The Global ETSAP-TIAM Model: Features and Scenarios for a Low Carbon

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1 The Global ETSAP-TIAM Model: Features and Scenarios for a Low Carbon Society Uwe Remme a, GianCarlo Tosato b (a) Institute of Energy Economics and the Rational Use of Energy (IER) Universität Stuttgart, Germany (b) Energy Technology Systems Analysis Project, IEA-ETSAPETSAP 2 nd International Expert Meeting on Bottom-up Based Analysis on Mitigation Potential October 21, 2008, Paris 1

2 Overview ETSAP-TIAM model i. Model characteristics ii. Structure of the reference energy system iii. Additional features: Climate module Scenario analysis for a low-carbon society Conclusions & Outlook on future model developments (other studies are reported at: or at / Uwe Remme, G.C. Tosato ETSAP-TIAM Model October

3 Analysis framework: ETSAP-TIAM TIAM Model TIMES Integrated Analysis Model Based on TIMES model generator: i. Developed by ETSAP (Energy Technology Systems Analysis Programme) ii. iii. iv. Dynamic partial equilibrium model approach with inter-temporal objective function minimizing total discounted system costs (alternative objective functions possible) Clairvoyant or myopic approach with respect to foresight Technologically detailed bottom-up model for each region v. Covering energy flows from the useful energy demand over end-use sectors and conversion sector to the primary supply Time horizon world regions: i. Bilateral trade in hard coal, pipeline gas, LNG, crude oil, petroleum products (distillates, gasoline, heavy fuel oil and naphtha) and bio-ethanol ii. Global trade in emission permits possible Emissions: CO 2, N 2 O, CH 4 i. Carbon capture and sequestration (power generation and alternative fuel production) ii. Mitigation options for N 2 O and CH 4 Climate module (3-reservoir model for calculating atmospheric GHG concentrations and induced temperature changes) Multi-stage stochastic programming version to handle uncertainties, hedging strategies Uwe Remme, G.C. Tosato ETSAP-TIAM Model October

4 TIAM model: Model regions FSU CAN WEU EEU USA MEA CHI JPN SKO IND MEX AFR ODA CSA AUS 15 World regions: CAN, USA, MEX, CSA (Central South America), WEU (Western Europe), EEU (Eastern Europe), MEA (Middle East), FSU (Former Soviet Union), CHI, IND, SKO (South Korea), JPN, ODA (Other Developing Asia), AUS (Australia+New Zealand) Uwe Remme, G.C. Tosato ETSAP-TIAM Model October

5 Reference Energy System of TIAM Fossil Fuel OI**** Reserves GA**** (oil, coal, gas) CO**** CH4 options Extraction Carbon capture Trade Upstream Fuels CO2 Trade Secondary Transformation BIO*** ELC Carbon sequestration Terrestrial sequestration OPEC/ NON-OPEC O regrouping OIL*** GAS*** COA*** Climate Module Atm.Conc ΔForcing ΔTemp Biomass Potential Renewable Potential Nuclear BIO*** WIN SOL GEO TDL HYD NUC Electricity ELC*** Fuels Electricity Cogeneration Heat ELC HET Hydrogen production and distribution BIO*** SYNH2 ELC HET End Use Fuels Used for reporting & setting targets Industrial Service Composition I*** IND*** Industrial Tech. INDELC INDELC IS** Auto Producer Cogeneration AGR*** COM*** RES*** TRA*** Agriculture Tech. Commercial Tech. Residential Tech. Transport Tech. I** (6) N2O options A** (1) C** (8) R** (11) T** (16) CH4 options CH4 options Demands Non-energy sectors (CH4) Landfills Manure Bio burning, rice, enteric ferm Wastewater Uwe Remme, G.C. Tosato ETSAP-TIAM Model October

6 Linkage with climate module CH 4 EMISSIONS ENERGY SYSTEM + N 2 O EMISSIONS NON ENERGY SECTORS CO2 EMISSIONS CH 4 CONC ATM N 2 O CONC ATM CO 2 CONC ATM Tropospheric O 3, HFC, SF 6 Exogenous forcing TOTAL RADIATIVE FORCING ΔTT SURFACE - Global emissions CO 2 CONC ΔT - ΔCO 2 conc. in 3 reservoirs OCEAN UP DEEP - ΔAtm. radiative forcing - ΔTemp. in 2 reservoirs CO 2 CONC (Adapted d from Nordhaus & OCEAN LO Boyer, 1999) Uwe Remme, G.C. Tosato ETSAP-TIAM Model October

7 Linkage with oil market model Oil market model LOPEX Cartel rent for crude oil, Gas price linked to oil price [%] bzw. [$/bbl] Oilprice Non-OPEC modul Hubbert simulation $/bbl $/bbl $/bbl $/bbl p(t) Iteration until convergence OPEC modul dem( P( t)) nopt( t) P( t p [ ] ) Non-OPEC production ability Energy prices s, Resource avail Global energy system model Cost and emissions balance Domestic sources Imports Primary energy TIAM Coal processing Refineries Power plants and Transportation CHP plants and district heat networks Gas network Capacities Prices Final energy Energy flows Industry Commercial and tertiary sector Households Transportation Costs Emissions GDP Process energy Heating area Population Light Communication Power Person kilometers Freight kilometers Demands Demand services q Reference point (crude oil consumption and price) for demand function Uwe Remme, G.C. Tosato ETSAP-TIAM Model October

8 Scenario analysis to achieve a low-carbon society (LCS) LCS scenarios (time horizon until 2050): i. Baseline scenario (BASE): without explicit CO 2 mitigation efforts ii. iii. CO 2 price scenario (): Global CO 2 price scenario increasing from 10$/t CO 2 in 2013 to 100 $/t in 2050 CO2 Plus scenario (CPLUS): Global reduction in CO 2 emissions by 50% relative to 2000; assumption Kyoto is realized in 2010 (-5.2% rel. to 1990) Assumptions: i. GDP: 1. Global average GDP growth: : 2.8%, : 2.1% 2. For comparison: A1 scenario: : 3.9%, : 2.1% B2 scenario: : 2.8%, : 1.5% ii. Discount rates: 1. Global discount rate (social time preference rate): 5% 2. Region and sector specific discount rates for investments: 10-20% iii. Oil price: 2005: 50 $/bbl 2010: 55 $/bbl 2020: 61 $/bbl 2030: 65 $/bbl 2050: 70 $/bbl Uwe Remme, G.C. Tosato ETSAP-TIAM Model October

9 Assumed development of fg GDP and population AFR AUS CAN CHI CSA 00] EEU FSU Population [Index 100 = 20 GDP [Index 100 = 2000] IND JPN MEA MEX ODA SKO USA WEU World Uwe Remme, G.C. Tosato ETSAP-TIAM Model October

10 Global CO 2 emissions by sector % 100% 80% 60% 40% 20% 0% Conversion Transport Industry Global CO2 emissions [Gt CO2] -20% -40% -60% Agriculture, Commercial, Residential CO2 emissions relative to 2000 [2000 = 0%] BASEE 0 CPLUSS BASEE 0 CPLUSS BASEE 0 CPLUSS BASEE 0 CPLUSS Sectoral BASE CPLUS BASE CPLUS CPLUS BASE CPLUS BASE Uwe Remme, G.C. Tosato ETSAP-TIAM Model October

11 Regional CO 2 emissions Regi ional CO2 emissions [Gt CO2] Regio onal CO2 emi issions [200 0 = 100%] tics Statist BAS SE US CPL BAS SE US CPL 0 BASE CPLUS BASE CPLUS OECD America OECD Europe OECD Asia+Pacific Transition economies Developing countries Uwe Remme, G.C. Tosato ETSAP-TIAM Model October

12 CO 2 mitigation measures -30 Gt CO2-37 Gt CO2 50 Global CO2 2 Emission ns [Gt CO2] CO 2 capture (power) Electricity savings Nuclear power Renewables (power) Efficiency improvements and fuel switching in power sector CO 2 capture synfuel production Electrification Renewables (end-use) Efficiency improvements and fuel switching (end-use) 5 CO 2 emissions 0 BASE CPLUS Uwe Remme, G.C. Tosato ETSAP-TIAM Model October

13 Electricity generation 55, , Oil 45, Wind neration [T TWh] Ele ectricity ge 40,000 35,000 30,000 25,000 20,000 15,000 10,000 5,000 0 Statistics BASE CPLUS BASE CPLUS BASE CPLUS BASE CPLUS CO2 intens sity [g/kwh h] Tidal Solarthermal PV Biomass Nuclear Geothermal Natural gas Coal Hd Hydro CO2 intensity Uwe Remme, G.C. Tosato ETSAP-TIAM Model October

14 Cost implications Indicator Region Unit Difference annual energy system costs rel. to base scenario Scenario CPLUS OECD Bill. $ Trans. economies Bill. $ Developing countries Bill. $ World Bill. $ Marginal abatement costs World $ 2000 /t CO Average abatement costs World $ 2000 /t CO Uwe Remme, G.C. Tosato ETSAP-TIAM Model October

15 Sensitivity analysis 50,000 45,000 Average mitigation costs: on [TWh] Electricit ty generati 40,000 35,000 30,000 25,000 20,000 15,000 10, , $/t CO 2 Oil Wind Tidal/Wave Solartherm PV Biomass Nuclear Geotherma Natural gas Coal Hydro 0 Statis stics BASE CP PLUS CPL LUS- NC CCS CPL LUS- N UC BASE CP PLUS CPL LUS- NC CCS CPL LUS- N UC CPLUS-NCCS: No CCS available CPLUS-NUC: Increased nuclear generation; 14 GWh in 2050 compared to 8.4 GWh in CPLUS Uwe Remme, G.C. Tosato ETSAP-TIAM Model October

16 Conclusions LCS scenario analysis: i. : At a CO 2 price of 100 $/t a 23% reduction of CO 2 emissions relative to 2000 is achieved. Nearly 2/3 of the reduction are achieved in the power sector (CCS, renewables, CHP). ii. To reach a 50% reduction target (CPLUS): 1. Further reductions are mainly realized in the end-use sectors (electrification, biofuels, savings) with marginal abatement costs of up to 330 $/t CO Regional mitigation: OECD countries reduce emissions 60-71% compared to 2000 levels, transition economies by 50% and developing countries by 23%. Relative to (100 $/t), largest reductions are realized in developing countries. 3. If CCS is not available global average mitigation costs increase from 44 $/tco 2 to 218 $/t CO 2 in Uwe Remme, G.C. Tosato ETSAP-TIAM Model October

17 Ongoing and Future developments Ongoing model development: i. Validating the regional data ii. Refining the regional resolution (merge EU states in EU27+, split-up of FSU into Russia, Central Asia Caucasus, redefinition of East Europe) iii. Improved representation ti of energy corridors for trade iv. Definition of a new objective functions for maximising the diversity and studying trade-offs between emissions, security and costs v. Two way soft-linking with a general equilibrium model (GEM-E3) Future model development: i. Building common scenarios with the version of ETSAP-TIAM where one nation is extracted from its region and trade-offs are studied ii. iii. Description of major industry sectors by process technologies Detailed analysis of emission from land use iv. Study of retroactions of mitigation into the energy systems (hydro, cooling, etc.). Uwe Remme, G.C. Tosato ETSAP-TIAM Model October

18 Thank you! Uwe Remme, G.C. Tosato ETSAP-TIAM Model October