UK Scenarios Development
MethodDr Neil Strachan
Senior Research Fellow, Policy Studies Institutestrachan@psi.org.uk

First Workshop on Developing Visions for a Low Carbon Society
through Sustainable Development
Tokyo, 14th June 2006

Outline• Scenarios typology– Descriptive, normative• Recent UK energy scenarios– Royal Commission on Environmental Pollution(RCEP)– Cabinet Office-DTI– Tyndall Centre• Key issues in quantifying UK scenarios– Modelling Cabinet Office-DTI scenarios with theUK MARKAL modelDescriptive Scenarios• Forecasting– Extrapolation from existing energy system– Historical trends, expert opinion– Shorter-term focus• Exploratory scenarios––––Illuminating key drivers (landscape level)
Can encompass surprises (often do not)
Focus on technological change
Longer-term focus• Technological scenarios– Focus on static representation of technologies– Less detail on social drivers

Normative Scenarios• Visions– Specific viewpoints of desirable energy futures– Encompass surprises and social change• Back-casting– Pathways to reach a desired end-point– Stakeholder consultation• Roadmaps– Stakeholder consultation– Identification of key barriers and opportunities– Identification of key timing of actions

Recent UK Energy Scenarios• RCEP (2000)– Basis for UK Energy White paper (including 60% CO2reduction target by 2050)– Technological scenarios• Cabinet Office-DTI (1999 – 2006)– UK government quantification of 60% CO2 target– Quantification using MARKAL dynamic optimisation model– Exploratory scenarios• Tyndall Centre (2005)– Scenario generation– Inclusion of additional sectors– Backcasting approach

RCEP: 60% CO2 reduction scenarios
Scenario
1Scenario
2Scenario
3

Scenario4

Low-grade heat0505066

High grade heat0252533

Electricity

0252533

Transport

0252533

TOTAL

0363647

Fossil fuels (no CCS)

3,339

3,339

3,339

3,339

Intermittent renewables

1,071

819504504

Other renewables

598

598

283

126

Nuclear or CCS

1,638

0598

0

Demand % reduction

Supply (PJ)

Tyndall Centre
RedBlue

Turquoise

PurplePink

GDP growth

3.3%

1.6%

2.6%

3.9%

3.9%

Final energy

90 Mtoe

130 Mtoe

200 Mtoe

330 Mtoe

330 MtoeHouseholds

27.5 M

25 M

30 M

27.5 M

27.5 M

House energy
reduction

Large

Very large

SmallNoneNoneKey electricity
technologies

Central coal

coal CCS,
CHPGas, nuclear

Renewable,
nuclearCoal, gas(CCS)

Private groundtransport

Reduction

Smallgrowth

No growth

Large
growthLarge growth

Public groundtransport

Very large
growthLarge
growthSmall growth

Large
growthLarge growth

AviationLow growth

MediumgrowthHigh growth

Very highgrowth

Very highgrowth

Decarbonisation
policies

innovation

Collective
demandSupply side

MarketfocusedMarketfocusedCabinet Office-DTI Scenarios• Two axis approach– Governance (autonomous - independence)– Social values (consumer – community)• Storylines included: GDP, sustainable development goals, regulation,
EU/global policies, international trade, energy markets, energy prices• World Markets–

a world defined by an emphasis on private consumption with a highly developedand integrated world trading system.

• Provincial Enterprise–a world of private consumption values coupled with policy making reflecting
local, regional and national concerns and priorities.

• Global Sustainability–social and ecological values are more pronounced and there is greater
effectiveness of global institutions, including stronger collective action in dealing
with environmental problems.

• Local Stewardship–stronger local and regional governance allow social and ecological values to bedemonstrated to a greater degree

Modelling the Cabinet Office-DTI Scenarios• Three scenarios (carbon constrained andunconstrained)– Baseline– World Markets– Global Sustainability• Practical implementation– Energy prices (oil, gas, coal)– Energy demand projections (by sector)– Sensitivity runs on innovation / diffusion• Technology class and energy efficiency• Dynamic supply side optimization modelling

Annual abatement costs (£Bn) for selected runs
2030

2040

2050

Baseline (BL)1510World Markets (WM)

2613

Global Sustainability (GS)

0.3

27

Limited Energy Efficiency(2.1% historic rate and no negative costoptions)

BL

3

512WM

3818GS

81738

Limited natural gas supplies(year 2000 levels)

BL

0

4

10WM

1515

GS

017

No innovation (frozen at 2010 levels)

BL

61942

Nuclear electricity increased by 0.5p/kWhr

BL

64

9

No nuclear or carbon sequestration

BL

1510

Scenario quantification issues 1• Focus on: scale of task to reach target– What do future (unconstrained carbon) worlds look like?
– Population, GDP, energy demands, global energy prices• Focus on: differentiation of pathways– For a state of the world, what can policy makers
influence?
– Technology costs, efficiency uptake, local energy prices• Ensuring a valid comparison between base andcarbon policy cases– Environmentally progressive in both ?
– Energy price developments in both ?
– Technology development only in the policy case ?

Scenario quantification issues 2• Are scenarios different enough?
– Categorizing the range of uncertainties– Capturing the interactions between uncertainties• A central scenario ?
• Which modelling outputs?
– GDP impacts, fuel use, technology uptake and costs,
security implications etc• And hence which modelling tools?
– MARKAL: great technological detail– Can add: elastic demands, Macro, learning curves– What to account for or endogenize in the model?

Thank you
Neil Strachan; strachan@psi.org.uk