As I started my previous post, energy allows us to live and our lives are dedicated to obtain energy. We need to control CO2 emissions because it has been demonstrated that CO2 provokes a rise in temperatures. Population increases exponentially, more energy will be demanded in a world scale; more CO2 will be emitted if we do not change our energy system.
In this post I am going to analyze and process such an interesting scenario analysis from Stephan Spiecker and Christoph Weber from the University of Duisburg-Essen, Germany.
In this document it is assessed the future of European electricity system and the impact of fluctuating renewable energy until 2050 and based on 2010 situation.
As in real life, the study is based in the triangle of energy:
There are too many factors and antecedents that show us that we are going to increase precautions taken for slowing down human activity emissions.
Four approaches have been taken into account for viewing the future CO2 reduction:
- Price on GHG emissions
- Technological progress
- Command and control
- Life style
In this model it has been introduced the stochastic behavior of renewables through many variables. Some constraints such as capacity, resource potential, maximum demand or security adjustment have limited the model in some peaks.
Two things that this model shows are that there is no current technic available for electricity storage and neither for Carbon Capture Storage (CCS). This facts would change this model and hence the entire electricity system and future policies.
Based on the approaches given, the model proposes five different scenarios. I think these scenarios include future possible situations towards we are heading, based on current indicators.
I. Conflict (base case)
This scenario includes current conflicts between renewable energy sources and no consistent climate policy. There is also divergent opinion about nuclear. Renewables are put into place from 2030. Energy demand follows a medium growth path with no variations with its behavior until now. This scenario the base case since it is the most likely if important changes do not take place.
II. Climate-policy: renewables and energy efficiency
Here it has been introduced an important policy objective of reducing CO2 emissions. Nuclear is phased-out. Carbon Capture and Storage technologies are not put into practice.
III. Climate-market: relying on market mechanisms
In this scenario there is not exogenously stimulus for renewable. Abatement costs for CO2 emissions mainly drive investment in renewable energies because those emissions will be paid.
IV. Efficiency: market forced
In this scenario competition and innovation will be regulated by governments. There will be also environmental targets of low carbon economy. In this scenario energy demand by 2050 will be like today due to energy efficiency. Nuclear and CCS appears are put into place.
V. Growth: security
In this scenario domestic energy sources and those with diversified sourcing are prioritized. Climate change stands for a minor goal but the major goal is security supply. There is a demand increasing. Because of that not only renewable energy sources develop but also gas, coal and nuclear.
For the future electricity system assessing, we should start from today. It is interesting the current situation according to Spiecker and Weber (2011) and according to the technical and economic energy sources potential.
This graph summarizes all debates around biomass in Spain. Spain is the European country with the largest biomass potential. However, Austria is the more important supplier of biomass technology such as biomass boilers at least in Spanish market. Spain is also the third largest country in PV potential. That potential is electric potential. Figures change if we speak about heating, but it is clear Spain should immediately take action in managing its forests and yields so to get from them bioenergy as one of the most important countries in the world. It means also being one of the most important technologies exporters of the sector, indeed it was in wind energy recently. Whatever scenario in which Spain would not be one of the references in renewable energies both as consumer and technology exporter it would be a political failure due to the objective and measurable potential is has.
The results of the model are rather interesting.
- Impact on electricity prices, CO2 prices and system costs
In the following graphs we can see how base prices of electricity evolve for each different scenario. These prices are real terms not weighted by demand.
The reason for that behavior is because of the increase on fuel prices, CO2 limits and renewables expansion.
The following graphs show the average wholesale prices and system costs for power production in real terms. These prices are weighted by demand. Added to these prices are costs of renewable subsidies, costs of ancillary services and costs of capacity requirements.
The next graph shows the CO2 price development in real terms for different scenarios.
- Impact on capacity and production
At this part the paper from Spiecker and Weber is so detailed and elaborated.
We can see how capacity changes each decade until 2050.
We also can see each energy resource evolution in terms of capacity.
We can estimate how the different situation of each scenario differs for the same period of time using standard deviation.
We have a lot of uncertainty in Natural Gas because de wide deviation between scenarios. The more standard deviation we have, the more uncertainty in our results from the stochastic simulation. Logically, standard deviation or uncertainty grows each decade.
On the other hand we have the coefficient of variation. This coefficient relativized the standard deviation based on the orders of magnitude of capacity for each energy source.
Because of that we can see how Nuclear has a large coefficient of variations due to the uncertainty of this technology.
We can see how the electricity mix looks like in the year 2050 in comparison with 2010.
We can also see the evolution of each energy resource
As in capacity, we can assess in production how scenarios differ for each period.
In this case we can see that the coefficient of variation is bigger in Coal and Waste. It means that there is much difference depending on the scenario we have. In the case of Biomass for example, uncertainty grows with time, but at the end the coefficient of variation is not too big. It could mean that production from biomass will grow regardless of the scenario.
- Impact on cross-border power exchange
This study is focused on Germany. Maybe the German situation is quite different from the rest of Europe. But it depends also on France, because in the scenarios in which nuclear is phased-out the balance is closer to 0. This situation may occur in Spain: when societal concerns about nuclear were reduced more energy would be bought from France.
Despite a vision of a “green” European power system in year 2050, the path to this state itself and the continuity of this objective remain uncertain. There are scenarios in which a renunciation of current objectives is considered. In other scenarios the way to reach the final objective and the objective itself determines the model results. One of the things that achieve the model is to introduce the stochastic behavior of renewable energy sources.
According to JM Glachant and Sophia Ruester the EU internal market may derail greatly in the coming years from the effects of a massive push for renewables, as well as a growing decentralization of the production-consumption loop. Moreover, a serious concern is the risk of a definitive fragmentation of the European electricity market due to uncoordinated national moves with respect to renewable support and capacity mechanisms. Electricity is a strategic aspect for a country, and it is difficult to consensus all members in having the same strategy. It has been observed changes in the generation mix not only in the form of a shift from conventional fossil fuels towards renewables, but also in the form of a shift from centralized towards decentralized resources. Distributed storage might also become viable soon at all voltage levels and in significant amounts, becoming a critical component of the grid of the future.
The distribution grids might become the new core of the EU internal market, the key question should ask, from a market policy point of view, is HOW? How will distribution system operators operate and how will they be regulated and monitored?
All this simulations have huge amount of uncertainty, therefore the only clear thing that we can obtain from all of this is that the energy system is an impressive complex one and the amount of factors involved in the game are also impressively difficult to simulate.
Another conclusion is how important policy is. Sometimes we think that more important than policy is oil companies’ interest and maybe that is right. But we are witnessing a rise in oil prices. Because of that we should look the current trend and try to rebuild our energy system. However, the future of energy lies in the hands of a few.
Regarding to Spain is clear that this country should be more independent on fossil fuels because Spain has not deposits and because this resource is getting more expensive. According to Eurostat energy dependance of Spain is decreasing (73,3% in 2012).
Thermal energy for heat or air conditioning should come from biomass as much as possible and perhaps natural gas as could be the supporting source. Now the effort seems to be in gas. Despite of being necessary all energy sources some renewable energy sources are being questioned. In Spain it has been attempted to put part of the blame of the energy prices on renewables.
Renewables have shown its capacity to cover more than the 15,5% of gross final consumption of energy (2012). For 2020 is expected to be achieved the 20% target and at that point it will be generated more than 40% from renewables. That is why is very important to design further development of electricity interconnections between Spain and the European electricity system, a matter in which attention has been called in the report to Brussels. http://www.idae.es/index.php/mod.pags/mem.detalle/relcategoria.1153/id.501/relmenu.12
One practical example is the paper from Brian Songhurst, which analyzes the LNG Plant Cost Escalation and where it is said that one of the more important factors for the plant viability is the plant location in respect of the source of the gas and the final consumer. http://www.oxfordenergy.org/wpcms/wp-content/uploads/2014/02/NG-83.pdf
Use what you have unless what you do not have is clearly cheaper than what you have.
The EU internal electricity market: done forever? Glachant, Jean-Michel; Ruester, Sophia
The Future of the European Electricity System and the Impact of Fluctuating Renewable Energy – A scenario anlysis. Spiecker, Stephan; Weber, Christoph.