Addressing climate change impact on the energy system: a technoeconomic and environmental approach to decarbonisation

Background: The provision of energy services is a vital component of the energy system. This is often considered emission-intensive and at same time, highly vulnerable to climate change conditions. This forms the fundamental objective of this thesis, poised to examine technoeconomic and environmental implications of policy intervention, targeted at cushioning impacts of climate change on the energy system. Aims: Four research queries are central to this work: (1) Review literature on impacts of CV&C on the energy system; (2) Estimate influence of seasonal climatic and socioeconomic factors on energy demand in Australia; (3) Model dynamic interactions between energy policies and climate variability and change (CV&C) impacts on the energy system in Australia and exploring the technoeconomic and environmental implications; and (4) Identify least-cost combination of electricity generation technologies and effective emissions reduction policies under climate change conditions in Australia. Methods: A systematic scoping review method was first applied to identify consistent pattern of CV&C impacts on the energy system, while spotting research gaps in studies that met the inclusion criteria. Databases consisting of Scopus and Web of Science were searched, and snowballing references in published studies was adopted. Data was collated and summarised to identify the characteristic features of the studies, consistent pattern of CV&C impacts, and locate research gaps to be filled by this study. The second study applied an autoregressive distributed lag (ARDL) model to estimate temperature sensitive electricity demand in Australia. Estimates were used with projected temperatures from global climate models (GCMs) to simulate future electricity demand under climate change scenarios. The study further accounted for uncertainties in electricity demand forecasting under climate change conditions, in relation to energy efficiency improvement, renewable energy adoption and electricity price volatility. The estimates from the ARDL model and projections from GCMs were used for energy system simulation using the Long-range Energy Alternative and Planning (LEAP) system. It considered climate induced energy demand in the residential and commercial sector, alongside linking the non-climate sensitive sector with energy supply sector. This model was vital to justifying policy options under investigation. Further, LEAP modelling analysis was extended by identifying effective emission reduction policies considering CV&C impacts. Here, the Open Source Energy Modelling System (OSeMOSYS) was used for optimisation analysis to identify least-cost combination of electricity generation technologies and GHG emission reduction policies. Whereas, in the third and final study, cost-benefit analysis and estimation of long run marginal cost of electricity were conducted, while decomposition analysis of GHGs were analysed in the third study alone. Data used in the ARDL model included socioeconomic data which includes gross state product, as well as population and electricity prices from 1990-2016. The LEAP and OSeMOSYS model as used, was dated to 2014 as the base year, while several technological (power plant characteristics, household technologies), economic (energy prices, economic growth, carbon price) and environmental (emission factors, emission reduction target) variables were used to develop Australia's energy model. Results: The literature search generated 5,062 articles in which 176 studies met the inclusion criteria for the final literature review. Australian studies were scarce compared to other developed countries. Also, just few articles made attempt to examine decarbonisation under climate change. The ARDL model estimates and GCMs simulation of future electricity demand under CV&C show that Australia had an upward sloping climate-response functions, resulting to an increase in electricity demand. However, the researcher identified an annual increase in projected electricity demand for states and territory in Australia, which calls for the need to scale up RET. The LEAP model results showed substantial impacts on energy demand, as well as impacts on power sector efficiency. Under the BAU scenario, CV&C will result in an increase in energy demand by 72 PJ and 150 PJ in the residential and commercial sectors, respectively. Induced temperature enlarges the non-climate BAU demand, which will increase threefold before 2050. Under the non-climate BAU, there is an expansion of installed capacity to 81.8 GW generating 524.6 TWh. Due to CV&C impacts, power output declines by 59 TWh and 157 TWh in Representative Concentration Pathways (RCP) 4.5 and 8.5 climate scenarios. This leads to an increase in generation costs by 10% from the base year, but a decrease in sales revenue by 8% and 21% in RCP 4.5 and RCP 8.5, respectively. The LEAP-OSeMOSYS model suggests renewables and battery storage systems as least-cost option. However, the configuration varied across Australia. Carbon tax policy was observed to be effective in reducing Australia's emission and foster huge economic benefits when compared to the current emission reduction target policy in the country. Also, renewable energy technologies increase electricity sales and decrease fuel cost better than fossil fuel dominated scenarios. Conclusions: Data from this study reveals that seasonal electricity demand in Australia will be influenced by warmer temperatures. Also, the study identified the possibility of winter peaking which is somewhat higher than summer peak demand in some states located in the southern regions of Australia. However, winter peaking is projected to decline by mid-century across the RCPs, while summer peak load is projected to increase, thereby, causing power companies to expand their generation capacity which may become underutilised. Owing to increase in cooling requirements up to 2050, policy uncertainties analysis recommend renewables to match an increasing future electricity demand. The energy model indicates that ignoring the influence of CV&C may result in severe economic implications which range from increased demand, higher fuel cost, loss in revenue from decreased power output, as well as increased environmental externalities. The study concludes that policy options to reduce energy demand and GHG emissions under climate change may be expensive on the short-run, though, may likely secure long-run benefits in cost savings and emission reductions. It is envisaged that this could provide power sector management with initiatives that could be used to overcome cost ineffectiveness of short-term cost. The modelling results makes a case for renewable energy in Australia as lower demand for energy and increased electricity generation from renewable energy source presents a win-win case for Australia

Simulating the deep decarbonisation of residential heating for limiting global warming to 1.5C

Whole-economy scenarios for limiting global warming to 1.5C suggest that direct carbon emissions in the buildings sector should decrease to almost zero by 2050, but leave unanswered the question how this could be achieved by real-world policies. We take a modelling-based approach for simulating which policy measures could induce an almost-complete decarbonisation of residential heating, the by far largest source of direct emissions in residential buildings. Under which assumptions is it possible, and how long would it take? Policy effectiveness highly depends on behavioural decision- making by households, especially in a context of deep decarbonisation and rapid transformation. We therefore use the non-equilibrium bottom-up model FTT:Heat to simulate policies for a transition towards low-carbon heating in a context of inertia and bounded rationality, focusing on the uptake of heating technologies. Results indicate that the near-zero decarbonisation is achievable by 2050, but requires substantial policy efforts. Policy mixes are projected to be more effective and robust for driving the market of efficient low-carbon technologies, compared to the reliance on a carbon tax as the only policy instrument. In combination with subsidies for renewables, near-complete decarbonisation could be achieved with a residential carbon tax of 50-200Euro/tCO2. The policy-induced technology transition would increase average heating costs faced by households initially, but could also lead to cost reductions in most world regions in the medium term. Model projections illustrate the uncertainty that is attached to household behaviour for prematurely replacing heating systems

A Critical Review on the Use of Shallow Geothermal Energy Systems for Heating and Cooling Purposes

The reduction of CO2 emissions has become a global concern. In this regard, the EU intends to cut CO2 emissions by 55% by 2030 compared to those of 1990. The utilization of shallow geothermal energy (SGE) in EU countries is considered the most effective measure for decarbonizing heating and cooling. SGE systems utilize heat energy collected from the earth’s crust to provide secure, clean, and ubiquitous energy. This paper provides a literature review on the use of SGE for heating and cooling purposes. The latest advances in materials, new innovative structures, and techno-economic optimization approaches have been discussed in detail. Shallow geothermal energy’s potential is first introduced, and the innovative borehole structures to improve performance and reduce installation cost is outlined. This is followed by an extensive survey of different types of conventional and thermally enhanced collectors and grouts. Attention is mainly given to the techno-economic analysis and optimization approaches. In published case studies, the least economic break-even point against fossil fuel-based heating systems occurs within 2.5 to 17 years, depending on the local geological conditions, installation efficiency, energy prices, and subsidy. Ground source heat pumps’ cost-effectiveness could be improved through market maturity, increased efficiency, cheap electricity, and good subsidy programs.publishedVersio

Exploring the future low-carbon electricity system: impacts of nuclear power and demand patterns

To achieve the climate goals set by the Paris Agreement, the global electricity system is expected to transition towards a low-carbon electricity system. The future low-carbon electricity system is uncertain regarding both generation and demand. First, the cost of variable renewable energy (VRE) technologies, such as wind and solar, has been decreasing over the past decade and the share of\ua0 VRE in the electricity system is increasing. This trend is likely to continue for the foreseeable future. However, there is no consensus as to whether the goal of deep decarbonization of the electricity system can be accomplished without large cost escalation if nuclear power and fossil fuel plus carbon capture and storage (CCS) are excluded. Second, the future electricity demand is highly uncertain due to economic growth, e-mobility, electric heating, electric cooling, etc. These factors affect not only the volume of annual electricity demand, but also the inter-temporal electricity demand pattern. The change in demand pattern may affect a low-carbon electricity system with a high penetration level of wind and solar, as such a system is less capable of load following, as compared with the conventional electricity system based on dispatchable thermal power plants.This thesis investigates the impacts of nuclear power and demand patterns on the future low-carbon electricity system, and addresses the following research questions: What is the cost of a future low-carbon electricity system without nuclear power for Sweden?; and How will the electricity demand pattern affect the electricity system cost and the electricity supply mix? A greenfield techno-economic cost optimization model with a high temporal resolution for the electricity system is developed and used to answer these questions.The results of this work reveal that including nuclear power in the electricity system reduces the nodal net average system cost by 4% for Sweden. This implies that the economic rationale for Sweden as a country to invest in nuclear power is limited if there is a transition towards a low-carbon electricity system in Europe. In addition, we find that varied electricity demand patterns (seasonal and diurnal variations) affect only slightly the electricity system cost, except for the case of summer peak, where the system cost may increase by up to 8%. The demand pattern may have a stronger impact on the electricity supply mix, especially solar and storage capacities, than on the electricity system cost. This thesis contributes to a better understanding of the potential future low-carbon electricity system. The results are beneficial in identifying the implications for the planning of the future electricity system, policy support for low-carbon technologies, and demand profile treatment for modeling studies

From Sweden to the world: Analysis of future low-carbon electricity systems

The increasing urgency of addressing climate change, along with the sustained cost declines in wind and solar power, has led to a rapid expansion in their deployment to decarbonize the electricity sector. In cost-optimal scenarios for future low-carbon electricity systems, wind and solar often serve as the cornerstone of electricity supply. Although many studies have investigated a future low-carbon electricity system based on wind and solar, there are still several important aspects that are not well understood for such a future system, e.g., uncertainty in future electricity demand patterns, potential for trade in renewable energy, the spatial scope for resource sharing and the role of nuclear power. This thesis investigates these aspects and their potential impacts on developing a low-carbon electricity system.\ua0\ua0\ua0\ua0\ua0 This thesis reveals that varied electricity demand patterns affect only slightly the electricity system cost for Europe, except for the case of summer peak, where the system cost may increase by up to 8%. The change in demand pattern is generally more consequential to the electricity supply mix than the system cost. Notably, the increased electric cooling demand may change the demand pattern such that the hourly electricity demand is better correlated with the output of solar PV. Through analyzing seven different regions under various CO2 emission targets, this thesis shows that solar PV is the most cost-optimal generation technology for meeting the cooling demand. In addition, to have a more realistic assessment of renewable energy potential, this thesis introduces a new metric “Renewable levelized cost of electricity available for export”, which incorporates heterogeneous discount rates, electricity demand, and land-use requirements. By applying this metric to most of the countries in the world, this thesis shows that countries with significant potential for renewable energy export include the US, China, and Saudi Arabia. Furthermore, this thesis shows that the benefit of an intercontinental super grid, as suggested by the One Sun One World One Grid initiative, is rather limited. Allowing for long-distance intercontinental electricity trade reduces the electricity system cost by 0-5% compared to the case where the continents are isolated from each other. This thesis also shows that integrating different continents always reduces the integration of solar PV, which indicates that an intercontinental super grid is not a cost-effective variation management strategy for solar power. Finally, this thesis shows that including nuclear power in the electricity system reduces the nodal net average system cost by 4% for Sweden. This implies that the economic rationale for Sweden as a country to invest in nuclear power is limited if there is a transition towards a low-carbon electricity system in Europe. This thesis provides practical information about demand profile treatment for modeling practice, introduces a useful metric for renewable energy trade potential assessment, and generates valuable insights about deploying solar PV to power cooling, and investment in super grid and nuclear power

Early decarbonisation of the European energy system pays off

For a given carbon budget over several decades, different transformation rates for the energy system yield starkly different results. Here we consider a budget of 33 GtCO2 for the cumulative carbon dioxide emissions from the European electricity, heating, and transport sectors between 2020 and 2050, which represents Europe's contribution to the Paris Agreement. We have found that following an early and steady path in which emissions are strongly reduced in the first decade is more cost-effective than following a late and rapid path in which low initial reduction targets quickly deplete the carbon budget and require a sharp reduction later. We show that solar photovoltaic, onshore and offshore wind can become the cornerstone of a fully decarbonised energy system and that installation rates similar to historical maxima are required to achieve timely decarbonisation. Key to those results is a proper representation of existing balancing strategies through an open, hourly-resolved, networked model of the sector-coupled European energy system.Comment: 10 pages, 8 figure