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UK Energy Demand and Emissions Prospects to 2020:

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Assumptions: UK Fuel Prices. Coal, Crude Oil, Natural Gas. Coal. Natural Gas. Crude oil ... EU ETS allowance price: at 10-15 euros per tonne of CO2 over 2009-10, ... – PowerPoint PPT presentation

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Title: UK Energy Demand and Emissions Prospects to 2020:


1
UK Energy Demand and Emissions Prospects to 2020
  • A presentation to the Energy Insight Conference,
    National Motor Cycle Museum, Birmingham

Sudhir Junankar, Associate Director Cambridge
Econometrics (http//www.camecon.com/)
10 September 2009
2
Outline
  • Energy and UK policy assumptions
  • Economic background
  • Energy prospects
  • Total final energy demand
  • The power generation sector
  • Environmental emissions
  • Risks/uncertainties

3
Assumptions UK Fuel Prices Coal, Crude Oil,
Natural Gas
2003100
Crude oil
Coal
Natural Gas
4
Energy-Environment Policy (1)
  • 10 of UK electricity sales target for renewables
    by 2010 set to be missed, while 13.5 forecast by
    2020, is also below the Renewables Obligation
    aspiration of 20 RTFO at 3.5 in 2008/09, up to
    5 by 2012
  • EU-set 2020 target of 15 renewables share in
    final energy use also missed by wide margin,
    unless the July 2009 Renewable Energy Strategy
    leads to substantial new policy measures
  • CERT and CRC assumed to have some effect in
    improving energy efficiency by households and
    commerce
  • The July 2009 UK Low Carbon Transition Plan
    aspirations not included in our forecasts, as not
    yet reflected in firm policy measures

5
Energy-Environment Policy (2)
  • No nuclear plants assumed to be built to offset
    the expected decommissioning, as the 2008 nuclear
    power White Paper has yet to lead to concrete
    policy measures
  • Target of 10GWe of CHP capacity by 2010 looks
    unattainable even by 2020 without new policy
    measures
  • EU ETS allowance price at 10-15 euros per tonne
    of CO2 over 2009-10, up to 21 euros by 2012 26
    euros by 2020

6
Economic Background

GDP
CPI
7
Activity Indicators by Fuel User
average pa
8
Total Final Energy Demand by Fuel User Key Trends
  • After a 0.5 drop in 2008, steeper falls of
    -2.8 in 2009, -1.5 in 2010 due to the impact of
    the recession then broadly flat
  • Households short-term decline, then flat
  • Industry sharp drop over 2009-10 still declines
    to 2020 despite rising output
  • Commerce decline over 2009-10, modest growth in
    longer term due to output growth in key service
    sectors
  • Air transport rapid rise after 2010
  • Road use stable in longer term

9
Total Final Energy Demand by Fuel User
average pa
10
Electricity Demand by Fuel User
mtoe
11
Electricity Generating Capacity Key Trends
  • Total capacity rises from 85 GW in 2005 to 92 GW
    in 2010 more renewables and CCGT, but less
    nuclear and non-FGD coal
  • After 2010 capacity averages around 92 GW, with
    more renewables, CCGT, and CHP, offset by much
    less nuclear and no non-FGD coal by 2020
  • Investment in FGD coal capacity higher in our
    forecast, responding to the LCPD Gas 41 of
    generation by 2020

12
Electricity Generation
TWh

Note(s) 'Other' includes generation from oil-
and mixed-fired plant.Source(s) Cambridge
Econometrics.
13
Coal Demand by Fuel User
mtoe
14
Gas Demand by Fuel User
mtoe
15
Oil Demand by Fuel User
mtoe
16
Total CO2 by Fuel User Key Trends
  • Power generation a sharp decline over 2009-10 as
    lower electricity demand reduces coal use, modest
    fall over 2010-15 slight acceleration after 2015
  • Industry decline over forecast period
  • Road transport levels after 2010
  • Households moderate decline to 2015, but slower
    thereafter to 2020
  • Commerce decline over short term slight pick up
    over 2010-20

17
Compliance with Policy Goals
mtC
mtC
Kyoto target
Projected CO2 emissions
Projected GHG emissions
20 reduction goal
Note(s) GHG emissions have been scaled over
1990-2007 period to Defra figures to allow
for Land Use, Land-Use Change and Forestry
sector (LULUCF) net emissions. CE projected
growth rates are then applied to the 2008 figure,
assuming that the LULUCF net contribution is
constant over 2008-20.
18
Conclusions
  • Carbon emissions from power generation are set to
    fall markedly to 2010, due to recession fall
    more slowly to 2020, as non-FGD coal is phased
    out and gas-fired (CCGT) generation continues to
    rise
  • CCGT and FGD coal are set to remain important in
    UKs power generation mix, despite the sharp rise
    in renewables over the period to 2020
  • Overall carbon emissions are expected to fall
    markedly to over 2005-10, but modest decline to
    2020
  • The UK will easily meet its Kyoto GHG target
  • Carbon budget (2018-22) set to be missed, as no
    new nuclear and smaller renewable share in power
    generation need to buy permits to meet ETS caps
  • Key risks double-dip (W) economic cycle
  • or a sluggish upturn impacts on energy use

19
UK Energy Demand and Emissions Prospects to 2020
  • A presentation to the Energy Insight Conference,
    National Motor Cycle Museum, Birmingham

Sudhir Junankar Cambridge Econometrics
(http//www.camecon.com/)
10 September 2009
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