electrification of heating and transport …...electrification of heating and transport consequences...

|

faculty of economicsand business

centre for energy economics research

Electrification of heating and transport

consequences for gas consumption, emissions and costs

Energy Days: climate policy and energy marketsTU Eindhoven, 28 March 2019

MACHIEL MULDER

Centre for Energy Economics ResearchFaculty of Economics and Business, University of Groningen

Joint research with Jose Moraga (VU Amsterdam), Chloé le Coq (Stockholm) en Sebastian Schwenen (München)

on request of CERRE (Centre on Regulation in Europe, Brussel)

|



Outine

1. Method

2. Scenarios

3. Resultsa) electricity consumption & generationb) gas consumption & supplyc) costsd) CO2 emissions

4. Conclusions

Annual electricityconsumption

Autonomous annualchange in remaining

electricity consumption

Annual consumption of fossilfuels in residential buildings

and road transport

Annual electrification in residential buildings and

road transport

Annual and seasonalgeneration by gas-fired

power plants

Annualnet

imports

Annual electricitygeneration by

renewable techniques(wind and solar)

Annual electricitygeneration by

conventional plants(except gas plants)

Policy objectives wrtelectricity generation in

period to 2050

Policy objectives wrtelectrification in period to

2050

Actual level of electricityconsumption in 2016

Actual composition of electricity generation in

2016

Number of houses and carsby type, energy use andelectrification in 2016

Extra annual electricityconsumption because of

electrification

Annual natural gas consumption

Investments in electrificationin residential buildings and

road transport

Investments in gas-fired power

plants

Seasonal demandand supply of

power from Power-to-Gas

Investments innatural-gas

network

Investments inelectricity network

Electrification scenarios

Impact of electrification on annual• natural-gas

consumption• total system

costs• emissions of CO2

Investments inPower-to-Gas

equipment

Annual emissionsof CO2

Annual change in number of houses and cars

Annual supply of methane through

electrolysis

|



Scenarios

Fossil Fuel Hybrid ElectrificationAnnual degree of electrificationHousing

New 5% 50% 100%Existing stock (x1000) 0 100 200

Houses connected to district heating (x 1000) 1 100 1Transport (% of new cars)

Passenger cars 5% 40% 80%Vans 0% 25% 50%Trucks 0% 5% 10%Buses 0% 25% 50%Motorbikes and scooters 0% 50% 80%Bicycles 35% 35% 35%

Scenarios

|



Assumptions on energy use for period to 2050

Variable Value

Number of houses (x million) 7,6

Number of houses electrified (x million) 0,02

Average size of houses in m2 119

Average gas consumption per house (m3)* 1400

share of gas used for cooking** 5%

share of gas used for hot water** 15%

Share of houses connected to district heating

system 5.5%

CO2 emissions by households in 1990 (Mton) 21

Statistical data for 2016

Sources: CBS, RVO

Variable Value

Annual increase in number of houses 0,5%

Annual number of new houses (x 1000) 50

Energy use for heating a new house (in m3 gas) 1000

Annual increase in efficiency houses 1%

Coefficient of performance (COP) of heat pumps

Space heating 3

Warm water 1

Annual increase in efficiency of heat pumps 1%

Data and assumptions on residential houses

|



Electrification of residential houses, 2016-2050, 2 scenarios

|



Consumption of electricity in houses, for heating, cooking and hot water, in 2050

|



Variable Value

Number of (x million)

passenger cars 8,9

vans 0,84

trucks 0,15

buses 0,01

motorbikes and scooters 1,15

bicycles 22,7

Of which electric (x 1000)

passenger cars 60

vans 0

trucks 0

buses 0,1

motorbikes and scooters 0

bicycles 1500

Average distance per year (km)

passenger cars 13022

vans 18896

trucks 59228

buses 61461

motorbikes and scooters 2000

bicycles 1000

Data and assumptions on road transport

Statistical data for 2016 Variable Value

Passenger cars

Annual number of new cars (x 1000) 400

Performance electric (kWh/100km) 20

Vans

Annual number of new vans (x 1000) 60


Trucks

Annual number of new trucks (x 1000) 10


Buses

Annual number of new buses (x 1000) 0,75


Motorbikes and scooters

Annual number of new M&S (x 1000) 75


Bicycles

Annual number of new bicycles (x 1000) 1000


All vehicles

Annual increase in number 1%

Annual increase in efficiency 1%

Annual increase in average distance per vehicle 0%

Battery charging units

Annual improvement in charging efficiency 0,5%

Assumptions on energy use for period to 2050

|



Electrification of road transport, in 2050 (per scenario)

% of fullelectric cars

|



Consumption of electricity by road transport, in 2050, per scenario

|



Autonomous growth in electricity consumption: 0.6% per year since 2000Assumption for period up to 2050: 0.5% growth per year

|



Consumption of electricity, total Netherlands, autonomous + effect electrification in 2050, per scenario

|



Supply of electricity: assumptions

Variable Assumption Backgroundcoal-fired plants -7% facing out in 2030other fossil fuel plants -11% facing out in 2025nuclear plants -11% facing out in 2025hydro plants 0% remains constantwind (annual increase in TWh) 2.7 policy target in 2030 is 13000 MWwind in period after policy target (increase in TWh) 2.1 annual investments after 2030 600 MWsolar (annual increase in TWh) 1.8 policy target in 2030 is 12000 MWsolar in period after policy target (annual increase in TWh) 1.3 annual investments after 2030 600 MWbiomass 2% gradual increase based on pastother 1% gradual increase based on pastnet import (if negative, this refers to export) 2% increase in cross-border capacity

Capacity factor: wind: 40%, solar: 25%(more than in publication)

|



Supply of electricity, 2016-2050 (aggregated numbers per year)

|



…but what to do with fluctuations in generation and load?

distribution of joint weather circumstances over past 6 years

• hardly wind• hardly sunshine• cold (= high

demand for heat) • working days

(high demand for power)

• a lot of wind• a lot of sunshine• normal

temperature (low demand for heating or cooling)

• weekends (low demand for power)

|



Supply of electricity on extreme days

A lot of wind and sunshine, no heating demand, weekend

Hardly wind and sunshine, high heating demand, working day

Solar, wind and biomassa generate more than needed: storage of power as hydrogen (Power-to-Gas)

Supply of electricity from storage, wind, solar, biomassand import not sufficient to satisfy demand: gas fired power plants are required

|



Storage of power as storage for seasonal flexibility (PtG)

Variable Value (%)

Efficiency electrolyser 75%

Efficiency power plants 42% Resulting efficiency Power-to-Gas 31%

Assumptions on efficiency PtG

|



Gas-generation capacity needed on worse day

|



Consumption of gas in houses and electricity sector

Full electrification scenario All scenarios in 2050

Assumption: gas-fired power plants realise 1% efficiency improvement per year

|



Total consumption of gas in the Nederlands

Assumptions on industry: 1% efficiency improvement per year – no hydrogen or elektrification

|



Supply of gas to the Dutch market, 2016-2050

Variable Value

remaining reserves Groningen gas field (bcm) 663

remaining reserves small fields (bcm) 247

annual net export (bcm) 10

annual production of green gas (bcm) 0.08

production small fields in 2016 (bcm) 26

Variable Value

production cap Groningen gas field (bcm):

- 2017 - 2021 21.6

- 2022 12

2023-2030

gradual decline to 0

bcm in 2030

annual reduction in production small

fields 2%

annual increase in production of green gas 5%

efficiency of electrolysis 75%

efficiency of converting H2 into CH4 80%

Statistical data Assumptions

|



Supply of gas to the Dutch market, 2016-2050

|



Reduction CO2 emissions compared to 1990

Variable Value

CO2 emissions in 1990 (x Mton)

residential buildings 21

road transport

- passenger cars 15,5

- vans 2,2

- trucks 5,0

- buses 0,6

- motors 0,3

electricity sector 52

Variable Fuel

efficiency

Carbon intensity

(lt/100 km) (ton/lt fuel)

passenger cars 6,7 0,0024

vans 10 0,0027

trucks 22 0,0027

buses 29 0,0027

motors 5 0,0024

Statistical data Assumptions

|



Emissions of CO2 by road transport, residential buildings and electricity sector

|



Emissions of CO2 per sector per scenario

|



Reduction CO2 emissions compared to 1990

T+R (2050)

T=TransportR=Residential sectorE=Electricity sector

|



Variable Value

Weighted Average Costs of Capital (WACC) 5%

Discount rate (for NPV calculations) 3%

Depreciation periods (years)

- grid 20

- power plants 20

- houses 40

- cars 10

Investments costs:

- gas-fired power plants (mln euro/MW) 0,75

- electrolyser (mln euro/MW) 0,5

- storage (caverne) 30

Asset value electricity grid (billion euro) 28

Investment costs residential buildings

- heat pump (euro / house) 6000

- renovating house (euro/m2/house) 105

Investments costs road transport

- quick charging stations (per unit) 35000

- ratio charging stations / cars 0,08

- extra costs of electric cars (euro/car) 7500

Gas price (Euro/MWh) 20

annual change in gas price 0%

Price motor fuels (Euro/lt, excl taxes) 0,5

annual change in price motor fuels 0%

shadow price of CO2 (euro/ton) 50

CO2 price in ETS (euro/ton) 10

Assumptions forcalculating costs

|



Costs of electrification, per type of costs

|



Costs: present value of all costs during period to 2050

|



Outcome

model

Variants on Full Electrification Scenario

Baseline Higher

efficiency

More

renewables

Stable

demand

All 3

Extra electricity

demand due to

electrification in

2050 (in % of

2016)

65% 57% 65% 59% 52%

Share of gas

generation in total

generation in

2050

49% 47% 10% 42% 0%

Gas consumption

in electricity and

residential sector

in 2050 (in % of

2016)

87% 79% 17% 64% 0%

Share of synthetic

gas in total gas

supply in 2050

0% 0% 0% 0% 3%

Carbon emissions

in electricity,

residential and

transport in 2050

(in % of 1990)

-41% -46% -80% -66% -100%

Sensitivity analysis

Legenda:

'higher efficiency': annual improvement in the energy efficiency of houses, vehicles and electricity generation is 2 times baseline

'more renewables': annual increase in wind turbines and solar panels is 2 times baseline

'stable demand': no increase in number of houses and cars and autonomous electricity demand remains constant

'all 3': all the above 3 variants combined

Outcome

model

Variants on Full Electrification Scenario

Baseline

Higher efficiency

More renewables

Stable demand

All 3

Extra electricity

demand due to

electrification in

2050 (in % of

2016)

65%

57%

65%

59%

52%

Share of gas

generation in total

generation in

2050

49%

47%

10%

42%

0%

Gas consumption

in electricity and

residential sector

in 2050 (in % of

2016)

87%

79%

17%

64%

0%

Share of synthetic

gas in total gas

supply in 2050

0%

0%

0%

0%

3%

Carbon emissions

in electricity,

residential and

transport in 2050

(in % of 1990)

-41%

-46%

-80%

-66%

-100%

|



Conclusions

• electrification results in much higher demand for electricity

• increasing supply of renewables is not sufficient to meet this demand

• even on windy and sunny days, there will hardly be oversupply

• renewable energy should increase much stronger before we can realise a green hydrogen economy

• hybrid systems are less expensive than full electrification

|



References

CERRE, Gas and elektrification of heating & transport, scenarios for 2050(including studies for Netherlands, Germany, Austria, Belgium and France)

Study on the Netherlands (extract of CERRE report):Moraga en Mulder, Electrification of heating and transport: a scenario analysis of the Netherlands up to 2050, CEER policy papers, 2, May 2018.

http://www.cerre.eu/publications/gas-and-electrification-heating-transport-scenarios-2050https://www.rug.nl/ceer/blog/electrification-report.pdf

Electrification of heating and transport �consequences for gas consumption, emissions and costsOutineSlide Number 3Slide Number 4Slide Number 5Slide Number 6Slide Number 7Slide Number 8Slide Number 9Slide Number 10Slide Number 11Slide Number 12Slide Number 13Slide Number 14Slide Number 15Slide Number 16Slide Number 17Slide Number 18Slide Number 19Slide Number 20Slide Number 21Slide Number 22Slide Number 23Slide Number 24Slide Number 25Slide Number 26Slide Number 27Slide Number 28Slide Number 29Slide Number 30Slide Number 31Slide Number 32

electrification of heating and transport …...electrification of heating and transport consequences...

Documents