Heterogeneous Carbon Dioxide Emission Constraints in the European Energy System

TY - BOOK

T1 - Heterogeneous Carbon Dioxide Emission Constraints in the European Energy System

AU - Schwenk-Nebbe, Leon Joachim

PY - 2022/5

Y1 - 2022/5

N2 - Anthropogenic climate change calls for immediate emission reductions. However, to reduce emissions, we need to develop plans for alternatives to the current status quo. The European Union communicates ambitious goals and wants to make Europe the first climate-neutral continent. The necessary socio-economic developments will form a contentious debate in Europe. The problem is complicated because climate change mitigation is a collective challenge, and it will be costly for all nations involved. It requires attempting to strike a fine balance that incorporates different opinions. This is a political challenge ranging in all aspects of society from everyday decision making to transport, energy, taxation, and subsequent redistribution. To conquer the challenge, we need to fundamentally change our energy supply with unprecedented speed. The climate crisis is thus also an energy crisis for which policymakers will need guidance from experts in a variety of domains providing a solid scientific foundation for decision making. In the first part of this dissertation, the European electricity system of the near future is investigated. Energy system models have become a critical tool for determining cost-effective system designs that meet the ambitious climate change mitigation objectives. The models constitute large optimisation problems that find cost-optimal system layouts and dispatch decisions of generation capacity, storage solutions, and transmission between countries. The decarbonisation efforts call for increased shares of intermittent renewable generation capacity. Their weather-dependent variability makes spatio-temporally resolved modelling necessary to accurately capture the interactions between generation, storage, and transmission. We build advanced techno-economic models of the power system and investigate how collaboration between the European partners shapes their optimal system design. Besides considering national energy sovereignty and possible cross-border transmission grid extensions, we investigate the effects of attributing emission quotas to the European countries. International agreements on emission reductions face many challenges. One of the most delicate is the allocation of CO2 emission quota across countries. We investigate and compare different stylised attribution schemes. A homogeneous CO2 emission constraint for all European countries, with an associated global CO2 price, is shown to lead to the most cost-efficient system design. However, it is also shown to result in a particularly uneven distribution of national emission intensities. The inherent differences in the countries become even more apparent when transmission capacity expansions and the relaxation of national generation self-sufficiencies are investigated. However, we are able to show that a deep collaboration of European countries leads to regionally similar required CO2 prices and a decreased overall system cost. We give special attention to the spatio-temporal dynamics of the renewable mismatch and the resulting electricity prices in the modelled electricity systems. By analysing their emerging patterns, we find that a few principal components capture the majority of the variance in the time series. Thereby they offer both fundamental insights into the composition of the mismatch and price time series and present the potential to be applied for efficient approximation and forecasting of both imbalances and electricity prices. The second part of the thesis expands the scope to include additional energy sectors in the analysis: modelling the electricity, heating, industry, and transportation sectors in a sector-coupled brownfield approach. Employing this model, we investigate the near-future European energy system fulfilling the target of a 55% CO2 reduction in 2030 compared to 1990-levels defined by the EU Climate Law. We ask where emission reduction efforts should best be applied and how emission quota can be distributed among the energy sectors. Mapping out the competition between technologies, we find that an array of different technologies is needed to reach cost-optimal system states. On the national level, countries with high historical emission intensities experience especially strong decarbonisation pressures, resulting in the European countries becoming more similar in terms of CO2 emission intensities than they are today. The purpose of this thesis is to guide policymakers and investors, prepare them for anticipated challenges of the future European energy system, characterise the importance and substantial impact of emission constraints on countries and sectors, and inspire further research in the field.

AB - Anthropogenic climate change calls for immediate emission reductions. However, to reduce emissions, we need to develop plans for alternatives to the current status quo. The European Union communicates ambitious goals and wants to make Europe the first climate-neutral continent. The necessary socio-economic developments will form a contentious debate in Europe. The problem is complicated because climate change mitigation is a collective challenge, and it will be costly for all nations involved. It requires attempting to strike a fine balance that incorporates different opinions. This is a political challenge ranging in all aspects of society from everyday decision making to transport, energy, taxation, and subsequent redistribution. To conquer the challenge, we need to fundamentally change our energy supply with unprecedented speed. The climate crisis is thus also an energy crisis for which policymakers will need guidance from experts in a variety of domains providing a solid scientific foundation for decision making. In the first part of this dissertation, the European electricity system of the near future is investigated. Energy system models have become a critical tool for determining cost-effective system designs that meet the ambitious climate change mitigation objectives. The models constitute large optimisation problems that find cost-optimal system layouts and dispatch decisions of generation capacity, storage solutions, and transmission between countries. The decarbonisation efforts call for increased shares of intermittent renewable generation capacity. Their weather-dependent variability makes spatio-temporally resolved modelling necessary to accurately capture the interactions between generation, storage, and transmission. We build advanced techno-economic models of the power system and investigate how collaboration between the European partners shapes their optimal system design. Besides considering national energy sovereignty and possible cross-border transmission grid extensions, we investigate the effects of attributing emission quotas to the European countries. International agreements on emission reductions face many challenges. One of the most delicate is the allocation of CO2 emission quota across countries. We investigate and compare different stylised attribution schemes. A homogeneous CO2 emission constraint for all European countries, with an associated global CO2 price, is shown to lead to the most cost-efficient system design. However, it is also shown to result in a particularly uneven distribution of national emission intensities. The inherent differences in the countries become even more apparent when transmission capacity expansions and the relaxation of national generation self-sufficiencies are investigated. However, we are able to show that a deep collaboration of European countries leads to regionally similar required CO2 prices and a decreased overall system cost. We give special attention to the spatio-temporal dynamics of the renewable mismatch and the resulting electricity prices in the modelled electricity systems. By analysing their emerging patterns, we find that a few principal components capture the majority of the variance in the time series. Thereby they offer both fundamental insights into the composition of the mismatch and price time series and present the potential to be applied for efficient approximation and forecasting of both imbalances and electricity prices. The second part of the thesis expands the scope to include additional energy sectors in the analysis: modelling the electricity, heating, industry, and transportation sectors in a sector-coupled brownfield approach. Employing this model, we investigate the near-future European energy system fulfilling the target of a 55% CO2 reduction in 2030 compared to 1990-levels defined by the EU Climate Law. We ask where emission reduction efforts should best be applied and how emission quota can be distributed among the energy sectors. Mapping out the competition between technologies, we find that an array of different technologies is needed to reach cost-optimal system states. On the national level, countries with high historical emission intensities experience especially strong decarbonisation pressures, resulting in the European countries becoming more similar in terms of CO2 emission intensities than they are today. The purpose of this thesis is to guide policymakers and investors, prepare them for anticipated challenges of the future European energy system, characterise the importance and substantial impact of emission constraints on countries and sectors, and inspire further research in the field.

KW - Renewable energy

KW - Carbon dioxide

KW - Emission reduction

KW - Open-source energy modelling

KW - European energy policy

M3 - Ph.D. thesis

BT - Heterogeneous Carbon Dioxide Emission Constraints in the European Energy System

PB - Århus Universitet

T2 - PhD Defense: Leon J. Schwenk-Nebbe

Y2 - 24 May 2022 through 24 May 2022

ER -