The value of CCS: socio-economic impacts

Piera Patrizio1,2, Yoga Pratama2, Niall Mac Dowell2

1 International Institute for Applied Systems Analaysis (IIASA)2 Imperial College London

Value ≠ cost

CF Heuberger, et al, Computers and Chemical Engineering, 2017

Can we measure social value?

• We need more than just a discussion around technologies…

• Wider social impacts are becoming popular (COP24, UN SDGs)

• How do we account for social equity in evolving energy systems?

• It’s an intertwined word…

Sustainable development

Environment

Society Economy

INTERTWINED socio-ecological Systems INTEGRATED dimensionsFolke, C et al., (2016). Social-ecological resilience and biospherebased sustainability science. Ecology and Society 21(3):41.

Jobs and Economic Development Impact (JEDI)

US coal sector technology transition

65%

46%

52%

2° targetBAU

BECCS

Coal wCCS

NGCC

Coal

Bio w Coal

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

90,000

2020 2025 2030 2035 2040 2045 2050

Cum

ulat

ive

inve

stm

ent i

n El

gen

erat

ion

(MU

S$/y

ear)

CCSBECCSNGCCBAURCP 2.6

Patrizio et al. (2018)

Nation-Wide22,000

Great Lakes 12,000

40,000

Illinois14,000

JOB added

Biomass supply and transport

JOB preserved

Mining Jobs

26,000 Energy generation

US Employment

Nation-Wide

< 500 < 1000 < 2000 > 2000< 100 < 500 < 1000 > 1000

Patrizio et al. (2018)

US trade-offs: BAU vs 2° target

Socially equitable energy systems in Europe

• Over the last decade, the EU has pursued a proactive climate policy (20-20-20 targets),

resulting in high level of renewable energy penetration and energy efficiency increase.

• Local communities and stakeholders across Europe, are increasingly advocating the need for

the transition to low carbon society to be socially just.

• The new European Strategic Agenda (2019-2024) promote a green transition that poses keen

attention to social issues.

• The inevitable consideration of how best to value alternative approaches requires a

broadening of focus from project cost metrics to a wider societal perspective.

ESO - JEDI framework

Energy transition pathways in Poland

System’s transition: Installed capacity

12

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Inst

alle

d ca

pacit

y (GW

)

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2015 2020 2025 2030 2035 2040 2045 2050

Inst

alle

d ca

pacit

y (GW

)

GenStoPHStoInterStoInterImpSolarWind-OffshoreWind-OnshoreHydroOCGTCCGT-PostCCS(Ret)CCGT-PostCCSCCGTBECCSBioCoal-PostCCS(Ret)Coal-PostCCSCoalNuclear

BAU Renewables and Storage

Least cost energy system transition in Poland If CCS is not allowed, Poland will have an overbuilt and underutilised power system.

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2015 2020 2025 2030 2035 2040 2045 2050

CI (t

CO2/

MW

h)

Ener

gy o

utpu

t (TW

h)

GenStoPHStoInterStoInterImpSolarWind-OffshoreWind-OnshoreHydroOCGTCCGT-PostCCS(Ret)CCGT-PostCCSCCGTBECCSBioCoal-PostCCS(Ret)Coal-PostCCSCoalNuclearCarbon intensity (CI)

13

Least cost versus social value maximization

Minimizing cost

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2015 2020 2025 2030 2035 2040 2045 2050

CI (t

CO2/

MW

h)

Ener

gy o

utpu

t (TW

h)

GenStoPHStoInterStoInterImpSolarWind-OffshoreWind-OnshoreHydroOCGTCCGT-PostCCS(Ret)CCGT-PostCCSCCGTBECCSBioCoal-PostCCS(Ret)Coal-PostCCSCoalNuclearCarbon intensity (CI)

Maximizing social value

Domestic coal brings the greatest value to the economy, even in a carbon constrained scenario.

In the pure least cost scenario, Polish power system is dominated by thermal plants

14

Critical sectors for the Polish economy

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Min.TSC

Max.GVA

Min.TSC

Max.GVA

Min.TSC

Max.GVA

Min.TSC

Max.GVA

Min.TSC

Max.GVA

Min.TSC

Max.GVA

Current Wind Solar Battery Nuclear Gas

GVA

to T

SC r

atio

(%)

Elec

tric

ity ge

nera

tion

(TW

h)

Import scenario and objective function

GenStoPHStoInterStoInterImpSolarWind-OffshoreWind-OnshoreHydroOCGTCCGT-PostCCS(Ret)CCGT-PostCCSCCGTBECCSBioCoal-PostCCS(Ret)Coal-PostCCSCoalNuclearGVA to TSC ratio

202.8 213.5 226.4

474.7

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BAU Diversification Social equity -max. GVA (gas)

Renewables &storage

GVA

to T

SC r

atio

(%)

Tota

l sys

tem

cos

t (bi

llion

£)

TSC GVA to TSC ratio

Pursuing a net-zero strategy, while focusing on strategic industrial sectors, increase the economic competitivness (higher GVA/TSC), thus the social benefits.

Benefits are maximized with greatest share of domestic natural gas, allowing to reduce the share of nuclear and imported electricity

Concluding remarks

• Traditional cost metrics (least cost approach) cannot capture socio-economic impacts of energy systems trasitions. We must focus on metrics that reflect other values (GDP growth and employment creation)

• Low carbon and just energy transition can be achieved by:- Promote deployment of thermal power plant by deploying CCS - Integrating strategic sectors (e.g gas industry) in national economy

Dr. Patrizio Piera Research Scholar

patrizip@iiasa.ac.atwww.iiasa.ac.at

Thank you!