- 0 - February.2016

Modeling Trends of the European Electricity Sector

with a Focus on Nuclear Phase-outs in the UK and France

Berlin Conference on Energy and Electricity Econonomics; Berlin, 12. October 2016

Pao-Yu Oei, Clemens Gerbaulet, Christian von Hirschhausen, Mario Kendziorski, Casimir Lorenz Technische Universität Berlin, Workgroup for Infrastructure Policy (WIP)

Deutsches Institut für Wirtschaftsforschung (DIW Berlin), Energy, Transport and Environment (EVU)

- 1 - February.2016

Model application: Dynelmod

Scope: Europe Objective: System Cost minimization • Capacity Cost and Generation Cost • Investment cost

• Generation Capacities • Grid Expansion

Investments: five-year steps (2015), 2020, 2025,

2030, 2035, 2040, 2045, 2050, plant dispatch: hourly resolution over set of ~350 hours

Boundary condition examples • Country-sharp power plant portfolio development

(decommissioning of existing plants) • Electricity demand development per Country • CO2-Budget over time • Market coupling: NTC or Flow-Based

Source: Gerbaulet and Lorenz (2016)

- 2 - February.2016

Water Biomass Hard coal

Wind Lignite Diesel

Fuel Oil Gas

Nuclear Furnace gas Oil shale

Synthetic gas

Power Plants and Networks in Europe

Source: Schneider, Kuhs (2013)

- 3 - February.2016

Structural Changes in the Future, decommissioning of nuclear power plants in Europe

Source: Schneider, Kuhs (2013)

- 4 - February.2016

Implemented CO2 emission constraint for Europe aiming at a decarbonization of the electricity sector until 2050

Source: Energy Roadmap 2050; Impact Assesment SEC (2011) 1565; page 70 ; Scenario: "Diversified supply scenario"; column Power generation/District heating for EU27 countries

0

200

400

600

800

1000

1200

1400

2005 2010 2015 2020 2025 2030 2035 2040 2045 2050 2055

Mt

CO

2

- 5 - February.2016

The European Commission reduced their nuclear projection but still includes new constructions, esp. in France and UK

12 27 41 21 7 8 1 23 43 14 5 5 0

5

10

15

20

25

30

35

40

45

50

2025 2030 2035 2040 2045 2050

GW

EC Reference Scenario 2013 EC Reference Scenario 2016Source: EC (2013, 2016).

- 6 - February.2016

„Transition Enérgétique“ à la francaise

Electricity Sector Other sectors

Nuclear Renewable energies Demand on

fossil fuels

Greenhouse gas

emissions

Final energy

consumption (share of gross electricity consumption)

50% 40% -30% -40% -75% -50%

2025

2030

2030 2030 2050 2050

(base 2012) (base 1990) (base 2012)

The share of nuclear energy accounted for 76% in 2015 France. The Transition Enérgétique lays-out a pathway for the next decade but many things remain uncertain afterwards.

The following slides examine a “sobriety” scenario developed by Criqui, et al. (2015) assuming a path for 2050 with

- 0% share of nuclear, - >80% renewables, - -50% energy consumption

Source: “Loi sur la transition énérgétique” (2015)

- 7 - February.2016

Results of the sobriety scenario for France until 2050 – France remains an electricity exporter despite the nuclear phase-out

-100

0

100

200

300

400

500

600

700

2015 2020 2030 2040 2050

TWh

trade

Wind

Sun

Biomass

Hydro

Fossil

Nuclear

Soruce: Own modeling based on Criqui, et al. (2015).

- 8 - February.2016

Expected closure of existing nuclear power plants and investments in newbuilds envisaged by the UK energy strategy

0

2

4

6

8

10

12

14

16

18

20

2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036

GW

existing Capacity planned Capacity

Source: National Audit Office (2016), PRIS Database, own assumptions.

- 9 - February.2016

Two possible scenarios for a nuclear phase-out in the UK – sector-coupling might lead to increasing import needs in 2050

Scenario “D-EXP” (decarbonize and expand) depicts an intensive sector coupling and the usage of gas in combination with carbon capture, transport, and sequestration (CCTS).

Scenario “M-VEC” (multivector transition) is less reliant on electrification, and foresees a growth of electricity consumption only between 2040 and 2050 and a more limited availability of CCTS.

-100

-

100

200

300

400

500

600

700

2015 2020 2030 2040 2050 2015 2020 2030 2040 2050

D-EXP M-VEC

TWh

Nuclear Coal Gas Gas (CCTS) Hydro

Biomass Solar Wind Trade other

Soruce: Own modeling based on Pye, et al. (2015).

- 10 - February.2016

Conclusion: Decarbonization of the European electricity sector is compatible with a reduction of nuclear capacities

A reduction of nuclear capacities leads to • increased investment in gas, renewables, and storage; • reduced electricity generation by coal to be in line with the European CO2 target; • Shifts in electricity trades between neighbouring countries depending on national strategies.

-

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

2015 2020 2030 2040 2050

TWh

other

Wind

Sun

Biomass

Hydro

Gas CCS

Gas

Coal

Lignite

Nuclear

- 11 - February.2016

Modeling Trends of the European Electricity Sector

with a Focus on Nuclear Phase-outs in the UK and France

Berlin Conference on Energy and Electricity Econonomics; Berlin, 12. October 2016

Pao-Yu Oei, Clemens Gerbaulet, Christian von Hirschhausen, Mario Kendziorski, Casimir Lorenz Technische Universität Berlin, Workgroup for Infrastructure Policy (WIP)

Deutsches Institut für Wirtschaftsforschung (DIW Berlin), Energy, Transport and Environment (EVU)

- 12 - February.2016

Model application: Dynelmod

Investments • Conventional power plants • Renewables (PV, Wind Onshore/Offshore, CSP) • Storage (several storage options; e.g. Battery

storage options, pumped hydro storage) • Grid expansion (increase of NTCs)

Other Data • Hourly RES feed-in and load for 2012 based on

ENTSO-E and ECWMF weather data • Increase in full-load hours of renewables over time • Cost data mainly based on Schröder et al. (2013)

− Investment, Fix, and variable capacity cost

Calculation over a set of hours • Variation of time-of day • Variation of season • Scaling for feed-in and demand time series

- 13 - February.2016

Flow-based market coupling– Aggregation to a zonal PTDF

The flow based cross border interaction characteristics are derived from the actual underlying grid structure

Aggregation line sharp data to a country sharp PTDF

PTDF Calculation from the actual AC grid

𝑃𝑃𝑃𝐹𝑙,𝑛𝑛 = �𝐻𝑙,𝑛 ∗ 𝐵𝑛,𝑛𝑛−1 𝑛

Load on line using PTDF

𝑃𝑙 = �𝑃𝑃𝑃𝐹𝑙,𝑛 ∗ 𝑛𝑛𝑛𝑛𝑛𝑛𝑛𝑛𝑛𝑛

Aggregation to a zonal PTDF with maximum transfer capacities

𝑃𝑐𝑐,𝑐𝑐𝑐 = �𝑃𝑃𝑃𝐹𝑐𝑐,𝑐𝑐𝑐,𝑐𝑐𝑐𝑐𝑧𝑐𝑛𝑧𝑙 ∗ 𝑛𝑛𝑛𝑛𝑛𝑛𝑛𝑛𝑐𝑐𝑐𝑐𝑐𝑐𝑐𝑐

𝑃𝑐𝑐,𝑐𝑐𝑐𝑚𝑧𝑚 = min𝑖𝑐𝑃𝑖𝑐𝑚𝑧𝑚

𝑃𝑃𝑃𝐹𝑖𝑐,𝑐𝑐 − 𝑃𝑃𝑃𝐹𝑖𝑐,𝑐𝑐𝑐

Node-sharp representation of the European high voltage grid Blue: HVDC, red: 380 kV, yellow: 300 kV, green: 220 kV

- 14 - February.2016

Research on nuclear at DIW Berlin and TU Berlin

DIW Berlin Wochenbericht: • 13-2014: Atomkraft: Auslaufmodell mit

ungelöster Endlagerfrage • 22-2015: Stromversorgung bleibt sicher –

Große Herausforderungen und hohe Kosten bei Rückbau und Endlagerung

• 45-2015: Rückbau und Entsorgung in der deutschen Atomwirtschaft: öffentlich-rechtlicher Atomfonds erforderlich

• 45-2015: Europäische Klimaschutzziele sind auch ohne Atomkraft erreichbar

DIW Berlin Data Documentation 2015: Stand und Perspektiven des Rückbaus von Kernkraftwerken in Deutschland ("Rückbau-Monitoring 2015")

DIW Berlin Round-up: Uranium Power and the Uranium Market are Reserve and Ressource Sufficient (forthcoming)

- 15 - February.2016

France in focus

Technical lifetime of nuclear power plants is 45-50 years in Base scenario.

Early exit scenario: Plants decommissioned in 2030 are phased-out already in 2025 (>42 years).

Shutdown before 2020

Shutdown before 2025

Shutdown before 2030

-10

0

10

20

30

40

50

60

70

2020 2025 2030 2035 2040 2045 2050

Inst

alle

d C

apac

ity in

Fra

nce

in G

W

Base No new Nuclear EarlyExit

- 16 - February.2016

Assumptions for nuclear decommission in France

Last active model year

Plant Capacity (MW) Start Base No new nuclear

France Early Exit

Fessenheim 1 880 1977 2015 2015 2015 Fessenheim 2 880 1978 2015 2015 2015 Bugey 2 910 1979 2015 2015 2015 Bugey 3 910 1979 2020 2020 2020 Bugey 4 880 1979 2020 2020 2020 Bugey 5 880 1980 2020 2020 2020 Dampierre 1 890 1980 2020 2020 2020 Gravelines B-1 910 1980 2020 2020 2020 Gravelines B-2 910 1980 2020 2020 2020 Tricastin 1 915 1980 2020 2020 2020 Tricastin 2 915 1980 2020 2020 2020 Blayais 1 910 1981 2025 2025 2020 Dampierre 2 890 1981 2025 2020 Dampierre 3 890 1981 2025 2020 Dampierre 4 890 1981 2025 2020 Gravelines B-3 910 1981 2025 2020 Gravelines B-4 910 1981 2025 2020 Tricastin 3 915 1981 2025 2020 Tricastin 4 915 1981 2025 2020 Blayais 2 910 1983 2025 2020 Blayais 3 910 1983 2025 2020 Blayais 4 910 1983 2025 2020 St. Lauent B-1 915 1983 2030 2020 St. Lauent B-2 915 1983 2030 2020 Chinon B-1 905 1984 2030 2030 Chinon B-2 905 1984 2030 2030 Cruas Meysse 1 915 1984 2030 2030 Cruas Meysse 3 915 1984 2030 2030 Cruas Meysse 2 915 1985 2030 2030 Cruas Meysse 4 915 1985 2030 2030

Last active model year

Plant Capacity (MW) Start Base No new nuclear

France Early Exit

Gravelines C-5 910 1985 2030 2030 Gravelines C-6 910 1985 2030 2030 Paluel 1 1,330 1985 2030 2030 Paluel 2 1,330 1985 2030 2030 Flamanville 1 1,330 1986 2030 2030 Paluel 3 1,330 1986 2030 2030 Paluel 4 1,330 1986 2030 2030 St. Alban 1 1,335 1986 2030 2030 Cattenom 1 1,300 1987 2030 2030 Chinon B-3 905 1987 2030 2030 Flamanville 2 1,330 1987 2030 2030 St. Alban 2 1,335 1987 2030 2030 Belleville 1 1,310 1988 2035 2035 Cattenom 2 1,300 1988 2035 2035 Chinon B-4 905 1988 2035 2035 Nogent 1 1,310 1988 2035 2035 Belleville 2 1,310 1989 2035 2035 Nogent 2 1,310 1989 2035 2035 Penly 1 1,330 1990 2035 2035 Cattenom 3 1,300 1991 2035 2035 Golfech 1 1,310 1991 2035 2035 Cattenom 4 1,300 1992 2035 2035 Penly 2 1,330 1992 2040 2040 Golfech 2 1,310 1994 2040 2040 Chooz B-1 1,500 1996 2045 2045 Chooz B-2 1,500 1999 2045 2045 Civaux 1 1,495 1999 2045 2045 Civaux 2 1,495 2000 2045 2045

- 17 - February.2016

Nuclear development assumptions for Europe

0

20

40

60

80

100

120

140

160

2005 2010 2015 2020 2025 2030 2035 2040 2045 2050 2055

GW

Base No new nuclear France early exit

Slide Number 1Model application: DynelmodPower Plants and Networks in EuropeStructural Changes in the Future, decommissioning of nuclear power plants in EuropeImplemented CO2 emission constraint for Europe aiming at a decarbonization of the electricity sector until 2050The European Commission reduced their nuclear projection but still includes new constructions, esp. in France and UK„Transition Enérgétique“ à la francaiseResults of the sobriety scenario for France until 2050 – France remains an electricity exporter despite the nuclear phase-out Expected closure of existing nuclear power plants and investments in newbuilds envisaged by the UK energy strategyTwo possible scenarios for a nuclear phase-out in the UK – �sector-coupling might lead to increasing import needs in 2050Conclusion: Decarbonization of the European electricity sector is compatible with a reduction of nuclear capacitiesSlide Number 12Model application: DynelmodFlow-based market coupling– Aggregation to a zonal PTDF Research on nuclear at DIW Berlin and TU BerlinFrance in focusAssumptions for nuclear decommission in FranceNuclear development assumptions for Europe