Role of biomass in the energy system – linkages between the European energy system model TIMES...

University of Stuttgart

Institute of Energy Economics and the Rational Use of Energy

Role of biomass in the energy system -

linkages between the energy and the

agricultural in the EU until 2050

Markus Blesl*, Andre Deppermann**, Harald Grethe**

*Institute for Energy Economics and the Rational Use of Energy (IER), University of Stuttgart Germany

, **Agricultural and Food Policy Group, University of Hohenheim, Germany

19th November, 2014

TIMES CGE Workshop, Copenhagen

Markus Blesl Linkage of the agriculture and energy sector



November 19, 2014 2

Introduction

• Biofuels and bioenergy in general might be one important

GHG emission reduction option in the energy system.

• Potential supply and price of biomass has an impact on

future energy demand.

• Demand for biomass for energy production has an impact

on agricultural markets.

• Relationship between agricultural and energy prices is

expected to strengthen further.




November 19, 2014 3

Scenario assumptions ● Energy prices from WEO 2012

● Abolition of all EU biofuel mandates from 2015 on

● Limitation of area available for woody biomass to 30% of agricultural area

3 Scenarios with different greenhousegas reduction targets:

● ETS75 restricted on the ETS sector

● Overall sectors GHG emission reduction targets C75 (75% till 2050) and C80

0

10

20

30

40

50

60

70

80

90

2012 2015 2020 2030 2040 2050

Re

du

ctio

n t

aarg

et in

[%

]

ETS75 (rel. 2005)

C75 (rel. 1990)

C80 (rel. 1990)




November 19, 2014 4

Bioenergy potential in selected European

countries

Source: de Witt et al.

2008, RES 2020;

Bentsen 2012

0

500

1000

1500

2000

AT BG CZ DE DK EE ES FI FR GR HU IE IT LT LV PL PT RO SE SK UK

Bio

en

ergy

po

ten

tial

in [

PJ]

Additional potential energy crops till 2030 Energy crops waste (renewable) Forrest other Forrest wood




November 19, 2014 5

Dependency of the energy system and the

agriculture market

Agriculture Energy system

Price

Quantity

Demand Supply

Additional price for

energy crops

Demand of energy crops

from the energy system

P*

Q* Equilibrium quantity

Equilibrium

price




November 19, 2014 6

Product Mapping – Data harmonization

TIMES PanEU ESIM

Oilseeds Rapeseed, Sunflower,

Soybeans

Starchy Crops Corn, Wheat, Triticale, Rye,

Barley, Grass, Silage maize,

Sugar Crops White sugar

Woody Crops Area (woody crops not explicitly

modeled in ESIM)

Source: own compilation




November 19, 2014 7

TIMES PanEU

• Technology oriented bottom-up partial equilibrium model

• 30 region model (EU 28, No, CH)

• Energy system model

• SUPPLY: reserves, resources, exploration and conversion Country specific renewable potential and availability (onshore wind, offshore wind, ocean, geothermal, biomass, biogas, hydro)

• Electricity: public electricity plants, CHP plants and heating plants

• Residential and Commercial: End use technologies (space heating, water heating, space cooling and others)

• Industry: Energy intensive industry (Iron and steel, aluminium copper ammonia and chlorine, cement, glass, lime, pulp and paper), food, other industries, autoproducer and boilers

• Transport: Different transport modes (cars, buses, motorcycles, trucks, passenger trains, freight trains), aviation and navigation

• Country specific differences for characterisation of new conversion and end-use technologies

• Time horizon 2010 - 2050

• GHG: CO2, CH4, N2O, SF6 /Others pollutants: SO2, NOx, CO, NMVOC, PM2.5, PM10




November 19, 2014 8

European Simulation Model (ESIM)

• Comparative static partial equilibrium multi-country model for the agricultural sector

• Isoelastic supply functions (separate for yield and area) and demand functions

• 32 regions (EU Member States; USA, Croatia, Turkey, Western Balkans, RoW)

• Product coverage:

• 15 crops

• 21 processed products

• 6 animal products

• Pasture, set-aside




November 19, 2014

Primary energy consumption in the EU28

9

0%

5%

10%

15%

20%

25%

0

10000

20000

30000

40000

50000

60000

70000

80000201

0

ET

S75

C75

Öko

ET

S75

C75

C80

ET

S75

C75

C80

ET

S7

5

C75

C80

2020 2030 2040 2050

Pri

mary

en

erg

y c

on

su

mp

tio

n [

PJ]

Waste (nonrenewable)

Otherrenewables

Hydro, wind,solar, Ocean

Nuclear

Natural gas

Oil

Lignite

Coal

Share ofbioenergy




November 19, 2014 10

Bioenergy consumption in the EU28 by

application

0

2000

4000

6000

8000

10000

12000

14000

16000

18000

201

0

ET

S75

C7

5

C8

0

ET

S75

C7

5

C8

0

ET

S75

C7

5

C8

0

ET

S75

C7

5

C8

0

2020 2030 2040 2050

Co

nsu

mp

tio

n in

[P

J]

Residential sectorCommercial sectorAgricultureIndustryElectricity/Heat productionOthersHydrogenation of oil seedsBiodiesel productionEthanol production (1.Gen.)Ethanol production (2.Gen.)FT-Diesel productionMethanol productionDME productionHydrogen ProductionBiogas production





Energy crops demand in the EU28

0

1000

2000

3000

4000

5000

6000

7000

8000

9000

10000

2010 ETS75 C75 C80 ETS75 C75 C80 ETS75 C75 C80 ETS75 C75 C80

2020 2030 2040 2050

Ene

rgy

cro

p p

rod

uct

ion

in

[PJ

]

Starchy crops

Sugar crops

Rape seed

Woody crops





Comparison of real price index for starchy and woody crops in the EU28 (2006 = 100)

100

110

120

130

140

150

160

06/07 2015 2020 2025 2030 2035 2040 2045 2050

(20

06

= 1

00

)

Starchy Crops (C80)

Starchy Crops (ETS75)

Woody Crops (ETS75)

Starchy Crops (C75)

Woody Crops (C75)

Woody Crops (C80)





Comparison of the price index for energy crops and energy carrier in the EU28 (2010 = 100)

0

20

40

60

80

100

120

140

160

2010 2015 2020 2025 2030 2035 2040 2045 2050

(20

10

= 1

00

)

Year

natural gas

oil

coal

woody and starchy crops





Net exports of selected products in the EU28 in 2050 in kt

-60000 -40000 -20000 0 20000 40000 60000

SUNOIL

RAPOIL

PALMOIL

BIODIESEL

ETHANOL

SUNSEED

RAPSEED

CWHEAT

CORN

BARLEY

ETS75

C80

C75





Conclusions

• The chosen GHG mitigation scenarios, which do not take into account direct and indirect land use effects as well as emissions from higher production intensity in agriculture, result in:

• Strong price effects

• Enormous net trade effects

• Price changes for biomass effect demand from the energy sector

• A convergence after 3 to 4 iterations can be observed within the model coupling.

• Further work focus on detail modelling of bioenergy in both models (biogas, Lignocelluloses,…)….





● Thank you for your attention !

Role of biomass in the energy system – linkages between the European energy system model TIMES...

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