the wider socio-economic considerations on changes in the energy system prof. mikael skou andersen...
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The wider socio-economic considerations on changes in the energy system
Prof. Mikael Skou Andersen
NERI, Dept. of Policy Analysis,
University of Aarhus (DK)
NERI, University of Aarhus (DK)
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EH
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Overview
• Politics and economics of energy supply• Ranking of renewable energy in a CBA-
perspective• Some EVA results and implications for
biomass• Bottom-up versus top-down approaches• Vision: linking of energy systems model
with macro-economic perspective
NERI, University of Aarhus (DK)
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The economics of energy supply
NERI, University of Aarhus (DK)
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The politics of energy supply
• Besides oil price other drivers of energy policy– supply stability– broader international security considerations– environmental aspects (modest role)
• Energy policy tightly regulated and subsidised– in EU a prerogative of the member states– large-scale subsidies for nuclear energy– some liberalisation to promote efficiency– not primarily an economic issue
• Considerable vested interests in energy sector
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20-20-20: A new target in energy policy
• EU Council of Ministers, March 2007:– 20 per cent reduction of CO2– 20 per cent renewable energy– in 2020
• Denmark– negotiations on new energy policy stalled in
June 2006; have resumed now– EU requires 30 per cent renewables in DK in
2020, up from 15 per cent
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Energy Agency: Biomass more efficient than wind energy
1% renewables:
Million DKK in NPVdiscount rate 6%; oil 70 $/b
Prod.
Incl. CO2
Extern.
Costs
Market
price adder
Tax distort.
Total
Wind energy land
power
240 -30 40 90 340
Offshore wind
power
430 -30 70 130 610
Biomass (straw)
heat
90 >-10 20 70 170
Biomass (wood chips) heat
130 >-10 20 70 220
Solar heating 170 >-10 30 60 260
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EVA: External costs in DKK- high and low estimates
191
43
127
81
22
55
0
20
40
60
80
100
120
140
160
180
200
Middel-VOLY Median-VOLY
PM2,5
SO2
NOx
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EVA: Fuel mix and scrubber dependencyfor external cost per kWh
2628
26
15
8
3
33
26
47
0
5
10
15
20
25
30
35
40
45
50
FV_kul/gas AV_kul (deNOx) VF_affald
øre/kwh i eksterne omkostninger (uden CO2)
2003 2004 2005
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Amagerværket: a closer look
AV EVA (m_2000) EVA (m_2001) EVA (m_2002) EVAAverage
Ecosense
PM2.5-primary 35,78 46,83 41,38 41,33 34,83
SO4/SO2
SO2/SO2
SO2-total
9,512,00
11,51
10,572,45
13,02
10,292,07
12,36
12,30 11,84
NO3/NOx
O3/NOx
NOx-total
15,03-0,3814,65
18,13-0,3617,77
17,63-0,3317,30
16,58 12,93
PbHg
36,5111,62
42,3413,47
37,3311,89 38,73
12,33 -
Table 3. Amagerværket/CoalCHP: External costs of air pollution emissions in Euro per kilogramme (2004-prices) for three consecutive meteorological years.
NERI, University of Aarhus (DK)
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CBA of wind-energy(NPV with r=3%)
0,6
2,3
4,2
2,8
0,4
2,3
4,3
2,8
2,1
3,1
4,3
3,4
0,0
0,5
1,0
1,5
2,0
2,5
3,0
3,5
4,0
4,5
mio./MW
Havmøller A Havmøller B Land
50$
60$
70$
60$/300
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Bottom-up energy sector modelling vs.top-down macro-economic perspective
• Bottom-up modelling is appropriate from a technical point of view to capture detail of energy system
• In case of non-marginal changes in energy system a need to understand broader macro-economic implications and feed-back on the energy sector itself– e.g. impacts in agricultural and forestry sectors– second-order impacts on economic growth,
employment etc.
NERI, University of Aarhus (DK)
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Model availability for wider analysis of fossil-fuel phase-out
• RAMSES: Bottom-up model of Nordic energy sector of DK Energy Agency
• BALMOREL: Bottom-up model of Nordic-German energ sector
• EMMA: Energy-model as a satelitte model to ADAM; DK-macro-economic model
– general equilibrium model principles
• E3ME: Energy-Economy-Environment model of EU-27 including Denmark with high sector and fuel resolution
– econometric time-series estimated model
NERI, University of Aarhus (DK)
CE
EH
wo
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p,
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TU
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r. 6
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THE END
www.DMU.dk
NERI, University of Aarhus (DK)
CE
EH
wo
rks
ho
p,
Ris
ø-D
TU
, F
eb
r. 6
th 2
008