# Plan.be The challenge of running 100% renewable energy scenarios Methodological issues 2nd Ghent Summer School August 28, 2014 D. Devogelaer, FPB.

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plan.be The challenge of running 100% renewable energy scenarios Methodological issues 2nd Ghent Summer School August 28, 2014 D. Devogelaer, FPB

plan.be 100% what? Mission from 4 energy ministers in 2011: 1 federal, 3 regional ministers of Energy Concerns on climate, economy and SoS Time frame, target and consortium fixed: 2050 - 100% - FPB (fed), VITO (Fl), ICEDD (Wl) manoeuver within that framework

plan.be “You say you want a [renewable] revolution… We'd all love to see the plan” The Beatles, White Album, 1968 Relatively easy to calculate number of windmills, solar panels,... required, less straightforward to have them all available when needed (V)LT model  Scenario analysis How can we answer a question like this? Which model? Which scenarios? Which output? Which input?

plan.be The model

plan.be « En économie, un modèle est une représentation simplifiée de la réalité économique ou d'une partie de celle-ci. Comme dans les autres disciplines scientifiques, les modèles économiques utilisent le formalisme mathématique qui permet de représenter le modèle sous forme d'équations. Outre ces équations, les modèles empiriques sont constitués d’une banque de données propre et généralement d’un jeu de paramètres. « Source: FPB. a description of a system using mathematical concepts and language used not only in natural sciences (e.g. physics) and engineering disciplines (e.g. computer science, artificial intelligence), but also in social sciences (e.g. economics) may help to explain a system and to study the effects of different components, but also to make projections about future behaviour basically, a set of interrelated equations that can assign results either to a variable or to a dimension value Model: What(’s in a name)?

plan.be What is your research question? Which models are apt to answer the question? 100% study: Model TIMES 1. National energy system 2. VITO partner in project 3. Quick feedback loops 4. Experience with time horizon 2050 How do you define the choice of the model?

plan.be Partial equilibrium (energy) model Bottom-up optimisation model of the national energy system Detailed representation of energy-material flows and technologies (broad sense) Various alternative technological choices Up to 2050 Driving factor: fulfilment of energy service demand (≠ energy demand) Basic principles of TIMES model

plan.be Challenge: Dealing with variable renewable sources  daily and seasonal fluctuations Source: Elia.

plan.be 1. Cope with uncertainty of power supply Extending the temporal resolution to 78 periods in one year = 26 periods of two weeks x 3 periods a day Reserve capacity requirement (sum of nominal power of biomass plants, geothermal and storage facilities) Constraint to assure that BE can be self sustained for 14 consecutive days without counting on wind and solar 2. Day-night and seasonal electricity storage options 3. Alternative solutions to increase system’s flexibility Overproduction - grid disconnection  curtailment Endogenous steel production timing (not ‘just in time’) 4. Endogenous transmission and distribution network Major model improvements for dealing with variable character of renewable energy

plan.be The input

plan.be How do you go about? Literature review: problem of finding exactly what you need Geographical scope Time frame “Old” data Coherence … Stakeholders: want to have their say, can deliver valuable input, but Often not familiar with model specificities Often not aware of time lags of model One model cannot solve all Expert judgment: more difficult for references/objectivity Define assumptions

plan.be You will get attacked on your assumptions… always! Because it is no exact science e.g. oil price projections Because by the time your study gets published, assumptions can be out-dated -> the curse of the modeller By pressure groups, lobbyists, but also peers Solution: Perform sensitivity analyses to test robustness of results Often the definition of assumptions is an exercise on its own and can give rise to new studies! Define assumptions (II)

plan.be Background information Surface: 30.000 km 2 Population: 11 million (330p/km 2 ) GDP: 350 billion € Final energy consumption: 1800 PJ Per capita final energy consumption: 150% EU27 average or 75% US Hydro: limited to 120 MW Domestic fossil energy supply = 0

plan.be Belgian GDP: increases at an AAGR of 1.8% in 2010-2050 Fuel prices: Energy roadmap 2050, CPI, crude oil to some 127 \$’08/bbl in 2050 Carbon price: Energy roadmap 2050, CPI, 15 €/tCO 2 in 2020, 51 €/tCO 2 in 2050 CCS technologies: not allowed Coal: no investments in new coal fired PP’s Nuclear: current legislation on the phasing out of nuclear PP’s Electricity imports: limited to 5.8 TWh (average Belgian net imports 2003- 2010) Assumptions

plan.be Assumptions on renewable costs

plan.be Assumptions on electricity storage costs

plan.be The scenarios

plan.be Definition of scenarios Fossil Benchmark Scenario REF Fossil Benchmark scenario

plan.be The output

plan.be Results for REF

plan.be While presenting the results to the stakeholder committee, they noticed that costs for REF were relatively low -> in the search for an answer, it came about that investments in coal fired power plants were still allowed Relatively low prices in 2050 due to lack of oil indexation No GHG target so not penalised Changed that, so no new coal investments in power generation Analysis of results

plan.be Results for REN scenarios

plan.be Model has tendency to postpone investments: bulk of investments during the final decade Makes economical sense, but from a societal point of view non-sense Imposition of targets: 35% of primary energy in 2030, 65% in 2040, 100% in 2050 Analysis of results

plan.be Energy mix: Primary energy, 2050 Source: TIMES.

plan.be Energy mix: Final energy, 2050 Source: TIMES.

plan.be Source: TIMES. Energy mix: Power generation, 2050

plan.be Energy mix: Power generation capacities (MW), 2020-2050 DEM GRID PVBIOWIND

plan.be Storage capacities: Electricity (GWh), 2020-2050 DEM GRID PVBIO WIND

plan.be Energy mix: Energy flows in PV scenario (PJ), 2050 Source: http://www.emis.vito.be/artikel/naar-100-hernieuwbare-energie-belgi%C3%AB-tegen-2050-video

plan.be Costs: Energy system costs (M€2005), 2050 Source: TIMES.

plan.be Costs: Additional cost wrt REF (% of GDP), 2050 Source: TIMES.

plan.be Costs: Additional cost incl. avoided GHG damage cost (M€2005), 2050 Total annual add. cost wrt REF, when (global) benefit of avoided GHG in 2050 is included Lord Stern@Davos: ‘I got it wrong on climate change – it's far, far worse’ The Observer, Jan 26, 2013 No longer a cost...... but a benefit

plan.be Costs: Additional investments wrt REF (M€2005) Cumulative for 2013-2050Investments in 2050

plan.be Costs: Cumulative additional investment expenditures in the electricity sector (M€2005) Source: TIMES. Cumulative for 2013-2050

plan.be Some things ‘outside’ the model

plan.be Part of the assignment was to look at the socio-economical impact of the transformation Problem: not within modelling environment So you start again with a literature overview looking for an adequate model or instrument defining your data analysing your results … Some things outside the model

plan.be Article of Wei et al. (2010) Look at ways to adapt to Belgian situation Capacity factors Lifetime Domestic production … Gather data: define the input that you need and find sources Sources have to be as coherent as possible with each other and with the previous exercise Make spreadsheet model Run the model Employment

plan.be Employment: Some estimations The RES trajectories all create more job- years or FTE’s than REF REF already integrates a lot of renewables PV creates the most FTE’s in any given year BIO and DEM are the second highest job generating scenarios Source: Wei et al. (2010), Federal Planning Bureau (2013). Annual job-years generated over REF due to the RES trajectories, 2020-2030 Total FTE’s

plan.be Going from average to min-max ranges Going from all jobs to types of jobs Results in ranges of CIM and O&M and fuel processing jobs for the years 2020 and 2030 Employment: Some estimations (II) Source: Federal Planning Bureau (2013).

plan.be Employment: Some estimations (III) National macrosectoral model: HERMES { "@context": "http://schema.org", "@type": "ImageObject", "contentUrl": "http://images.slideplayer.com/10/2878435/slides/slide_40.jpg", "name": "plan.be Employment: Some estimations (III) National macrosectoral model: HERMES

plan.be Other things ‘outside’ the model

plan.be 6 critical areas of government action/intervention 1. Defining a clear institutional framework 2. Improving energy efficiency 3. Supporting renewable energy production 4. Improving energy infrastructure 5. Supporting research and development 6. Facilitating the electrification of the society Principles for designing policies  Cost effectiveness  Fairness  Competitiveness PAMs

plan.be Technically, a 100% renewable energy system is feasible without having to change the economic paradigm. However, such a radical society transformation implies that: o A highly ambitious renewable target goes hand in hand with a trend towards electrification: a doubling/tripling of power production is noted, curtailment is necessary o Energy imports strongly diminish but remain important: imports tumble from 83% (REF) to [42%-15%] depending on the scenario o Society shifts from a fuel intensive to a capital intensive society o It seems cost efficient to maintain overcapacities, both in industry and power generation  new paradigm in energy perception Conclusions (1/2)

plan.be Conclusions (2/2) o This comes at a significant cost: in 2050, energy system costs increase by 20% wrt REF, BUT… o When including disutility costs, the total add. cost is even higher (30%) o With disutility + GHG damage  net positive effect of some scenarios +/- 10 B€/year (highly dependent on GHG damage cost assumptions) o 300 to 400 billion € of additional investments are needed o Sensitivity to fuel prices and PV costs o PV costs from 371 – 1000 €05/kW p => variation of 0.5% of GDP2050 o Variant of REF scenario with higher oil prices (250 \$08/boe in 2050)  additional costs decrease o Creation of additional employment o 20 000 to 60 000 additional full-time jobs in 2030 o Cost efficiency of adapting to energy flow variability o Further research is certainly needed

plan.be Presentations  National  International TED conference Summer school (1&2) Other studies  Central Economic Council: Construction of a model capable of analysing the socio-economical impacts of ‘quelconque’ energy policy  Climact, VITO: Scenarios for a low carbon Belgium by 2050  ICEDD: Le coût d’une transition énergétique postposée en Wallonie  … Political  First Common Commission on Energy in 2013  Flemish Government’s demand to study 2030 implications Follow up

plan.be Thank you! Contact: Danielle Devogelaer, dd@plan.bedd@plan.be Dominique Gusbin, dg@plan.bedg@plan.be Jan Duerinck, jan.duerinck@vito.bejan.duerinck@vito.be Wouter Nijs, wouter.nijs@vito.bewouter.nijs@vito.be Yves Marenne, yves.marenne@icedd.beyves.marenne@icedd.be Marco Orsini, marco.orsini@icedd.bemarco.orsini@icedd.be

plan.be Space requirements: Surface (km 2 ), 2050 Results

plan.be External fuel bill Total energy import costs, Reference scenario (M€2005) Source: TIMES. +53%

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