The innovation challenge STAKEHOLDER CONFERENCE "Post-2012 climate policy for the EU" 22 NOVEMBER...

The innovation challenge

STAKEHOLDER CONFERENCE "Post-2012 climate policy for the EU"22 NOVEMBER 2004

Niklas Höhne [email protected] Cologne, Germany


Stabilization paths

0

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

1990 2000 2010 2020 2030 2040 2050

GtC

eq.

-100%

-80%

-60%

-40%

-20%

0%

20%

40%

60%

80%

100%

120%

Ch

ang

e to

199

0

450ppm

550ppm

400/350ppm

(Source: Ecofys, adapted from post SRES stabilization paths Morita et al. 2001, CO2 only)

Corresponding temperature levels at equilibrium:

550ppm: around 3.2°C

450ppm: above 2.5°C

350ppm: around 1.5°C

(Source: IPCC TAR 2001, average climate sensitivity)

Reference


Content

What needs to be done today to reach stabilization of CO2

concentrations and the 2°C target?

– Stabilization of CO2 concentrations at any level level requires global emissions to decline to a very low level.

– For 450ppmv CO2 globally below 1990 levels in 2050 and in industrialized countries below 1990 levels by factor 3 to 5

1. Technological change

2. Choice of technologies

3. Costs


Emissions = activity energy/activity GHG/energy

0%

20%

40%

60%

80%

100%

0% 1% 2% 3% 4% 5%

Annual energy efficiency improvement (reduction SEC)

Sh

are

of

zero

-em

iss

ion

so

urc

es

50%

60%

70%

80%

(Source: K. Blok, “Technology choices: how to set innovation targets for energy-efficiency improvement and low-carbon energy sources?”)

Sh

are

of

zero

em

issio

n

sou

rces

Annual energy efficiency improvement

Emission reduction in the EU until 2050

At 2% annual increase in energy consuming services


Two options for action on technology development

Option A: Develop new technologies to be applied later- Danger that technologies will not emerge as planned (e.g.

fusion)- Danger of “lock-in”: Old technologies and infrastructure

prescribe future path

Option B: Support new technologies now- Technological learning: Performance improvements, cost

reduction and diffusion


Development of wind technology

0,0%

1,0%

2,0%

3,0%

4,0%

5,0%

6,0%

1990 1992 1994 1996 1998 2000 2002 2004

shar

e in

to

tal g

ross

ele

ctri

city

ou

tpu

t (%

)

AustriaBelgiumDenmarkFinlandFranceGermanyGreeceIrlandItalyNetherlandsPortugalSpainSwedenUKEU

IRL

I

D

E

F

DK: 16.6% (2003)17.1% (2004)17.5% (2005)

EU15

UK

2004 calculated from wind capacities installed to July 2004 and estimated installed wind capacities for second half of 2004. 2005: short-term projections

Wind power production in the EU15

: Share in overall gross electricity

production

NL

S

GR

P

A

FIN B

Source: Wolfgang Eichhammer, Fraunhofer Institute for Systems and Innovation Research, Karlsruhe, Germany


Development of wind technology

Learning curve for wind energy in Germany

0

200

400

600

800

1000

1200

1400

1600

1800

10 100 1000 10000 100000

Installed capacity [MW]

Co

st [

€/kW

]

1990

2003

Development of wind turbines


Long-term impact of today’s decisions

Existing stock is constantly replaced


Conclusions technological learning

• Use low emission technologies now to reduce the costs in the long term

• Use today’s huge investments in the energy system

• Avoid “lock-in” effect


Case I: Carbon capture and storage (Edmonds)

Without capture and storage technology

With capture and storage technology

Edmond’s conclusions:Cost to move from reference to path with CO2 storage technology is significantly lower than to path without CO2 storage technology -> storage technology lowers cost of stabilization

Source: Kim & Edmonds 2000, Potential for advanced carbon capture and sequestration technologies in a climate constrained world


Case II: German Advisory Council on Global Change

Exemplary path that meets 450 ppmv CO2 concentrationSource: WBGU www.wbgu.de

1. Major reduction in fossil fuels

2. Phase-out of nuclear

3. Expansion of solar

4. Substantial improvement in energy efficiency

Council’ conclusions:

•A fossil / nuclear path: substantially larger risks and significantly more expensive mainly due to CO2 sequestration

•Time lag: the period of next 10–20 years is decisive window of opportunity for transforming energy systems. If missed: higher costs


Conclusions choice of technology

• Ambitious energy efficiency improvements and development of zero emission technologies are needed

• No single technology alone can be the solution –many should be supported

• Technological development is uncertain• Cost and effect of R&D is difficult to model• Opinions diverge on the optimal path


Costs to introduce technologies

0

0.05

0.1

0.15

2000 2010 2020

US

c/kW

h

0%

5%

10%

15%

Sha

re o

f OE

CD

ele

ctric

ity g

ener

atio

n

Source: Sandén & Azar (2003), Assumption: growth rate 30%/year, progress ratio 0.8.

Empirical example:• Wind in Germany (feed-in tariff):

~+0.4 Cent/kWh for all electricity used

Model result:• PV in OECD countries

< 0.1 Cent/kWh for all electricity used


Case III: IIASA

IIASA’s conclusions:Total energy system costs and emissions are lower, if fast technological development is assumed

Source: Roehrl & Riahi 2000, Technology Dynamics and Greenhouse Gas Emission Mitigation

All scenarios: high economic growth (3%/a), global cooperation, but with different technological developmentsA1C - Coal: R&D per turnover: 0.3%, today’s rateA1T - Technology: Large scale targeted R&D:4-13%, cheap nuclear and renewables

Costs include non-discounted cumulative cost of operation and maintenance of energy production, conversion, transformation and distribution, but not end-use technologies and R&D investments (assumed to be smaller than differences shown here)


Cost for stabilization: IPCCPresented as difference between GDP in 2050 in reference case and GDP in 2050 in stabilization case:

4% GDP loss over 50 years = 0.08% per year

Source: IPCC TAR


Cost for stabilization is only postponement of GDP growth

Source: Azar & Schneider 2002


Conclusions• Be ambitious in - energy efficiency improvements

- development of zero-emission technologies

• No single technology alone can be the solution Opinions diverge on the optimal path

• A portfolio of policies is necessary to stimulate long-term technological development – Act now: Avoid the ‘lock-in’ into an emission intensive path,

next 10 to 20 years are crucial– Use new technology: Application of still expensive technologies today

can accelerate the cumulative learning and be cost effective in the long term

– Intensify development of new technologies: huge joint long-term research and development efforts needed

• Possibly higher cost in the short term but lower absolute cost in the long term. Total global cost may be large in absolute terms, but small compared to the expected growth in GDP

The innovation challenge STAKEHOLDER CONFERENCE "Post-2012 climate policy for the EU" 22 NOVEMBER...

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