2nd June 2009

The Critical PathEnergy System Decarbonization

Stephen StrettonResearch Associate, Cambridge Centre for Climate Change Mitigation Research (4CMR) http://www.4cmr.orgFounder, Cambridge Zero Carbon Society http://www.zerocarbonnow.org

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ContentsEnergy System Decarbonization

• Why?

• Terminology

• Carbon

• Rough Numbers for UK (Physics)

• Land

• Cost

• Rough Numbers for UK (Economics)

• The Critical Path

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Why?

Why? Energy demand is rising rapidly

* In agreement with the recommendations from the Royal Commission for Environmental PollutionSources: Reference Scenario, IEA (2004) World Energy Outlook; A1T Scenario IEA (2003) Energy to 2050

-

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

45,000

1990 2000 2010 2020 2030 2040 2050

Year

En

erg

y D

eman

d (

GW

)

Reference Scenario

Fast Economic Growth - A1T

Notes• All energy (not just electricity) is expressed in terms of GigaWatts (GW)*.• 1 Gigawatt = 0.75 Million Tonnes of Oil Equivalent per year = 8.8 Terawatt-Hours per Year• 1 Gigawatt is the usual size of a nuclear power station or large coal power plant

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Why?

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Carbon: Terminology

Carbon Emissions Per Person Per Year (tonnes CO2eq)

High Carbon ~10

Lower Carbon 4

Low Carbon 2

Ultra-low Carbon 1

Zero Carbon 0

Negative Carbon <0

*Imports of embodied energy not included

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Technology: Terminology

Technology LCA

gCO2eq/kwh

High Carbon Coal ~1000

Lower Carbon

Gas ~400

Low Carbon CCS ~150

Ultra-low Carbon

Renewables & Nuclear? ~5 to ~50

Zero Carbon (Decarbonize Lifecycle Costs) ~0

Negative Carbon

Reforestation

Biomass with CCS

Air capture

<0

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Source: Parliamentary Office of Science and Technology

Carbon: All Electricity Technologies

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CSD

‘Low-Carbon’Tech.

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Physics Rough Numbers

Total Per Person

Carbon Emissions 600million tCO2/yr + Imports

10 tCO2/yr

Energy Consumption

300GW 5kW

Electricity Consumption

~45GW 1kW

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Land

Energy Source

Density

MWavg/km2

Biomass ~0.5

Wind ~2-3

CSP ~15

See

www.withouthotair.com

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Do Everything… to Save the Planet!

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Construction Costs Not adjusted for load factor – Study Data (2000-6)

$0

$1,000

$2,000

$3,000

$4,000

$5,000

$6,000

1 Coal-clean

5 Gas-central

8 Nuclear electricity

9 Hydro electricity

10 Biom

ass crops

12 Wind onshore

13 Wind offshore

14 Solar P

V-silicon

18 Solar therm

al conc

21 Geotherm

al

22 Gas w

ith CC

S

23 Coal w

ith CC

S

26 Fuel cell (dist)

Mid-range Estimate

US Data

EU Data

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UnitCost

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Unit Costs p per kWhLevelized Costs pence per kWh

-

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0

Coal (PC) Gas Nuclear£2bn/GW

Nuclear -£3bn/GW

Onshore Wind Offshore Wind Coal CCS

Waste & Decommissioning

Carbon Cost

Fuel Cost

O&M Costs

Investment Costs

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Economics Numbers

Total Per Person

GDP £1.2trillion/yr £20,000/yr

Public Spending £500billion/yr £8,000/yr

Market Value of Houses etc

£7trillion £100,000

National Debt £700billion £12,000

Other Liabilities

Old nukes / PFI / Pensions / Banks

~£500billion?

£70bn / £100bn / £200bn / £150bn

£9,000

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Fiscal Reform

1.Tax ‘bads’

2.Remove tax on ‘goods’

3.Tax ‘rent’

• Fossil fuels are both a ‘bad’ and a ‘rent’

• So “change VAT to CAT”

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Investment Cost & Tax Revenue

• UK needs 300GW to sustain current energy use. 1GW costs ~£2bn.

• £600bn cost = 50% of one year’s GDP– UK energy spend ~£100bn on energy each year

– Cost of Trident £40bn total

• £100/tCO2 (10p/kgCO2) would– Add £50 to a barrel of oil

– 4p/kWh on gas

– 10p/kWh on coal

– 23p/litre on petrol

– Raise £60bn/yr initially

– £1000 citizens income or replace VAT

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Discussion Points• How do we scale up renewable R&D by a large factor &

coordinate internationally?

• How fast can we build a super-grid with CSP?

• Does doing one technology prevent us from doing another? Are possible supply chain shortages ‘across’ technologies or ‘within’ technologies

• If the cost of high and low carbon are the same, is there any financial limit on what we can do? Does tackling climate change then cost anything at all?

• If new technology costs more, is there a limited ‘pot’ of subsidy to be allocated to most promising technology?

• Can ‘inflexible’ technologies promote a path to electric-car charging, leading to further intermittent renewable power being easily integrated?

• Market Incentives (19th Century Railways) or State Intervention (20th Century Wars) or Both?

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Conclusions: The Critical Path1. Public Understanding and Proposed Policy2. Skills and Capacity Building3. Govt Guarantee Carbon & Electricity Prices4. Secure Finance e.g. with ‘Climate Bonds’5. Start Energy Efficiency Rollout6. Build Energy Infrastructure7. Fiscal Reform: ‘VAT to CAT’8. Strategy transfer around the world9. Switch Transportation10.Complete Decarbonization of Britain and other countries11.Reforest the world12.Permanently avoid fossil fuel extraction

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Thanks for your attention!

Contact me:Stephen Strettonsjs53@cam.ac.uk

Links:http://www.4cmr.org

http://www.withouthotair.comhttp://www.zerocarbonnow.org

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Resources

• Renewables: not finite, but diffuse

• Gas & Easy Oil: running out

• Coal: plenty to hang ourselves

• Uranium: – ~25 000GWyr known (500GW x 50yrs)

– ~75 000GWyr estimated (1500GW x 50yrs)

• Multiplication Factors– Price-driven discoveries?

– Thorium (x2)

– Seawater Uranium (x50)

– Depleted Uranium (x40)• E.g. Fast Breeder

Proliferation Risk?

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Carbonomics meets Freakonomics…

Total Per Person

Carbon Emissions 600million tCO2/yr + Imports 10 tCO2/yr

Energy Consumption 300GW 5kW

Electricity Consumption

~50GW 1kW

Land Area ? ?

GDP £1.2trillion/yr £20,000/yr

Public Spending £500billion/yr

Market Value of Houses etc

£7trillion £100,000

National Debt £700billion £12,000

Other Liabilities

Old nukes / PFI / Pensions / Banks

~£500billion?

£70bn / £100bn / £200bn / £150bn

£9,000

Electricity Generation PolicyAdditional Slides

Contents

• Introduction & Recap

• Low-Emissions Electricity Sources

• Heating, Transportation and Industry

• Economics of Energy

• Solutions: World / UK

• References

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Introduction: Climate Change & Energy

• Gases such as Carbon Dioxide (CO2) and Methane absorb re-radiated heat in the ‘Greenhouse Effect’.

• The combustion of fossil fuels such as coal, oil and natural gas, releases CO2 into the atmosphere, increasing this effect. Global Concentrations of

Carbon Dioxide

280

300

320

340

360

380

400

1959 1969 1979 1989 1999

ppm

v

Sources: CO2 graph shows trend shown without seasonal fluctuation. Data from Mauna Loa Observatory, Hawaii; Cover Photo © Nasa; Temperature graph from http://www.globalwarmingart.com/

Effects of Climate Change (1)

Source: Adapted from Warren, R (2006)

(Present Day) – Some effects already seen

Oceans damaged

Greenland ice melts (raising sea levels eventually by 7m)

Amazon rainforest collapses, releasing CO2

Increases in extreme

weather (e.g. hurricanes)Agricultural yields fall

Tropical diseases spread

Global heat circulation

system collapses?

Hundreds of millions at risk from hunger & drought

CO2 released

from forests and

Soils

Methane released from peat

bogs & oceans?

Desertification of large parts of Earth’s surface

World ecosystems cannot adapt

Positive Feedback: Warming causes further release of greenhouse gases

Effects of Climate Change (2)

• Wholesale desertification of Earth possible within 100 years.

• Large population centres (China and India) at risk

Source: Lovelock, J (2006)

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Should We be worried?

• GW is major threat.

• Rational ranking of risks: GW ranks above nuclear power risks.

• Still uncertainty over final emissions, final warmth, final outcomes

• ‘Russian roulette with our children?’

• Collective action problem

• Mancur Olson (1982): “... If we finally get the information that the ecosystem can’t take any more, then it is important that we have the open-mindedness needed to change our views and policies the moment decisive information arrives. Those who shout wolf too often, and those who are sure there are no wolves around, could be our undoing”

• (Olson, M. Environmental Indivisibilities and Information Costs: Fanaticism, Agnosticism and Intellectual Progress The American Economic Review Vol 72, No 2. Papers and Proceedings of the Ninety Fourth Annual Meeting of the American Economuc Association (May 1982) 262-266)

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The Sovereignty of Nation-State

• A Basic precept of Domestic politics and International Affairs

Consequences: • Nation States can impose taxes & laws,

democratically agreed• Nation states act ‘selfishly’ in international

arena

• No strong Global institutions

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“The Tragedy of the Commons”

• Each country acts in its own self interest.• No-one takes responsibility for the common

good.

• VERY TRAGIC• Policies to convert away from fossil fuels may

cost nothing or a negative amount on a global scale

• However, there are solutions that are attractive on a national scale.

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Welfare Economics Perspective

• Have a Environmental Externality

• Need a Binding International Agreement so that private costs = social costs e.g.:– Global Carbon Tax or

– Global Emissions Trading

BUT

• No global government – no taxation

• International agreement difficult

• Agreements are in any case not enough

• Incentives for countries to defect

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A Simple Management Perspective

• Have a Problem

• Need to find Solution

• Keep it simple!

• Importance of leadership.

"Fast Economic Growth" (A1) Business as Usual Scenario

-

10,000

20,000

30,000

40,000

1990 2000 2010 2020 2030 2040 2050

Ene

rgy

Con

sum

ptio

n (G

W)

-

1

2

3

4

Com

mitt

ed (C

O2-

indu

ced)

Tem

pera

ture

Ris

e

Low Emissions Energy

Fossil Fuel Energy

Temperature

Dangerous Threshold

Passed

(550ppm)

(2100 CO2 concentration

920ppm)

(CO2

Now: 380ppm)

•Model committed temperature (the temperature rise expected as a result of emissions up to that point).

•Note that temperature rises do not include the effect of other greenhouse gases such as methane.

•For spreadsheet model and discussion of assumptions see website: www.zerocarbon2030.org.

Sources: Sceffer, M et Al. (2006), Defra (2006).

“Business as usual” would lead to disaster within a few decades

Sustainable development (lower growth) with complete conversion to low- emissions energy plus additional reductions in consumption

-

10,000

20,000

30,000

40,000

1990 2000 2010 2020 2030 2040 2050

Ene

rgy

Con

sum

ptio

n (G

W)

-

1

2

3

4

Com

mitt

ed (

CO

2-in

duce

d)

Tem

pera

ture

Ris

e

Reduction In Use

Low Emissions Energy

Fossil Fuel Energy

Temperature

Conversion to a zero carbon economy + less total energy used…

Source: IEA (2003) Sustainable Development (SD) scenario with additional reductions.

Danger Avoided

!(Stabilisation @ 400ppm)

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A Zero Carbon Plan

Saving Planet Earth: What will it take?

• Immediate Reductions in Energy Consumption

• Large Increase in Sustainable Energy Supply

• Eventual conversion of economy to use low emissions electricity or hydrogen

A 90% Reduction in CO2 emissions by 2030

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World Energy Consumption by Major Sectors (excludes biomass)

Oil

Gas

Coal HydroNuclear

Electricity is the Solution

• Biomass/Energy crops

• Biomass/Energy Crops (with sequestration)

• Fossil fuels with CO2 Sequestration

• Nuclear

• Renewables●Wind●Solar●Hydro●Tidal●Wave●Waste

Electricity

Liquid Fuels

Energy Source Main Energy Vector

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All Energy By Sector

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Electricity Only

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Source: POST note

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Source: POST note

Fossil Fuels - Use less!

Gas • Imported• CO2 emissions

Oil• Imported• Required for sectors which cannot be converted to electricity

(Aviation, Heavy Road Freight, parts of Industry)

Coal• High availability• But high emissions of CO2

CO2 sequestration with gas or coal? • Reduce CO2 emissions by 80%-90%?• Gas (or Coal-gas) turbines for load following• Cost higher than burning fossil fuels directly

Need a Large Scale Alternative to Fossil Fuels

CO2 Sequestration (With a Carbon Tax)

• Fossil fuels burnt and CO2 then buried in underground rock formation.

• Potential solution for areas with large amounts of oil & natural gas (Middle East; North Sea?).

• It requires extra energy to compress CO2.

• Does not eliminate emissions (~10% escape?).

• Overall, perhaps an ~85% reduction in CO2 compared to natural gas.

Sequestration is always more expensive than directly burning fossil fuels:

However, capital requirements are less than other optionsImage: CO2 Sequestration From Wikimedia Commons

Renewables ~ about 11% of total UK energy demand?

0.6Hydro

11%Maximum Renewable Contribution

230UK Final Energy Demand

3.8Waste (Residues; Municipal; Landfill gas)

26.5Total UK Renewable Capacity**

3.8Wave

0.2Tidal

0.1Solar (Photovoltaic Cells)

11.4Wind (Offshore)***

6.5Wind (Onshore)

Max Capacity (GW)*Energy Source

*Interdepartmental Analysts Group estimation of maximum capacity available at less than 7p/kWh (current price 2-3p/kWh).Apart from hydro figures from RCEP study (all large opportunities already used; small scale hydro adds <0.1GW).

**Energy Crops Excluded for Environmental Reasons (Land Area, Indirect emissions).***Offshore wind included but note that large rotating objects interfere with UK coastal radar.

Nuclear?

Image: AP1000 © Westinghouse 2005

Modern Nuclear Reactors(e.g. Westinghouse AP1000European PWR, Canadian ACR)

• Construction time? 5-7 years

• Compact

• Constructors take price risk?

• Inexpensive decommissioning?

• Reduced fuel consumption?

• Much less waste?

• Price competitive with gas

• Little capacity constraint

• Cheap, modular, mass produced reactors for UK, China and US?

Problem: Electricity is not always suitable for transport, heating & industry

• Energy Crops (0%)

• Renewables (12%)

• Fossil fuels with CO2 Sequestration

• Nuclear

Energy Source

Can Only Generate Electricity UK CO2 Emissions-

160m Tonnes pa

Road transport

20%

Refining etc6%

Other industries

17%

Aviation 5%

Electricity Gene-ration29%

Residen tial-15%

Other8%

What about transport,

heating and industry?

Heating, Transport and Industry

Domestic heating (currently mostly gas)

Transport(currently oil)

Industry(coal, oil & gas)

How do we convert to

low emissions electricity?

Converting Domestic Heating

Heat pumps can be installed in both new and existing houses

Heat pumps

• Move heat from a low temperature heat source (such as the ground outside) and transfer it to a high temperature heat sink.

• Powered by electricity (from nuclear or renewables).

• Uses up to 80% less energy.

• Using pump to heat a domestic water tank can smooth demand & store energy.

Image: Heat Pump theory From Wikimedia Commons

A heat pump uses electricity to move heat from outside to inside a home. It works on the same principle as a

refrigerator reversed. Heat pumps use 50-80%

less energy than gas boilers.

Converting Domestic Heating (2)

The Zero-Emissions House

Ground source heat pumps

+ Better house insulation

+ Underground air circulation

+ In/Out heat exchanger

= 90% reduction in energy consumption

If we use non-emitting electricity (e.g. nuclear or micro-generation), CO2 emissions from domestic heating could be reduced by 99%.

Building regulations must ensure that

all new houses have low emissions.

Combining a heat pump with a well -insulated hot water tank

allows energy to be consumed overnight when prices are low.

Converting Transport: Short distance

Electric Cars

• Technologies developing quickly, following success of Toyota Prius

• Full conversion possible by 2030

Reductions in car use

• Charge for road congestion

• Health benefits of walking and cycling, especially for children

• Better urban planning & public transport

Image: Toyota Prius From Wikimedia Commons

Electric cars store energy in batteries when recharged overnight (when

electricity prices are low).

Hydrogen fuel cell technology developing and may be in use by 2030. Hydrogen can be produced

using next-generation nuclear power stations.

Converting Transport: Long Distance

Rail

• Improve network

• Build new freight lines

• Upgrade urban transit systems (Crossrail)

• Reduce ticket prices

Aviation

• Tax aviation more heavily (noise, CO2, congestion)

• Ban night flights

Image: Eurostar

Travelling by rail uses much less energy than travelling by car or by

plane.

Converting Industry

• Imposing a carbon tax without a low-emissions alternative would encourage industry to leave.

• Industry requires a secure, reliable and cheap alternative energy source.

• Nuclear electricity is low cost (especially at night) and provides a secure and independent source of energy.

• Some (heavy) industry cannot be converted.

• There is currently no other solution than nuclear energy.

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CO2 Reduction Target

• UK Target: CO2 emissions 80% reduction on 1990 levels by 2050

• Sweden recently adopted same target

• Significant progress (30% reduction) by 2030

• Aim is that such cuts, if adopted worldwide, would avoid ‘Dangerous’ Climate Change

• More recent evidence suggests even deeper cuts may be required

• Some countries may not cooperate, so perhaps UK cuts need to be even deeper to compensate/lead?

• Is a near-zero carbon economy economically feasible?

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Security of Supply

• North Sea oil and gas are running down.

• Natural Gas provides a large and increasing proportion of our supplies

• Britain now net importer of gas

• Possible Fuels:

– Natural Gas from Algeria, Russia...

– Oil from Middle East…

– Coal: reserves are local (but most mines have closed; environmentally very damaging).

– Uranium from Australia and Canada.

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Where is the Oil?

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Total Energy Exports (GW)

-1000

-500

0

500

1000

1500OECD North America

OECD Europe

OECD Asia

Non-OECD Europe

Former USSR

China

India

Rest of Asia

Latin America

Africa

Middle East

Net Energy Importers

Net Energy Exporters

Energy Security

Source: IEA (2005)

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Economic Efficiency

A solution that maintains material prosperity:

a) People wish to maintain a comfortable standard of living

b) British policy will be more influential if we are seen to be prosperous

c) Balance of payments

d) Sustainability and demographic transition requires ‘genuine saving’ (capital investment).

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Risk(1)

YOLL = Years of Lost Life ExpectancyTotal Global Energy Consumption ~100 000Twh globally/year – Nuclear 2500Twh globally/year

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Risk (2)

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Nuclear Proliferation?

Total Primary Energy Used Equivalent to10 Billion Tonnes of Oil per year

or 14 Billion Kilowatts

OECD North America

OECD Europe

OECD Asia

Non-OECD Europe

Former USSR

China

India

Rest of Asia

Latin America

Africa

Middle East

Have Existing Nuclear Industry

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Total CO2 Emissions = 25 Billion Tonnes per year

OECD North America

OECD Europe

OECD Asia

Non-OECD Europe

Former USSR

China

India

Rest of Asia

Latin America

Africa

Middle East

Have Existing Nuclear Industry

*Does not include CO2 emissions from deforestation

Major polluters already have a nuclear industry

The French Experience

• Major building program 1970s – 1990s.

• Now 80% of electricity is generated by nuclear.

• Realised economies of scale by using one design.

• Often with duplicate units on same site.

• France now has the lowest electricity prices in Europe.

• Electricity is a major export good.

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What makes a difference?

Uranium Reserves?

• Concentrated in stable countries such as Australia and Canada.

• Sufficient for a large expansion in the nuclear industry.

• Fuel costs are only a small part of cost of nuclear – rises in Uranium price will lead to more reserves becoming economic.

• Fast breeder reactors or Thorium can take over if Uranium becomes scarce.

• New technologies (chemical nets) are being developed for efficiently extracting nuclear from seawater with low energy expenditure: Uranium in sea water is replenished constantly, so it is practically unlimited.

• UK has large existing supplies of Plutonium (100 tonnes: 2/3 of global civil separated uranium) which can be burnt in ‘Mox’ fuel.

• Globally, decommissioned nuclear weapons are also a potential source of fuel.

Nuclear: What are the Constraints? (1)

Nuclear: What are the Constraints? (2)

Available Sites

• Some nuclear reactors (first few) can be based at existing sites.

• New reactors much more compact: more than one reactor can be built in each place.

• For a 100GW expansion, perhaps 50 new sites (not threatened by flooding or coastal erosion) should be found across Britain. Need public information campaign about new reactors.

• Public acceptability of nuclear will increase if it is seen as a solution to the problem of climate change.

Skills

• Main constraint for the UK.

• We need a massive program to train of the order of 100,000 new nuclear engineers over the next few years.

• Better science/maths at school (teacher pay?).

• Sponsorship programs for young engineers.

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Nuclear Costs and Risks

• 100 GW of new nuclear capacity in UK

• Cost: £20bn pa over 10 years

• Approximate Cost ~ £2bn per GW.

• Could be built in private sector (or partnership of public and private)

• Government must reduce financial risk for private investors:– Some government help with initial planning and regulatory issues.

Need to ensure standard designs (EPR, AP1000, ACR) to achieve global economies of scale.

– Guaranteed minimum prices.

– ‘Non-carbon’ obligation?

– Strong statement of intent.

– Some direct public investment?

– Electricity market design to encourage private investors in nuclear.

– Price guarantees can massively reduce financing cost but need not put the government at financial risk (since government has control over carbon taxes).

Benefits of this Plan

a) Britain would have sufficient, secure, low emissions, low-cost energy for 50 years.

b) Strategic independence.

c) Massive reduction in CO2 emissions.d) If internationally standard designs were used, there would

be beneficial effect on economics of nuclear power world-wide:a) Reduced uncertainty for investors: b) Learning by doing and economies of scale.

e) British industry would have a low cost low carbon energy source. Governments could put up taxes on carbon without industry moving abroad.

f) Britain would give a moral example on CO2 emissions to the rest of Europe and world.

g) Market Design innovations would aid US policy makers

Summary

• To prevent ‘dangerous’ climate change we need to act rapidly.

• We must invest in all low-emissions technologies.

• Nuclear can generate a large part of our total energy (not just the part that is currently electricity).

• If UK built 100 or so low-cost mass-produced passively safe modular nuclear reactors, the world would have a safe, clean unlimited supply of power that would be cheaper than all fossil fuels.

• Cars and domestic heating can be converted to run off electricity. More freight can be transported by rail.

• Cuts in consumption (e.g. aviation, long distance car use) are also necessary.

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Economic Policy

• Shift entirely from Taxing Jobs and Investment to Carbon Tax (see Stern report; Adrian Wrigley’s presentation on Wiki)

• Specific Electricity Price Guarantees in the Power Sector

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Existing Economic Instruments

• Climate Change Levy: A tax on industrial users of energy. Levied in terms of energy content not carbon content.

• Renewables Obligation: substantial incentive for renewable forms of energy

• EU Emissions Trading Scheme: ‘cap and trade scheme’

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What is the Renewables Obligation?

• The Renewables Obligation requires licensed electricity suppliers to source a specific and annually increasing percentage of the electricity they supply from renewable sources. The current target is 6.7% for 2006/07 rising to 15.4% by 2015/16. It is expected that the Obligation, together with exemption from the Climate Change Levy for electricity from renewables, will provide support to industry of up to £1billion per year by 2010.

• At the end of 2005, generation from renewable sources eligible under the Obligation stood at 4%.

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What is the Climate Change Levy?

• Climate change levy (CCL) is a tax on electricity, gas, coal and liquefied petroleum gas (LPG) used for energy, and is levied on the non-domestic sector. The levy is intended to encourage business to use energy more efficiently and is designed to help the UK meet its targets for cutting greenhouse gas emissions – in particular, to reduce carbon emissions. More broadly, improving energy efficiency also helps businesses to reduce their energy costs and makes them less vulnerable to energy market volatility.

Commodity Legal Rate Pence/kWh

Electricity 0.43p/kWh 0.43

Natural Gas 0.15 p/kWh 0.15

LPG 0.96 p/kg 0.07

Coal 1.17 p/kg 0.15

Charged on all electricity (including nuclear)

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Cost of Fossil Fuels Rising

Cost of Fuel

OilGas

Coal

Amount Extracted(100

years)(200 years)

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Other Fuels?

Cost of Fuel

Amount Extracted

Uranium

Solar

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Diminishing Returns

Energy Efficiency: easy to make small changes: hard to make large improvements

Technology: greater investment, the lower the price: ‘learning by doing’

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“Learning by Doing”

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Energy Supply in USA

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CarbonTax

EffectsofDifferentRates

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Cost of Generating Electricity

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Cost with and without Carbon tax

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Cost Breakdown

Wind (offshore)

Nuclear Fission

Gas (CCGT)

Coal (IGCC)

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Cost: Assumptions

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Note the methodology used for standby generation in this study has been disputed, but that wind has systematic impacts on the electricity grid (associated with intemittency) with an associated cost.

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Source: John Bower, Oxford Institute for Energy Studies (OEIS)

Current 2020 CO2 target implies electricity decarbonisation by 2020

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Why is there under-investment in electricity generation capacity?

• Too much financial risk.

• Uncertainty over:

• Future price of Carbon

• Future electricity prices

• Future fuel prices

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Volatile Energy Prices (Gas, Oil and Electricity)

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A Solution for the World?

Source: IEA (2005)

A solution for the UK?

702030: Reductions in Use

90%Reduction in CO2

Emissions:

15.7 0.26 160 Total

8.21 0.5515Oil ##

2.63 0.1320Coal-Gas with (partial) Sequestration#

0.99 0.0425Renewables***

3.85 0.04100Nuclear**

162  230 2005

(Mt CO2 / year)(t C/ GW)(GW)

Total EmissionsEmissionsIntensity*Energy

*Emissions intensities include whole lifecycle (so emissions in construction are allocated across lifetime of reactor.**Does not include excess heat used in industry and homes or desalination **Also excludes any contribution from next-generation nuclear plants (hydrogen production?)*** Entire capacity used, except energy crops (excluded for environmental reasons: land area/indirect emissions)***Renewables (mostly wind) assumed to have approximately same emissions intensity as Nuclear.# Using gas turbines with CO2 Sequestration (85% reduction in CO2 eliminated relative to gas alone).## For Aviation, Heavy Industry, Road Freight etc Also includes other unavoidable CO2 emissions

Trains

Electric Cars

Heat Pumps

Zero Carbon 2030Now

UK CO2 Emissions- 162 Million Tonnes pa

Road transport

20%

Refining etc6%

Other industries

17%

Aviation 5%

Electricity Gene-ration29%

Residen tial-15%

Other8%

Total Energy - 230GW

Electricity17%

Oil for Road

Transport24%

Oil for Aviation

8%

Oil: Industry/

Other 15%

Other3%

Gas Residen tial-20%

Gas Other13%

Total energy = ‘Final Energy’ net of refinery and generation losses2030: Total energy does not include other uses for nuclear heat.

References

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