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Contrary to "static" pathways that are defined once for all, this article deals with the need for policy makers to adopt a dynamic adaptive policy pathway for managing decarbonization over the period of implementation. When choosing a pathway as the most desirable option, it is important to keep in mind that each decarbonization option relies on the implementation of specific policies and instruments. Given structural, effectiveness, and timing uncertainties specific to each policy option, they may fail in delivering the expected outcomes in time. The possibility of diverging from an initial decarbonization trajectory to another one without incurring excessive costs should therefore be a strategic element in the design of an appropriate decarbonization strategy. The article relies on initial experiences in France and Germany on decarbonization planning and implementation to define elements for managing dynamic adjustment issues. Such an adaptive pathway strategy should combine long-lived incentives, like a pre-announced escalating carbon price, to form consistent expectations, as well as adaptive policies to improve overall robustness and resilience. We sketch key elements of a monitoring process based on an ex ante definition of leading indicators that should be assessed regularly and combined with signposts and trigger values at the subsector level.
Decarbonisation of energy systems requires deep structural change. The purpose of this research was to analyse the rates of change taking place in the energy systems of the European Union (EU), in the light of the EU's climate change mitigation objectives. Trends on indicators such as energy intensity and carbon intensity of energy were compared with decadal benchmarks derived from deep decarbonisation scenarios for the electricity, residential, transport, and industry sectors. The methodology applied provides a useful and informative approach to tracking decarbonisation of energy systems. The results show that the EU has made significant progress in decarbonising its energy systems. On a number of indicators assessed the results show that a significant acceleration from historical levels is required in order to reach the rates of change seen on the future benchmarks for deep decarbonisation. The methodology applied provides an example of how the research community and international organisations could complement the transparency mechanism developed by the Paris Agreement on climate change, to improve understanding of progress toward low-carbon energy systems.
Various electricity generation technologies using different primary energy sources are available. Many published studies compare the costs of these technologies. However, most of those studies only consider plant-level costs and do not fully take into account additional costs that societies may face in using these technologies. This article reviews the literature on the costs of electricity generation technologies, aiming to determine which types of costs are relevant from a societal point of view when comparing generation technologies. The paper categorises the relevant types of costs, differentiating between plant-level, system and external costs as the main categories. It discusses the relevance of each type of cost for each generation technology. The findings suggest that several low-carbon electricity generation technologies exhibit lower social costs per kWh than the currently dominant technologies using fossil fuels. More generally, the findings emphasise the importance of taking not only plant-level costs, but also system and external costs, into account when comparing electricity generation technologies from a societal point of view. The article intends to inform both policymakers and energy system modellers, the latter who may strive to include all relevant types of costs in their models.
To combat climate change, it is anticipated that in the coming years countries around the world will adopt more stringent policies to reduce greenhouse gas emissions and increase the use of clean energy sources. These policies will also affect the industry sector, which means that industrial production is likely to progressively shift from CO2-emitting fossil fuel sources to renewable energy sources. As a result, a region's renewable energy resources could become an increasingly important factor in determining where energy-intensive industries locate their production. We refer to this pull factor as the "renewables pull" effect. Renewables pull could lead to the relocation of some industrial production as a consequence of regional differences in the marginal cost of renewable energy sources. In this paper, we introduce the concept of renewables pull and explain why its importance is likely to increase in the future. Using the examples of direct reduced iron (DRI) and ammonia production, we find that the future costs of climate-neutral production of certain products is likely to vary considerably between regions with different renewable energy resources. However, we also identify the fact that many other factors in addition to energy costs determine the decisions that companies make in term of location, leaving room for further research to better understand the future relevance of renewables pull.
The experience curve theory assumes that technology costs decline as experience of a technology is gained through production and use. This article reviews the literature on the experience curve theory and its empirical evidence in the field of electricity generation technologies. Differences in the characteristics of experience curves found in the literature are systematically presented and the limitations of the experience curve theory, as well as its use in energy models, are discussed. The article finds that for some electricity generation technologies, especially small-scale modular technologies, there has been a remarkably strong (negative) relationship between experience and cost for several decades. Conversely, for other technologies, especially large-scale and highly complex technologies, the experience curve does not appear to be a useful tool for explaining cost changes over time. The literature review suggests that when analysing past cost developments and projecting future cost developments, researchers should be aware that factors other than experience may have significant influence. It may be worthwhile trying to incorporate some of these additional factors into energy system models, although considerable uncertainties remain in quantifying the relevance of some of these factors.
In recent years, a number of energy scenario studies which aim to advise policy makers on appropriate energy policy measures have been developed. These studies highlight changes required to achieve a future energy system that is in line with public policy goals such as reduced greenhouse gas emissions and an affordable energy supply. We argue that behavioural changes towards energy-sufficient lifestyles have considerable potential to contribute to public policy goals and may even be indispensable for achieving some of these goals. This potential should, therefore, be reflected in scenario studies aiming to provide comprehensive advice to policy makers. We analyse the role that energy-sufficient lifestyles play in prominent recent global energy scenario studies and find that these studies largely ignore the potential of possible behavioural changes towards energy-sufficient lifestyles. We also describe how such changes have been considered in several other scenario studies, in order to derive recommendations for the future development of global energy scenarios. We conclude that the inclusion of lifestyle changes in energy scenarios is both possible and useful. Based on our findings, we present some general advice for energy scenario developers on how to better integrate sufficiency into future energy scenario studies in a quantitative manner.
In this paper a new method for the evaluation and comparison of potential future electricity systems is presented. The German electricity system in the year 2050 is used as an example. Based on a comprehensive scenario analysis defining a corridor for possible shares of fluctuating renewable energy sources (FRES) residual loads are calculated in a unified manner. The share of electricity from PV and wind power plants in Germany in the year 2050 is in a range of 42-122% and the load demand has a bandwidth of around 460-750 TWh. The residual loads are input for an algorithm that defines a supplementary mix of technologies providing flexibility to the system. The overall system layout guarantees the balance of generation and demand at all times. Due to the fact that the same method for residual load calculation and mixture of technologies is applied for all scenarios, a good comparability is guaranteed and we are able to identify key characteristics for future developments. The unique feature of the new algorithms presented here is the very fast calculation for a year-long simulation with hourly or shorter time steps taking into account the state of charge or availability of all storage and flexibility technologies. This allows an analysis of many different scenarios on a macro-economic level, variation of input parameters can easily be done, and extensive sensitivity analysis is possible. Furthermore different shares of FRES, CO2-emission targets, interest rates or social acceptance of certain technologies can be included. The capabilities of the method are demonstrated by an analysis of potential German power system layouts with a base scenario of 90% CO2-reduction target compared to 1990 and by the identification of different options for a power sector with a high degree of decarbonisation. The approach also aims at a very high level of transparency both regarding the algorithms and regarding the input parameters of the different technologies taken into account. Therefore this paper also gives a comprehensive and complete overview on the technology parameters used. The forecast on all technologies for the year 2050 regarding technical and economic parameters was made in a comprehensive consultation process with more than 100 experts representing academia and industry working on all different technologies. An extensive analysis of options for the design of potential German energy supply systems in 2050 based on the presented methodology will be published in a follow-up paper.
The Port of Rotterdam is an important industrial cluster, comprising mainly oil refining, chemical production and power generation. In 2016, the port's industry accounted for 19% of the Netherlands' total CO2 emissions. The Port of Rotterdam Authority is aware that the cluster is heavily exposed to future decarbonisation policies, as most of its activities focus on trading, handling, converting and using fossil fuels. Based on a study for the Port Authority using a mixture of qualitative and quantitative methods, our article explores three pathways whereby the port's industry can maintain its strong position while significantly reducing its CO2 emissions and related risks by 2050. The pathways differ in terms of the EU's assumed climate change mitigation ambitions and the key technological choices made by the cluster's companies. The focus of the paper is on identifying key risks associated with each scenario and ways in which these could be mitigated.
The Paris Agreement calls on all nations to pursue efforts to contribute to limiting the global temperature increase to 1.5 °C above pre-industrial levels. However, due to limited global, regional and country-specific analysis of highly ambitious GHG mitigation pathways, there is currently a lack of knowledge about the transformational changes needed in the coming decades to reach this target. Through a meta-analysis of mitigation scenarios for Germany, this article aims to contribute to an improved understanding of the changes needed in the energy system of an industrialized country. Differentiation among six key long-term energy system decarbonization strategies is suggested, and an analysis is presented of how these strategies will be pursued until 2050 in selected technologically detailed energy scenarios for Germany. The findings show, that certain strategies, including the widespread use of electricity-derived synthetic fuels in end-use sectors as well as behavioral changes, are typically applied to a greater extent in mitigation scenarios aiming at high GHG emission reductions compared to more moderate mitigation scenarios. The analysis also highlights that the pace of historical changes observed in Germany between 2000 and 2015 is clearly insufficient to adequately contribute to not only the 1.5 °C target, but also the 2 °C long-term global target.
We conduct a systematic, interdisciplinary review of empirical literature assessing evidence on induced innovation in energy and related technologies. We explore links between demand-drivers (both market-wide and targeted); indicators of innovation (principally, patents); and outcomes (cost reduction, efficiency, and multi-sector/macro consequences). We build on existing reviews in different fields and assess over 200 papers containing original data analysis. Papers linking drivers to patents, and indicators of cumulative capacity to cost reductions (experience curves), dominate the literature. The former does not directly link patents to outcomes; the latter does not directly test for the causal impact of on cost reductions). Diverse other literatures provide additional evidence concerning the links between deployment, innovation activities, and outcomes. We derive three main conclusions. (1) Demand-pull forces enhance patenting; econometric studies find positive impacts in industry, electricity and transport sectors in all but a few specific cases. This applies to all drivers - general energy prices, carbon prices, and targeted interventions that build markets. (2) Technology costs decline with cumulative investment for almost every technology studied across all time periods, when controlled for other factors. Numerous lines of evidence point to dominant causality from at-scale deployment (prior to self-sustaining diffusion) to cost reduction in this relationship. (3) Overall Innovation is cumulative, multi-faceted, and self-reinforcing in its direction (path-dependent). We conclude with brief observations on implications for modeling and policy. In interpreting these results, we suggest distinguishing the economics of active deployment, from more passive diffusion processes, and draw the following implications. There is a role for policy diversity and experimentation, with evaluation of potential gains from innovation in the broadest sense. Consequently, endogenising innovation in large-scale models is important for deriving policy-relevant conclusions. Finally, seeking to relate quantitative economic evaluation to the qualitative socio-technical transitions literatures could be a fruitful area for future research.