New Energy Externalities Development for Sustainability Final Conference "External costs of energy t

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New Energy Externalities Development for
Sustainability Final Conference "External costs
of energy technologies"
The NEEDS TIMES Pan EU modelling platform and
main results of scenario analysis
Vincenzo Cuomo Markus Blesl, Denise Van
Regemorter RS2a Modelling Pan European Policy
scenarios Brussels, February 17-th, 2009
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Main objectives

• Developing a new modelling framework for the EU
  as a whole, especially its multi-country aspect
  with trade exchanges among countries
• Contributing to policy evaluation through
• Integration of different objectives in one global
  modelling environment, allowing to evaluate their
  mutual interactions
• Evaluation of the optimal mix of options to reach
  severe energy-environmental targets
• Assessment of the structural changes in the
  energy system and the role of technologies in
  different boundary conditions
• Assessment of the role of external costs in the
  definition of policy strategies
• Scenario analysis for the evaluation of key EU
  targets

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Interactions among RSs

SOCIO-ECONOMIC ENVIRONMENTAL SCENARIOS
INITIAL TECHNICAL DATA (RS2a input from Other
Streams)
LIFE CYCLE DATA (RS1a)
EXTERNALITIES (RS1b, RS1c)
TECHNOLOGY DATABASE (ALL STREAMS)
COHERENT ENERGY-TECHNOLOGY TRADE PATHWAYS
(RS2a)
OTHER INDICATORS, SOCIAL ACCEPTANCE, MCDA (RS2b)
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Modelling Pan European Energy Scenarios
Key aspects Main EU Directives Stakeholder
preferences Country level detail
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A common integrated structure
NEEDS Project

• The NEEDS modelling platform

LCA of the most relevant power supply options

• Based on the TIMES multi-period linear
  optimization models generator
• Common structure of country models (RES-Reference
  Energy System)
• Common sources for the main data (energy
  balances, material flows, air emissions)

Energy system models of 30 EU countries (EU27,
CH, IS, NO)
Technology Database (inv cost, oper cost,
efficiency, ...)
Pan European Model

• Externalities of technologies for the production,
  transport, transformation and consumption of
  energy

The NEEDS TIMES PEM represents the reference
modelling platform for several outreach
projects/proposals in the framework of EU Programs
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The TIMES models generator

• Partial Equilibrium model
• Maximisation of the consumer/producer surplus
• Supply and demand quantities equilibrate through
  prices changes
• Perfect foresight
• Long term time horizon, to support the definition
  of long term strategies, taking into account
  different standards of energy devices, technology
  development and policy targets
• High technological detail in energy supply and
  end-use sectors (both existing and future
  technologies), potential of fossil and renewable
  resources by country, resulting in a data
  intensive model
• Approach based on full energy costs along the
  life-time of technologies and within the time
  horizon, i.e. including LCA components and
  external costs
• Normative perspective, focussed on the
  development needed under a policy scenario

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The modelling tools

• - A set of data files, the templates, that fully
  describe the energy system (technologies,
  commodities, resources and reference demands for
  energy services) in a format compatible with the
  associated model generator.
• - The TIMES model generator, written in GAMS that
  processes the data files, generates the matrix
  that specifies the mathematical programming
  problem, solves the mathematical programming and
  post-processes the optimization results.
• - The VEDA"shell", a user interface for creating
  and managing the data input, running the model
  generator, and analysing results.

• The structure of the PEM is similar to the
  country models one but with some additional set
  of data files
• Further Scenario Files.
• Additional Data Dictionary (DD) files for
  specifying further technical features and
  constraints.

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The country models

• Country models based on a common structure (RES)
• Supply
• Reserves, resources, exploration and conversion
• Country specific renewable potential and
  availability
• Electricity and Heat production
• Public electricity plants
• CHP plants and heating plants
• Industry
• Energy intensive industry
• Other industries
• Residential and Commercial
• All end use demand
• Transport
• Different transport modes

• Geographical coverage
• 30 European countries (EU 27 Iceland, Norway
  and Switzerland)
• Time horizon
• 2000-2050
• Energy carriers included
• (Eurostat, 2005) energy balances, with some
  aggregations
• Materials explicitly modelled
• Only those flows whose production requires much
  more energy or which are important for the
  production processes (e.g. scrap steel).
• Pollutants included
• GHG (CO2,CH4,N2O,SF6)
• LAP (SO2,NOx,CO,NMVOC,PM2.5,PM10)

The Iron and Steel industry RES
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The technology database

• A basic but fairly complete set of technologies
  and processes (existing and future) was carried
  out and included into the models data input for
  analysing technology development on the time
  horizon and performing scenario analysis.
• It includes a default set of technological and
  economical parameters and additional information
  on LCA and ExternE data, collected into a format
  suitable to be converted into a model
  user-interface ready format and available for
  direct import into the models
• Sectors considered
• Upstream (172)
• Heat and Electricity generation (124)
• Industry (223)
• Residential and Commercial (504)
• Transport (53)

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The Pan European TIMES model

• It is more than the sum of the 30 national
  models
• A multi-region approach at Pan EU level
  integrates the single EU countries energy models
• representation of the main energy exchanges
  between EU countries and also with non EU
  countries,
• Electricity trades are modeled via trade
  technologies
• it allows to reflect links and to impose
  constraints at the European level, reflecting the
  coordination of policies across borders and,
  consequently, the harmonisation of the underlying
  country models features and assumptions.

The NEEDS-TIMES modelling platform allows to
performing a more effective policy analyses both
on country level and in a EU wide perspective
enabling the definition of cross country
constraints.
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Main outputs

• Optimal energy-technology pathways by scenario
• Marginal costs of CO2 and resources
• Mix of fuels and technologies in electricity
  production and end-use sectors
• Emission pathways by scenario
• Long-term Oil and Gas demands by each EU country,
  by scenario
• The implemented modeling platform has a built in
  flexibility and distinguishes clearly the
  exogenous parameters from the endogenous
  variables.
• These features make it an effective tool to
  analyse the effects of different policy
  alternatives and to perform a sensitivity
  analysis of solutions

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The NEEDS Reference Scenario
The reference scenario describes the development
of the EU-27 energy system in agreement with most
of present policies and the latest DG TREN
projections. Main assumptions - Business as
usual trend of all exogenous assumptions around
drivers, energy prices and policies, as derived
with the help of the general equilibrium model
GEM-E3 (EU22 countries), and macroeconomic and
energy price background assumptions in line with
the DG TREN 2005 projections. - No limits on CO2
emissions a specific climate policy allowing for
a proper evaluation of Kyoto and post Kyoto
targets was not considered, instead a tax of 10
Euro/ton for CO2 was applied. - Use of renewable
energies, in line with national policies aimed to
promoting their utilization. - Implementation of
country decisions as concerns nuclear. In
particular, nuclear phase out was considered in
countries with corresponding aims or agreements
(Germany, Netherlands, Belgium and Sweden).
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The NEEDS Scenarios
The baseline results indicate that EU needs
policies to control carbon emissions and to
become less dependent on oil and gas imports.
Thus, the following scenarios were defined in
agreement with stakeholders
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New frontiers opened by the NEEDS modelling
platform

• The NEEDS modelling platform constitutes an
  integrated tool for the analysis of the EU as
  well as national energy systems, evaluating the
  effectiveness of different policy instruments and
  their long term impact in terms of energy and
  technology mix, emissions and costs.
• A tool for supporting stakeholders decisions, in
  order to evaluating
• The impact of targeted air quality EU policies
  (emissions standards) on emissions, costs and
  climate change
• The full costs and benefits of EU Directives that
  have an impact on the energy system
• The impact of different Post Kyoto strategies on
  the future of energy technologies
• The impact of alternative internalisation
  policies and their contribution to sustainability
• The technologies and policies that exhibit the
  most robust behaviour in an overall
  sustainability perspective

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Further modelling improvements

• Integration of additional sustainability criteria
  in models in order to more fully analyse
  sustainability of energy systems
• Integration with risk analysis
• Integration with other models covering the rest
  of the economy and more social aspects
• Use of multi-attribute optimization techniques
  combined with decision making analyses, to
  elaborate a compromise between the policy targets
  and the preference of EU stakeholders.

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Future perspectives and recommendations

• The TIMES NEEDS Pan EU modelling platform is now
  available and allows exploiting synergies and
  trade-offs for climate, local environments and
  energy systems
• It should be maintained and updated to be applied
  in new studies for policy analyses

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Current E.U. sponsored Projects Proposalsusing
Pan-EU TIMES models

• The set up of the NEEDS TIMES models pave the way
  for the development of a wide range of possible
  applications and have fostered a number of
  outreach initiatives among which
• Contribution to EU and national policy analysis
  (e.g. Ministry of Environment of in Estonia GHG
  reporting Template, IEA/ETO ETP2008 report
• New research projects (VII FP, IEE)
• RES2020 2007-2009 Focus on renewable energy for
  EU at horizon 2020 and beyond
• PLANETS 2008-2010 Focus on advances on how to
  deal with uncertainty in global and EU Climate
  Policies
• REACCESS 2008-2010 Focus on Security of Energy
  Supply for EU at horizon 2050
• REALISEGRID 2008-2010 Focus on Intra-EU (
  Balkans) Electricity Exchanges and Infrastructure

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Presentations of policy scenario results will
be given by

• Markus Blesl (IER,University of Stuttgart)
• Denise Van Regemorter (CES,Katholieke
  Universiteit Leuven)