forest Pasture biomass Corn FiberCrop FodderCrop MiscCrop OilCrop OtherGrain Rice SugarCrop Wheat 100% 80% 60% 40% 20% 0%

46 MiniCAM EMF22 International Kate Calvin will be talking about this in more detail tomorrow morning at the JGCRI at the GTSP Technical Workshop. 46

47 Summing Up This year we are going to discussed the role of technology in addressing climate change through a series of questions in a two-part presentation: The Role of Technology in Meeting National and Global Technology Needs: Parts I and II Part I What do stabilization goals imply for near-term actions and longterm strategies? How low can we go? How fast can we get there? In the long-term almost anything is possible, but the faster we want to get there, the harder it is and the more important technology becomes. Who needs to do what and by when? Emissions mitigation may start in the developed world, but in the long term China, India and other developing nations will need to lead. Getting to 450 ppm with gradually expanding participation means rapid reductions by everyone as soon as they begin. 47

48 Summing Up Part I (continued) How much technology do we need to limit climate change? You always begin with what you ve got. But, the better the technology (both end-use and energy supply) the less doing without is needed. And, getting to low scenarios means a rapidly accelerating deployment of emissions mitigation technologies. How are near-term actions affected by long-term technology expectations? The poorer you expect future technology to be, the more you need to do today. You bank emissions mitigation today to avoid really deep reductions in the future. What is the value of having and developing technology? Technology is more important to controlling mitigation costs the less perfect the world. Most of the value of developing technology is in other countries getting and deploying it. 48

49 Summing Up Part II How important is sectoral coverage? Incomplete sectoral coverage is an expensive luxury. Will bioenergy with CCS make it possible to get to very low scenarios? And, how does bioenergy interact with other terrestrial ecosystems? Bioenergy with CCS has the potential to deliver negative net emissions of CO 2 and therefore help make very low CO 2 concentrations goals possible. Bioenergy s interaction with other terrestrial systems will depend on both the technology available for growing crops and the policy environment. How big a deal is emissions leakage? Leakage can be important. Industrial leakage tends to grow with the scale of the global economic system and with the carbon price driver. Land-use change emissions are a potentially important source of leakage. 49

50 END 50