CAN GREEN POWER LEAD TO GREEN GROWTH? A STUDY FOR PORTUGAL
15th IAEE European Conference 20173rd to 6th September, Vienna
Patrícia Fortes, Sara Proença, Sofia Simões, Júlia Seixas
CO2ENERGY &
CLIMATE
New Technologies & Low Carbon Practices
Climate Mitigation/ Adaptation
Consumers Profiles &
Energy Efficiency
Policy Support
Energy Transitions
Integrative Energy City
Planning
CONTEXT
› A shift to a low-carbon energy system, particularly the decarbonization of the power sector, has been identified as a key strategy to mitigate climate change.
› Renewables will play a major role in power sector decarbonization.
[2]
Source: ETP (IEA), 2016
CONTEXT
RES-Electricity share (%)
2015 2050
47.5%
68.0%
89.7%
87.7%79.7%
EU RES-E: 28.2% EU RES-E: 54.8%
EU REFERENCE SCENARIO
[3]
0
10
20
30
40
50
60
2000 2010 2020 2030 2040 2050
RES
-E (
%)
EU28
CONTEXT
› Besides reducing GHG emissions, renewable electricity can have other benefits:
› Increase energy security
› Improve air quality,
› Create new jobs
› Promote economic growth
› Some authors are more cautious about RES positive impacts:
› High upfront investments
› Substitute conventional power sector employment
› The magnitude of the impact of RES-E on the economy will depend on each country's economicstructure, the prices and availability of fossil fuels and renewables technologies, and on whether thenew renewable power technologies and the required services are imported or produceddomestically.
[4]
RES BENEFITS
OBJECTIVE
i. Evaluate the net economic effects of RES-Eexpansion in Portugal up to 2050,considering different RES-E technologyportfolios;
ii. Analyse how different visions for renewablesequipment manufacturing, i.e., importsversus domestic production, would affect thePortuguese economy
[5]
METHODOLOGY
› GEM-E3_PT
› CGE model for the Portuguese economy
› Recursive dynamic model
› Sectoral disaggregation 17 production sectors + power T&D + 13 power technologies
› Calculate the economic impacts
[6]
MODELS
GEM-E3_PT TIMES_PT
Demand Generator
Common scenario assumptions- Energy import prices (4D scen. ETP2016)- No electricity imports/exports- Techno/economic data of power technologies
Economic drivers (e.g., GDP) Energy services demand
› TIMES_PT
› Optimization energy system model
› Technology database → e.g., +40 dedicated power technologies
› Considers electricity peak and base loads and renewables’ seasonal and daily variability
Power sector profile
Capital 27% 8% 87% 72% 78%
Labour 9% 1% 10% 6% 12%
MaterialsElectric and other equip. goods 4% 1% 1% 14% 1%
Construction 2% 3% 2% 8% 9%
Fuel 58% 87% --- --- ---
METHODOLOGY
› Power production is disaggregated in technologies based on LCOE (=TIMES) and base year (2005) production
POWER SECTOR DETAIL IN GEM-E3_PT
13 technologies: 1. Coal2. Natural gas 3. Oil4. Biomass 5. Hydro6. Onshore wind7. Offshore wind 8. Solar PV 9. Solar CSP10. Geothermal11. Wave12. Coal CCS 13. Natural gas CCS
+ electricity T&D
Calibration of base year 2005 Coal Natural gas Hydro Onshore wind PV
€/MWh 35.36 113.71 48.58 95.31 568.07
GWh 14 652 13 093 4 465 1 759 3
Production (€) 518.10 1 488.82 216.93 167.69 1.71
O&M costs
[7]
METHODOLOGY INVESTMENT MATRIX
EXAMPLE: CSP Parabolic Trough System Project Data
Construction Costs% Capital
CostGEM-E3_PT
Economic sectorMaterials
Construction (concrete rebar, equip, roads and site prep) 3% 13Labor
Sitework and Infrastructure 1% 13Field Erection 9% 13Support Structures 1% 13Piping 3% 6Electrical 1% 9
Equipment CostsMirrors 6% 8Heat Collection Elements 18% 9Thermal Energy Storage Tanks 5% 6Heat Exchangers 4% 9Heat Transfer System Equipment 3% 9Heat Transfer and Storage Fluids 11% 6Steam Turbines & Generators 8% 9Misc. Electrical and Solar Equipment (pumps, motors, drive) 0% 9Water Treatment 0% 18
Other CostsFreight & Transportation 0% 14Engineering & Project Management 10% 17Misc. Costs (permitting, licensing, legal) 2% 17
19 20 21 22 23 24 25 26 27 28 29 30 31
Coal Oil Gas Bio Hydro WinOn Solar PV WinOff Wave Geo Coal CCS Gas CCS CSP
01
02 3.4% 8.9% 8.9% 3.4% 8.9%
03 3.4% 8.9% 8.9% 1.8% 3.4% 8.9%
04 3.4% 8.9% 8.9% 3.4% 8.9%
05 3.4% 8.9% 8.9% 2.7% 3.5% 3.1% 4.6% 3.4% 8.9%
06 21.9% 19.7% 17.1%
07
08
09 30.6% 18.3% 18.3% 56.0% 19.8% 45.6% 50.2% 36.0% 81.8% 33.8% 30.6% 18.3% 51.0%
10 3.7% 3.5%
11 3.8% 10.7% 5.9%
12 9.3%
13 31.3% 36.1% 36.1% 14.0% 46.3% 14.7% 9.1% 25.9% 8.9% 28.7% 31.3% 36.1% 13.0%
14 7.9%
15 4.5%
16 1.2% 0.6% 0.6% 1.2% 0.6%
17 23.2% 2.4% 2.4% 20.0% 20.9% 2.2% 27.8% 10.3% 20.1% 23.2% 2.4% 12.8%
18 7.1% 7.1% 10.0% 10.3% 0.3% 0.5% 4.6% 1.5% 7.1% 0.2%
Total 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%
19 20 21 22 23 24 25 26 27 28 29 30 31
Coal Oil Gas Bio Hydro WinOn Solar PV WinOff Wave Geo Coal CCS Gas CCS CSP
01
02 3.4% 8.9% 8.9% 3.4% 8.9%
03 3.4% 8.9% 8.9% 1.8% 3.4% 8.9%
04 3.4% 8.9% 8.9% 3.4% 8.9%
05 3.4% 8.9% 8.9% 2.7% 3.5% 3.1% 4.6% 3.4% 8.9%
06 21.9% 19.7% 17.1%
07
08
09 30.6% 18.3% 18.3% 56.0% 19.8% 45.6% 50.2% 36.0% 81.8% 33.8% 30.6% 18.3% 51.0%
10 3.7% 3.5%
11 3.8% 10.7% 5.9%
12 9.3%
13 31.3% 36.1% 36.1% 14.0% 46.3% 14.7% 9.1% 25.9% 8.9% 28.7% 31.3% 36.1% 13.0%
14 7.9%
15 4.5%
16 1.2% 0.6% 0.6% 1.2% 0.6%
17 23.2% 2.4% 2.4% 20.0% 20.9% 2.2% 27.8% 10.3% 20.1% 23.2% 2.4% 12.8%
18 7.1% 7.1% 10.0% 10.3% 0.3% 0.5% 4.6% 1.5% 7.1% 0.2%
Total 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%
Construction
Ferrous and non ferrous metals
Electric and Other equipment goods
Shares of Investment matrix
Source: NREL - The Jobs and Economic Development Impact (JEDI) models(http://www.nrel.gov/analysis/jedi/)
Market Services
[8]
0%
20%
40%
60%
80%
100%
2015 2020 2025 2030 2035 2040 2045 2050
0%
20%
40%
60%
80%
100%
2015 2020 2025 2030 2035 2040 2045 2050
SCENARIOS
› Imposing to GEM-E3 exogenous power generation profiles from TIMES + PRIMES reference scenario
RES share
RES share
2015_BAU TIMES_REF
HIGH_RES PRIMES
0%
20%
40%
60%
80%
100%
2015 2020 2025 2030 2035 2040 2045 2050
RES share
RES share
0%
20%
40%
60%
80%
100%
2015 2020 2025 2030 2035 2040 2045 2050
RES share
POWER SECTOR PROFILE
[9]
49%
95%
69%
97%
83%
97%86%
SCENARIOS
ELASTICITIES OF
SUBSTITUTION AMONG
IMPORTS AND
DOMESTIC
PRODUCTION*
POWER
SECTOR
PROFILE
*Electric and Other equipment goods - One of the main economic sectors associated with RES technologies
2015_BAU
TIMES_REF
HIGH_RES
PRIMES
Equal to 2015 with the normalization of hydro to average hydrologic conditions.
Estimated by the TIMES_PT: cost-effective results under no CO2 constraint
Estimated by TIMES_PT with higher share of RES and emergent technologies
Estimated by PRIMES for Portugal under the EU Reference Scenario 2016
BASE
HIGH
LOW
Value: 1.5
Value: 3
Value: 0.001
[10]
› Higher RES-E lead to lower electricity price with an increase of private consumption and GDP – The exception is when it is assumed more expensive RES-E technologies (CSP, offshore wind) and CCS
› The reduction of fossil fuels imports is partly offset by the increase of other sectors (e.g., electric goods, ferrous and non ferrous metals, other market services)
› No significant impacts on total employment [11]
[% Difference from 2015_BAU]
BASE ELASTICITIES
2030 2050
TIMES_REF HIGH_RES PRIMES TIMES_REF HIGH_RES PRIMES
% RES-E (BAU=49%) 69% 83% 86% 95% 97% 97%
Elec. price -6.3% -5.9% -1.4% -1.6% 2.7% -0.5%
Electricity Demand/Production 2.9% 2.8% 0.7% 1.0% -1.7% 0.3%
GDP 0.4% 0.4% 0.1% 0.4% -0.2% 0.1%
Private Consumption 0.4% 0.4% 0.0% 0.3% -0.5% 0.0%
Net imports -0.5% -0.6% -0.3% -0.2% -0.8% -0.3%
Employment 0.1% 0.1% 0.0% 0.0% -0.1% 0.0%
RESULTS
RESULTS
› Higher RES-E can lead to a significant increase of employment in power sector particularly in electricity generation
› The increase of power sector employment is away above the increase of electricity demand/production
[12]
2030 2050
TIMES_REF HIGH_RES PRIMES TIMES_REF HIGH_RES PRIMES
% RES-E (BAU=49%) 69% 83% 86% 95% 97% 97%
ElectricityDemand/Production
2.9% 2.8% 0.7% 1.0% -1.7% 0.3%
Electricity employment (without power T&D)
9.4% (21.5%)
14.4% (36.0%)
13.3%(36.7%)
17.4%(47.7%)
6.4%(21.5%)
16.7% (47.3%)
BASE ELASTICITIES
RESULTS
[13]
-1 000,000 - 500,000 0,000 500,000 1 000,000 1 500,000 2 000,000
Coal
Oil
Gas
Bio
Hydro
Wind Onshore
Solar PV
Wind Offshore
Wave
Geothermal
Coal CCS
Total Employment
Employment (number of jobs)
TIMES_REF
HIGH_RES
PRIMES
BASE ELASTICITIES
2050
RESULTS
[14]
2030 2050
HIGH_ELAS LOW_ELAS HIGH_ELAS LOW_ELAS
% electric goods from national production
Base = 52% Base = 42%
42% 62% 24% 63%
Electricity price -1.3% 1.4% -1.7%/-1.8% 2.2%/2.3%
Electricity demand -0.1% 0.1% 0.1% -0.1%
GDP -0.1% 0.2% -0.3% 0.5%
Private Consumption -0.4% 0.4% -0.2% 0.3%
Employment --- --- --- ---
Electricity employment -0.1% 0.1% 0.1% -0.1%
[% Difference from Base_Elas]
› All the power sector scenarios are affected equally by the elasticities changes
› Higher domestic production lead to small positive impacts on GDP growth
› Electricity demand and associated employment is a result of the balance between electricity price and GDP
FINAL REMARKS
› Increasing RES-E from around 50% to a cost-effective share of around 95% by 2050 have limited positive impacts on the Portuguese economy
› High RES-E share with emergent technologies e.g., CSP, offshore wind can in fact lead to negative economic impacts
› Higher domestic production of “electric and other equipment goods” (one of the sectors associated with technologies) have also limit positive impacts and but not reflect different power profiles
› No impacts on the total national employment – lower representation of power sector employment in the whole economy, but significant positive impacts of RES-E in electricity employment
[15]
› Find more accurate data regarding the number of jobs per technology in Portugal;
› Define a more accurate methodology to test the relevance of imported versus domestic manufacturing of renewables equipment – test the relevance of national clusters
› Model the scenarios with CO2 price and higher electricity demand (future decarbonization scenarios lead to electrification)
Furt
he
r W
ork
Thank you!
Patrícia Fortes [email protected]
[16]
Thanks to FCT for the Post-doctoral research fellowship of Patrícia Fortes (SFRH/BPD/ 100724/2014).
CO2ENERGY &
CLIMATE
New Technologies & Low Carbon Practices
Climate Mitigation/ Adaptation
Consumers Profiles &
Energy Efficiency
Policy Support
Energy Transitions
Integrative Energy City
Planning
