Jean-Francois Mercure, Yuki Ogawa, Soocheol Lee,Hector PollittCambridge Centre for Climate Change Mitigation
Research- 4CMR: at the crossroads of disciplines
Integrating economics, engineering, climatology, geography, social sciences…

- Study Energy-Economy-Environment interactions
Strongly data led (econometrics) and/or focus on systems dynamics,- Focus on impact assessments of climate change policy
Projections of global greenhouse gas emissions and environmental impacts- Energy systems modelling at the global scale
Fuel combustion emissions, technological change,
the diffusion of innovations

Global Energy-Economy-Environment system

De-nuclearisation or emissions reductions?

East-Asia currently faces difficult choices for energy generation.
1- After the Fukushima accident, questions are raised with nuclear
2- With climate change, questions are raised with fossil fuels
Research questions:-What is the impact on the energy sector of phasing out nuclear?
-What is the impact on the energy sector of phasing out coal?
- Do emissions increase or decrease?
- Do costs increase or decrease?

Future Technology Transformations Project (FTT)
Problem of modelling technology choice:Discrete choice theory, innovation-selection-diffusion

tt + ΔtJ.-F. Mercure, Energy Policy 48, 799-811 (2012)

Defining a driver for technology substitutions
Separating choice from industrial dynamics:

Probabilistic Choice matrix:

éë Fij ùû

J.-F. Mercure, Energy Policy 48, 799-811 (2012)

Modelling decision-making
Revealed preferences integrates agent diversity

ùProbabilistic Choice matrix: éFë ij û

Modelling technology substitution
Substitutions

Substitutions

Coal

Coal

Coal

CCGT

CCGT

CCGTHydroWindéë Fij ùûHydroWindéë Fij ùûHydroWindPVPVPVBIGCC

BIGCC

BIGCC

…

…

…

t=1

t=2

t=3…

J.-F. Mercure, Energy Policy 48, 799-811 (2012)

Modelling technological change
Substitutions
Coal

Coal

CCGT

CCGTHydro

Hydro

WindWind

PV

PV

BIGCC

BIGCC

…

…
tt + ΔtCounting technology substitutions
Substitutions
Coal

åj

CCGT
Hydro
Wind

Coal

éë Fij ùû

CCGT
Hydro
WindPV

PV

BIGCC

BIGCC

…

…
tt + ΔtJ.-F. Mercure, Energy Policy 48, 799-811 (2012)

Counting technology substitutions
Substitutions
Coal

D

CCGT
Hydro
WindPV
BIGCC

Coal=åj

CCGT
Hydro
WindCoaléë Fij ùûCCGT
Hydro
WindPVPV

BIGCC

BIGCC…
t…

…
tt + ΔtJ.-F. Mercure, Energy Policy 48, 799-811 (2012)

The Lotka-Volterra equation of population dynamics
Substitutions
Coal

D

CCGT
Hydro
Wind

Coal=åj

PV
BIGCC

CCGT
Hydro
Wind

Coal

éë Fij ùû

CCGT
Hydro
Wind

PV

PV

BIGCC

BIGCC

DSi = å Si S j ( Aij Fij - A ji Fji )Dtj

J.-F. Mercure, Energy Policy 48, 799-811 (2012)

Constraints of the system

Peak demand and storage capacity

Constrains growth of certain technologies
In situations of scarcity of flexibility
e.g. renewables in China

Constraints of the system
Base load vs peak load demand:

splitting of the market
Coal

Coal

BIGCC

BIGCC

WindWind

PVPV

CCGT

CCGT

Hydro

Hydro

Results: electricity generation and emissions

Assumptions:-Exogenous nuclear, and oil plant capacity-All other generator types endogenous-S1: No new nuclear builds, existing plants remain until retirement-S2: No new coal builds, existing plants remain until retirement-All scenarios:- FiTs for biomass, biogas, onshore+offshore wind and PV solar- No subsidies or carbon taxes

Results: electricity generation and emissions
S1S2

Results: electricity generation and emissions

Japan:-Slow demand growth rate
-Nuclear shut down replaced by fossil fuels  emissions -Baseline: emissions go back to original trajectory when nuclear restarts-S1: nuclear replaced by coal, emissions higher than Baseline- Double 2008 emissions level in 2030
- Electricity consumption unchanged-S2: coal replaced by gas + renewables,- Emissions in 2030 ~ 2008 level- Electricity consumption reduce (~8%) due to higher priceResults: electricity generation and emissions
S1

S2

Results: electricity generation and emissions

China:- Fast demand growth, fast rise in emissions mostly from coal
-Baseline:- large nuclear capacity rise (assumption)- Hydro resources generally near the limit (FTT cost-supply curve)- Other renewables quite insignificant-S1: nuclear entirely replaced by coal,  emissions higher than Baseline~ 2.5 times higher in 2030 than in 2008
-S2: coal replaced by expensive hydro projects + large scale biomass + gas- Consumption reduced (~9%) due to higher price- Emissions below 2008 level (~50%)

Results: electricity generation and emissions
S1

S2

Results: electricity generation and emissions

Korea:-Fast growth rate of demand and emissions, large amounts of coal
-Important share of nuclear- Baseline: fast rise of coal, some renewables (due to FiT)
- Rise in nuclear (assumption)- S1: nuclear replaced by coal  emissions higher than baseline- S2: coal replaced by gas + renewables + nuclear,- Emissions in 2030 ~ 2008 level- Electricity consumption reduce (~15%) due to higher priceResults: electricity generation and emissions
S1S2

Results: electricity generation and emissions

Taiwan:-Fast growth rate of demand and emissions, large amounts of coal
-Important share of nuclear- Baseline: fast rise of coal, some renewables (due to FiT)
- Rise in nuclear (assumption)- S1: nuclear replaced by coal  emissions higher than baseline- S2: coal replaced by gas + renewables + nuclear,- Emissions in 2030 ~ 2008 level- Electricity consumption reduce (~15%) due to higher priceResults: electricity generation costs

Baseline

Results: electricity generation costs

S1

Results: electricity generation costs

S2

Results: electricity generation costs

S1 & S2

Results: electricity generation costs

Baseline:- Costs are nearly constant throughout the period
S1:- Costs are nearly unchanged in all cases,- nuclear is replaced by coalS2
- Costs increase significantly in all cases:- Coal is the least cost option, which we phase out- FiT costs are added to total system costs- Uptake of renewables expensive- Grid balance provided by more hydro + gas turbines

List of model references- Data exploration on the 4CMR website:
http://www.4cmr.group.cam.ac.uk/research/FTT/fttviewer- Definition of FTT:Power: J-F Mercure, Energy Policy, 48 799-811 (2012)- Energy resources database: Mercure & Salas, Energy, 46 322-336 (2012)- Consumption of non-renewable resources: Energy Policy, 63, 469-483 (2013)
See also 4CMR working papers: http://ideas.repec.org/p/ccc/wpaper/002.html- Technology diffusion theory: http://arxiv.org/abs/1304.3602- Electricity sector scenarios and policy analysis: Energy Policy 73 686-700 (2014)- Economic impacts of decarbonisation: http://arxiv.org/abs/1310.4403