Renewable fuels A comparative assessment from economic, energetic and ecological point-of-view up to 2050 in EU countries

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1 Renewable fuels A comparative assessment from economic, energetic and ecological point-of-view up to 2050 in EU countries Amela Ajanovic Energy Economics Group Vienna University of Technology WREF 2012 Denver, 2012

2 Content 1. Introduction 2. Method of approach 3. Environmental assessment Greenhouse gas emissions Cumulated primary energy demand 4. Economic assessment 5. Conclusions

3 1. Introduction GREENHOUSE GAS EMISSIONS EU-27 Industry 16% Service 4% Residential 11% Others 4% Civic Aviation 1% Transport 25% Road transport 23% Energy sector 40% TOTAL ENERGY 2007: 4000 Mio tons CO2_equ Railways 0% Ships 1% Other 0%

4 2. Method of approach Well-to-Wheel (WTW) Renewable energy sources Fuel Mobility Car Well-to-Tank (WTT) Tank-to-Wheel (TTW) The energy chain for providing the service mobility

5 3. Environmental assessment Gasoline Bioethanol Wheat Biodiesel RME Biogas Electricity wood Electricity PV 2010 Electricity wind/hydro H2-biomass H2-PV H2-wind/hydro gco2equ/km Comparison of specific WTW CO2-emissions in 2010

6 3. Environmental assessment Gasoline Biodiesel 2nd Bioethanol Ligno SNG Electricity wood Electricity PV 2050 Electricity wind/hydro H2-biomass H2-PV H2-wind/hydro gco2equ/km Comparison of specific WTW CO2-emissions in 2050

7 3. Environmental assessment H2-biomass H2-PV H2-wind/hydro Electricity wood Electricity PV Electricity wind/hydro 2010 Biogas Biodiesel RME Bioethanol Wheat Gasoline kwh/100km FF-WTT-Fuel FF-TTW-Fuel RE-WTT-Fuel RE-TTW-Fuel FF-Car RE-Car Renewable (RE) and fossil (FF) energy shares in the whole WTW energy service provision chain in 2010 for gasoline versus renewable fuels

8 3. Environmental assessment H2-biomass H2-PV H2-wind/hydro Electricity wood Electricity PV Electricity wind/hydro 2050 SNG Bioethanol Ligno Biodiesel 2nd Gasoline kwh/100km FF-WTT-Fuel FF-TTW-Fuel RE-WTT-Fuel RE-TTW-Fuel FF-Car RE-Car Renewable (RE) and fossil (FE) energy shares in the whole WTW energy service provision chain in 2050 for gasoline versus renewable fuels

9 Gasoline Bioethanol Wheat Biodiesel RME Biogas Electricity wind/hydro Electricity PV Electricity wood H2-wind/hydro H2-PV H2-biomass EUR/100km 4. Economic assessment Fuel costs (excl. tax) Excise tax VAT Electricity fee Transport service fuel costs in 2010 per 100 km

10 Gasoline Biodiesel 2nd Bioethanol Ligno SNG Electricity wind/hydro Electricity PV Electricity wood H2-wind/hydro H2-PV H2-biomass EUR/100km 4. Economic assessment Fuel costs (excl. tax) Electricity fee VAT CO2-tax Transport service fuel costs in 2050 per 100 km

11 4. Economic assessment FCV H2-biomass H2-PV H2-wind/hydro Electricity wood EV Electricity PV Electricity wind/hydro 2010 Biogas ICE Biodiesel RME Bioethanol Wheat Gasoline EUR/100km Capital costs EUR/100 km O&M costs EUR/100 km Fuel costs EUR/100 km Total specific costs of transport in 2010 per 100 km

12 3. Economic assessment H2-biomass H2-PV H2-wind/hydro Electricity wood Electricity PV Electricity wind/hydro 2050 SNG Bioethanol Ligno Biodiesel 2nd Gasoline EUR/100km Capital costs EUR/100 km O&M costs EUR/100 km Fuel costs EUR/100 km Total specific costs of transport in 2050 per 100 km

13 EUR/km 4. Economic assessment H2- wind/hydro H2-PV H2-biomass Electricity PV Electricity wind/hydro Electricity biomass 0 Biogas Gasoline Biodiesel 1st Bioethanol 1st gco2/km Comparison of specific CO2 emissions and costs of mobility with different fuels in 2010

14 EUR/km 4. Economic assessment H2-PV H2-biomass H2-wind/hydro Electricity PV Electricity biomass Electricity wind/hydro SNG Bioethanol 2nd Gasoline Biodiesel 2nd gco2/km Comparison of specific CO2 emissions and costs of mobility with different fuels in 2050

15 5. Conclusions 1 st generation biofuels The environmental performance of 1 st generation biofuels is currently rather modest. The economic prospects for the 1 st generation biofuels could be much better with the implementation of CO 2 based tax system. Moreover, their potentials are very restricted especially due to limited crops areas; 2 nd generation biofuels There are much higher expectations from 2 nd generation biofuels which could in a favourable case enter the market between 2020 and The major advantage of the 2 nd generation biofuels is that they can be produced from different lignocellulosic materials, which are not in competition with a food production. These advanced biofuels have significantly better ecological and energetic life-cycle performance in comparison to the 1 st generation;

16 5. Conclusions Hydrogen and electricity from RES In 2010 and 2050 electricity is slightly favorable from ecological point-of-view given the same RES. Most favorable are wind and hydro followed by PV and biomass; Despite very good CO 2 balances of hydrogen from renewable energy sources, use of hydrogen in a passenger cars will not become competitive before 2050 due to high capital costs; Similar as with hydrogen, electricity from renewable energy sources will remain an expensive option for mobility.

17 Thank you!

18 Promotion systems for electricity generation from renewable energy sources revisited - an update on lessons learned from EU countries Reinhard Haas Vienna University of Technology 1

19 SURVEY 1. Introduction 2. Historical developments 3. Success of strategies 4. Conclusions 2

20 1 INTRODUCTION CORE MOTIVATION: Policy targets for an INCREASE of RES-E! e.g. 2020/20/20/20 targets RES-E directive: increase share of RES-E from 12% 1997 to 22% in 2010) 3

21 Electricity generation [TWh/a] RES-E EU : 12% 2. HISTORY 2009: 17% Large-scale hydro Small-scale hydro 'New' RES-E excl. hydro 5

22 Stromerzeugung [TWh/a] ELECTRICITY GENERATION FROM NEW RENEWABLES 250 IN EUROPE Geothermie Photovoltaik Biomüll Biogas Biomasse (fest) Wind (Offshore) Wind (Onshore) 2009: 7 % : 1 %

23 REMARK ON RES DEPLOYMENT IN THE EU-COUNTRIES Since about 1997 triggered by EUdirectives and EU initiatives Yet, specific country success stories very strongly related to national policies design! 7

24 3. SUCCESS OF STRATEGIES 8

25 Costs (EUR/ kw) (=efficiency) SUCCESS CRITERIA FOR STRATEGIES Major objectives: MW /Number of plants (=effectiveness) increase the amount of electricity from renewables and reduce costs! 9

26 Value of certificate (c/kwh) PRICES OF CERTIFICATES Italy, UK; Belgium: Continuous high level! Sweden: Shortage in banked certificates! Sweden UK Belgium (average) Italy Poland Romania 11

27 cent/kwh LEVEL OF FEED-IN TARIFFS AT DE ES

28 Value of certificate (c/kwh) cent/kwh 14 TRADABLE CERTIFICATES SUPPORT LEVELS: COMPARISON 14 FEED-IN TARIFFS AT DE ES Sw eden UK Belgium (average) Italy Poland Romania

29 EFFECTIVENESS VS COSTS 14

30 THE CASE OF SWEDEN Major characteristics: * since 2002: quota-based system of Tradable Certificates * also old capacity allowed to fulfill quota * additional investment subs. for wind! 15

31 [cent/kwh] SWEDEN: IMPACT OF INVESTMENT SUBSIDIES P cert_th Wind Loc. A Costs (Supply curve) Wind Loc. B Invest. Subsidies for wind cert_act Biomass Quota [GWh/year] 16

32 PRICES OF CERTIFICATES IN SWEDEN 17

33 4. CONCLUSIONS (1) There should be a clear focus on NEW capacities! IMPROVE/OPTIMIZE THE CURRENT SYSTEMS To ensure significant RES-E deployment in the long-term, it is essential to promote a broad portfolio of different technologies BEFORE HARMONISING OR IMPLEMENTING A well-designed FIT provides RES-E-deployment fastest and at lowest costs; MAJOR CHANGES! Strategies with lower (financial) risk -> less profit requirements -> lower costs for society. 18

34 4. CONCLUSIONS (2) Promoting RES in EU successful? Yes, but increase in energy consumption outweighed Trading certificates in Sweden successful due to very specific favourable conditions ( Long ) A European- wide trading system would lead to a much higher burden for European citizens than a comparable FIT for meeting the 2020/20%RES target! 19

35 INTERESTED IN FURTHER INFORMATION? Download reports from: www. eeg. tuwien. ac. at www. green-x. at www. optres. fhg. de to: tuwien. ac.at 20