Low Carbon Scenarios:
European Commission
Development Method
POLES: A world energy model and its
applications
A. Soria
IPTS, DG JRC Seville

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POLES: Model goals
 A world simulation model for the analysis of energy

systems and their global environmental impacts to2010 and 2030 :– scenarios and projections for energy demand, supply andprices– analysis of CO2 emission reduction options in aninternational perspective– impacts of technological change and R&D strategies

Policy Outlook on Long Term Energy Systems
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2CONTRIBUTIONS TO MODEL DEVELOPMENTThe model development has been initially funded under the JOULE II programmeof EU-DG XII with the main contribution the CNRS-IEPE, ECOSIM, JRCIPTS and the support of Enerdata, CEPII, ETSU, FhG-ISI and other partners.


1993-1995, a first version.
1996-1997, JOULE III programme CTS (Climate Technology Strategy) project :– complementarity with other models such as PRIMES and GEM-E3 new model





1998-1999, the POLES model improvement and utilisation continue in the EUDG XII « JOULE III » programme, in the TEEM (Technology Endogenisation
in Energy Models) project
1999-2001: SAPIENT
2000-2002: GECS
2001-2003: WETO, ACROPOLIS

2004-2006: EU New Member States, CIS, WETO-H2, EC
Communication “Winning the Battle Agianst Climate Change”
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The POLES model

The POLES 5 model is a recursive simulation model at world level,
working on a year by year basis, from 1998 to 2030

It incorporates more than 60 000 variables of which appr.:– 10 000 exogenous variables– 15 000 endogenousIt is thus built of a system of >50 000 equations organised in modules forthe different countries/regions and energy consuming sectors, activities
and technologies

The model provides a regularly updated Reference Case with associated
CO2 reduction costs, Technology Stories and other cases or sensitivity
analyses

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POLES 5: Modelling Characteristics
 Economic analysis– Recursive year by year simulation process, with behavioural
equations for energy demand, conversion, production and pricemaking processes
 Outputs– World long-term energy scenarios or projections– National-regional energy balance and CO2 emissions simulation– Analysis of new energy technologies potentials, markets anddiffusion– Test of energy policies and energy RTD strategies

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POLES 5 : Geographical coverage

47 regions

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POLES 5: Energy demand disaggregation
INDUSTRY

TRANSPORTRAS

Steel Industry

STI

Chemical industry (+feedstock)

CHI (CHF)

Non metallic mineral industry

NMM

Other industries (+non energy use)

OIN (ONE)Road transport

ROT

Rail transport

RAT

Air transport

ART

Other transports

OTT

Residential sector

RES

Service sector

SER

Agriculture

AGR

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Reaction on price and income changes
Standard Demand Equation

Ln(FC) = RES_FC+Ln(FC[-1])residual and lagged variable+ES*(0.67*Ln(AP/AP[-1])+0,33*Ln(AP[-1]/AP[-2]))
short-term price effect, current year and year -1+EL* Σ (i = -1to -DP : 6*DI[i-1]/(DP*(DP**2-1))*(i**2+DP*i)*Ln(AP[i-1]/AP[i-2]))long-term price effect with distributed lag
and asymmetry factor+EY*Ln(VA/VA[-1])income/activity elasticity+Ln(1+TR/100)
autonomous technological trend

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Technology Rich / Bottom-up Model:
New and Renewable Energy Technologies

Small combined heat and power (cogeneration)
CHP Small hydro power plants (<10 Mwe)
SHY Wind power (grid connected)
WND
 Solar thermal power plants (grid connected)
SPP Decentalised roof integrated photovoltaic system
DPV Rural electrification photovoltaic system
RPV Low temperature solar heat in building
LTS
 Conventional biomass (waste, electric., biofuels) BF1, BF2, BF3
 Biomass gasification in gas turbines
BGT Fuel-cells (vehicles, stationary and cogen.)
FCV, MFC, SFC


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Technology Rich / Bottom-up Model:Electricity generation technologies
Conventional large size hydropower Nuclear Light Water Reactor
 New nuclear design
 Supercritical pulverised fuel combustion (coal) Integrated coal gasification with CC
 Advanced thermodynamic cycle (coal) Lignite powered conventional thermal Coal powered conventional thermal Oil powered conventional thermal
 Gas powered conventional thermal
 Gas powered gas turbine in combined cycle
 Oil powered gas turbine in combined cycle
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HYD
LWR
NND
PFC
ICG
ATCLCT
CCT
OCT
GCT
GGT
OGT

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POLES 5: 31 major Oil & Gas producers

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POLES 5 World Oil Production
Oil production depends :– for Non OPEC, on the oil price and the Reserve/Prod. ratio– for OPEC non-Gulf, on the residual demand for OPEC oil– for Gulf countries on the residual demand and on capacities
Mbd

Mbd
50,070,060,0NOPEC
40,050,0OPEC
30,040,030,0OPEC

20,020,0NOPEC
10,010,00,00,0
65

70

7580

85

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65

70

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80

85

90

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POLES 5 : International Energy Prices - OIL
 The world oil price depends in the short run on the Gulf
countries capacities and in the long run on variations in theworld R/P ratio

Oil Production

International Prices
120
Oil

100

Gas

70
60
50
40
30
20
100
1980

Total, inc. Non-Conv.
Conventionnal
Gulf

80
Mbl/d$05/boe

100
90
80

60
40201985

1990

1995

2000

2005

2010

2015

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2020

2025

02000

2005

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2015

2020

2025

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POLES 5: Natural Gas Production from three Gas
Markets

CAN
USA

NLD
GBR
NOR

RCAM

MEX

DZA
LBY
EGY

ONAF

FRA, ITA, RFA,
BLX, DNK, FIN
IRL, SWE, ESP,
GRC, PRTCEU4RCEU
OOWE

NDE

OSAM

JPN
COR

FSUN

IRN
ARE
IRQ
KWT
OMN
QAT
SAU
ZON

NDE
BRN
MYS
IDN

FSUN
PAKE

OMIE

VNZ
COL
ECU
BRA

CHN

CHN

NGA
GAB
AGO

OSAS
OSEA

AUS

OJAN

SSAF

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Typical output
 energy balances per country/region
 development of energy prices
 trade matrices (e.g. gas, oil, coal) emission profiles
 technology deployment

Scenario approach

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Application and Results
 Low/High resources cases– impact of resources (basic information from US
Geological Service) Climate change policy– impact of climate change policy (Kyoto/post-Kyoto) Technology cases– accelerated technological development

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Scenario design
 Scenario design has to take into account the time

horizon and the capital equipment turnover time Short-term disruptions cannot be properly modelledwithin a long-term simulation prospective (noanalyses of energy crises or strategic fossil reserves,
but rather security of supply indicators)
 Each scenario requires an entire definition of themain exogenous assumptions (GDP, population
dynamics, reserves, technology deployment, market
regulatory setup, including semi-endogenous
variables, like carrying capabilities, recoverable
resources and the like)
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WETO
World energy,
technology andclimate policy
outlook

http://energy.jrc.es

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The Carbon Constraint Case (s)The Carbon Constraint Case in theon-going WETO study doesn’t
represent an EU climate policy
target.

It simply intends to explore a futureof ambitious carbon policies andtheir consequences on the energy
systemsThe constraints that has beenchosen are consistent with a longterm trajectory allowing astabilisation in CO2 concentrationsin the range of 500 - 550 ppmv
This implies an extension to thetime horizon (and the embedded
exogenous assumptions) to theyear 2050

Carbon Value120100€05/tC O 2EuropeRest Annex 1
Non-Annex 1

8060402002000

2005

2010

2015

2020

20252030

A peak in emissions between 2020
and 2030, at a level that doesn’t
exceed + 50 % compared to 1990
emissions is expected
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The resulting world CO2 emission profile



Total emissions can stabilise
between 2015 and 2025-2030 andstart a decrease

CO2 Emissions - WorldElectricity
Res-Ser-Agr
TransportIndustry

353025GtCO2

The peak in emissions seems tocorresponds to the crossing of a25-30 €/tCO2 threshold:201510502000

2005201020152020

2015

2020

2025

– just before 2015 for Annex 1
6000– and by 2025-2030 for NonAnnex 1
The crucial sectors to achieve
reductions seems to be theenergy transformation ones

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4000
MtCO2



5000

Electricity - Transformation
Res - Ser. - Agr.
Transport
Industry

3000
2000
1000
0
2000

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2010

2025

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CCC: World Primary Energy
16World 2025 primary energy
consumption decreases merely from
16 Gtoe in the REF to 15 Gtoe
Part of the reduction in final energy
demand is offset by the higher
contribution of nuclear energy (withhigher primary heat input)141210G toe

Renew ables
NuclearGasOilCoal

864202001

2005

2010

2015

2020

2025

Primary Consumption by Region

Due to early action in Annex 1, theprimary fuel mix changes quite
rapidly after 2010
The structure of world primary fuelmix is not dramatically alteredalready in 2025, but renewables andnuclear start gaining market share
immediately after the gas peak by
2020
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141210Gtoe864202001

2005

EuropeCIS
Middle East
Rest Asia

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2010

2015

North America
Latin America
China

2020

2025

Japan - Pacific
AfricaIndia

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CCC: World electricity
Total electricity consumption
is only 10 % down from theReference as thisincreasingly low carbon
energy-carrier substitutes toothers
 In 2030, carbon-freeelectricity is projected toaccount for 45% of world
power (renewable sources
represent 23 % of total
production and nuclear
electricity nearly 22 %, as its“revival” is relatively quick in
Annex 1 countries.


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35000
30000

TWh

25000

Renew ables
Nuclear
Gas
Oil
Coal

20000
15000
10000
5000
02001

2005

2010

2015

2020

2025

Thermal Electricity Production - World
25000
20000

w ith CO2 Capture and Storagew ithout CO2 Capture and Storage

TWh

15000
10000
500002000

2005

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2015

2020

2025

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International Fossil Fuel Markets
Oil Trade by Region
3000
2000

Rest Asia
Japan - Pacific
EuropeNorth America
Middle East
AfricaLatin America
CIS

0-1000-2000-3000

Net Im ports > 0

Gas Trade by Region
2001

2005

2010

2015

2020

2025

1500
1000

Asia
Japan - Pacific
EuropeNorth America
Middle East
AfricaLatin America
CIS500
Mtoe

Mtoe

1000

0-500
-1000
-1500

Net Im ports > 02001

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2020

2025

23CCC key insights
 The Carbon Constrained Case (s) is/are expected

to describe a very significant reduction scenario(from factor-2 to factor-4) for Europe in a consistentworld context
 It shows that ambitious climate policies :– increase the long-term sustainability of world oil and gas
resource use, as well as Europe’s energy self-sufficiency– require an intensified development of each one of thefour key energy portfolios:
1/ efficiency 2/ renewables 3/ nuclear energy 4/ CCS
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