Future capacity growth of energy technologies: are scenarios consistent with historical evidence?

Future scenarios of the energy system under greenhouse gas emission constraints depict dramatic growth in a range of energy technologies. Technological growth dynamics observed historically provide a useful comparator for these future trajectories. We find that historical time series data reveal a consistent relationship between how much a technology’s cumulative installed capacity grows, and how long this growth takes. This relationship between extent (how much) and duration (for how long) is consistent across both energy supply and end-use technologies, and both established and emerging technologies. We then develop and test an approach for using this historical relationship to assess technological trajectories in future scenarios. Our approach for “learning from the past” contributes to the assessment and verification of integrated assessment and energy-economic models used to generate quantitative scenarios. Using data on power generation technologies from two such models, we also find a consistent extent - duration relationship across both technologies and scenarios. This relationship describes future low carbon technological growth in the power sector which appears to be conservative relative to what has been evidenced historically. Specifically, future extents of capacity growth are comparatively low given the lengthy time duration of that growth. We treat this finding with caution due to the low number of data points. Yet it remains counter-intuitive given the extremely rapid growth rates of certain low carbon technologies under stringent emission constraints. We explore possible reasons for the apparent scenario conservatism, and find parametric or structural conservatism in the underlying models to be one possible explanation

Risk Hedging Strategies under Energy System and Climate Policy Uncertainties

The future development of the energy sector is rife with uncertainties. They concern virtually the entire energy chain, from resource extraction to conversion technologies, energy demand, and the stringency of future environmental policies. Investment decisions today need thus not only to be cost-effective from the present perspective, but have to take into account also the imputed future risks of above uncertainties. This paper introduces a newly developed modeling decision framework with endogenous representation of above uncertainties. We employ stochastic modeling techniques within a system engineering model of the global energy system and implement several alternative representations of risk. We aim to identify salient characteristics of least-cost risk hedging strategies that are adapted to considerably reduce future risks and are hence robust against a wide range of future uncertainties. These lead to significant changes in response to energy system and carbon price uncertainties, in particular, (i) higher short- to medium-term investments into advanced technologies, (ii) pronounced emissions reductions, and (iii) diversification of the technology portfolio. From a methodological perspective, we find that there are strong interactions and synergies between different types of uncertainties. Cost-effective risk hedging strategies thus need to take a holistic view and comprehensively account for all uncertainties jointly. With respect to costs, relatively modest risk premiums (or hedging investments) can significantly reduce the vulnerability of the energy system against the associated uncertainties. The extent of early investments, diversification and emissions reductions, however, depends on the risk premium that decision makers are willing to pay to respond to prevailing uncertainties, and remains thus one of the key policy variables

An Assessment of Technological Change Across Selected Energy Scenarios

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Long-term Perspectives for Carbon Capture in Power Plants: Scenarios for the 21st Century

The report analyzes the role of fossil-fired power plants equipped with carbon capture systems in long-term scenarios of the global energy system representing technological change as an endogenous process. Within this framework the impacts of a technology policy is illustrated that requires over time an increasing fraction of fossil-fired power generation to incorporate carbon capture technologies. In particular, we examine the potential costs and the contribution that such a policy could offer in reducing energy-related carbon dioxide emissions and highlight some of the technologies that may play a role in doing so. The analysis is carried out with the global energysystems optimization MESSAGE model (Messner and Strubegger 1995) considering endogenous technology learning for fossil power plants and the corresponding carbon capture technologies, such that they experience cost reductions as a function of accumulated capacity installations. The report describes two baseline scenarios: (1) including learning for fossil power plants and (2) the other with no learning. In addition, the analysis examines three cases that are based on a technology policy that enforces an increasing share of fossil fuel power plants with carbon capture, distinguishing between future worlds assuming: (1) no learning for fossil systems, (2) learning just for the carbon capture component, and (3) full learning for the reference plants as well as for the carbon capture systems. The analysis shows that the introduction of a policy for carbon capture and storage would lead to considerable reductions in carbon emissions in the electricity sector and major changes in the power generation mix. Technologies are chosen, that provide the most cost-effective combination between electricity generation and carbon capture, fostering the penetration of advanced fossil technologies. In particular, coal gasification systems such as, IGCC power plants and high temperature fuel cells, and in addition gas-fired combined cycle power plants appear as the most attractive fossil-fired electricity generation options

Assessment of Alternative Hydrogen Pathways: Natural Gas and Biomass

Achieving large-scale changes to develop a sustained hydrogen economy requires a large amount of planning and cooperation at national and international levels alike. ECS developed a long-term hydrogen-based scenario (B1-H2) of the global energy system to examine the future perspectives of fuel cells (Barreto et al., 2002). That earlier study, done with the collaboration and support of the Tokyo Electric Power Company (TEPCO), illustrated the key role of hydrogen towards a clean and sustainable energy future. In an affluent, low-population-growth, equity and sustainability-oriented world, hydrogen technologies experience substantial but plausible performance and costs improvements and diffuse extensively. Fuel cells and other hydrogen-using technologies play a major role in a transformation towards a more flexible, less vulnerable, distributed energy system that meets energy needs in a cleaner, more efficient and cost-effective way. This profound structural transformation of the global energy system brings substantial improvements in energy intensity and an accelerated decarbonizaton of the energy mix, resulting in relatively low climate impacts. In order to understand the future potential of hydrogen, in this report we compare the two main hydrogen production alternatives from natural gas and biomass as identified in the above-mentioned (B1-H2) scenario in more detail. The first alternative, steam reforming of natural gas, is a well-established technology and the most common and current method to produce hydrogen (Ogden, 1999a). The second technology, biomass gasification, is still in its infancy. A small number of demonstration facilities are in place. Many issues still have to be addressed before the technology can be expected to reach an adequate technical performance and hence become economically competitive (Milne et al., 2002). Nevertheless, biomass-based systems are a very promising option for ensuring the sustainability of a future hydrogen-supply system. The report includes a comparative analysis of both systems and their potential for carbon mitigation via CO2 capture and sequestration. Estimates of the hydrogen costs for alternative production chains are presented, and the competitiveness of the systems under alternative CO2 taxes are analyzed. Both technologies appear as economically attractive and environmentally compatible options for shaping a sustainable hydrogen economy and contributing to the mitigation of greenhouse gas emissions in the long term

Co-Benefits and Trade Offs of INDCs (chapter 3)

Climate mitigation can trigger synergies and trade-offs with other policy objectives at the national level, such as poverty reduction, clean air, public health, or energy independence. Synergies (often referred to as co-benefits) are thus important because they influence the national support for climate mitigation policies and more directly impact the life of local populations

IIASA Greenhouse Gas Initiative (GGI) Long-term Emissions and Climate Stabilization Scenarios

This paper presents an overview of the greenhouse-gas emissions scenarios developed as part of an institute-wide collaborative effort within IIASA's Greenhouse Gas Initiative (GGI). The interdisciplinary research effort within GGI links all major research programs of IIASA dealing with climate change related research areas including population, energy, technology, forestry, as well as land-use changes and agriculture. GGI's research includes both basic as well as applied, policy-relevant research, aiming to assess conditions, uncertainties, impacts as well as policy frameworks for addressing climate stabilization both from a near-term as well as long-term perspective. We first describe the motivation behind this scenario exercise and introduce the main scenario features and characteristics in both qualitative as well as quantitative terms. Altogether we analyze three "baseline" scenarios of different socio-economic and technological developments which are assumed not to include any explicit climate policies. We then impose a range of climate stabilization targets on these baseline scenarios and analyze in detail feasibility, costs and uncertainties of meeting a range of different climate stabilization targets in accordance with the Article 2 of the United Nations Framework Convention on Climate Change (UNFCCC, 1992). The scenarios were developed by the IIASA Integrated Assessment Modeling Framework that encompasses detailed representations of the principal greenhouse gas emitting (GHG) sectors / energy, industry, agriculture, and forestry. Main analytical findings from our analysis focus on the implications of salient uncertainties (associated with scenario baselines and stabilization targets), on feasibility and costs of climate stabilization efforts and on the choice of appropriate portfolios of emissions abatement measures. We further analyze individual technological options with regards to their aggregated cumulative contribution toward emissions mitigation during the 21st century as well as their deployment over time. Our results illustrate that the energy sector will remain by far the largest source of GHG emissions and hence remain the prime target of emission reduction. Ultimately, this may lead to a complete restructuring of the global energy system. Climate mitigation could also significantly change the relative economics of traditional versus new, more climate friendly products and services. This is especially the case with the energy system that accounts for the largest share of emissions reductions, but is also the case in land use patterns where emissions reduction and sink enhancement measures are more modest