IP NEEDS – Supply Securitys NEEDS FORUM 2, 5 - 6 July 2007, Krakow Laboratory for Energy Systems Analysis The Energy Departments Energy Externalities: Energy Externalities: Approaches, Insights, Limitations and Approaches, Insights, Limitations and Security of Supply Issues Security of Supply Issues Stefan Hirschberg Stefan Hirschberg Paul Scherrer Institut Paul Scherrer Institut NEEDS FORUM 2 NEEDS FORUM 2 Energy Supply Security – Present and Future Energy Supply Security – Present and Future Issues Issues 5 - 6 July 2007, Krakow, Poland 5 - 6 July 2007, Krakow, Poland
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Energy Externalities: Approaches, Insights, Limitations and Security of Supply Issues
Energy Externalities: Approaches, Insights, Limitations and Security of Supply Issues Stefan Hirschberg Paul Scherrer Institut NEEDS FORUM 2 Energy Supply Security – Present and Future Issues 5 - 6 July 2007, Krakow, Poland. Content. Introduction Some recent results - PowerPoint PPT Presentation
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IP NEEDS – Supply Securitys
NEEDS FORUM 2, 5 - 6 July 2007, Krakow
Laboratory for Energy Systems Analysis
The Energy Departments
Energy Externalities:Energy Externalities:Approaches, Insights, Limitations and Security of Supply IssuesApproaches, Insights, Limitations and Security of Supply Issues
Stefan HirschbergStefan HirschbergPaul Scherrer InstitutPaul Scherrer Institut
NEEDS FORUM 2NEEDS FORUM 2
Energy Supply Security – Present and Future IssuesEnergy Supply Security – Present and Future Issues5 - 6 July 2007, Krakow, Poland5 - 6 July 2007, Krakow, Poland
IP NEEDS – Supply Security, 2NEEDS FORUM 2, 5 - 6 July 2007, Krakow
Laboratory for Energy Systems Analysis The Energy Departments
• Introduction
• Some recent results
• Coupling with LCA-inventories
• Some difficult issues and limitations
• Multi-criteria Decision Analysis (MCDA) and integration of security of supply aspects
• Security of supply and climate protections – synergies or conflict of objectives?
• Conclusions
Content
IP NEEDS – Supply Security, 5NEEDS FORUM 2, 5 - 6 July 2007, Krakow
Laboratory for Energy Systems Analysis The Energy Departments
What are the components of security of supply?
• Availability of energetic and non-energetic resources(short-term and long-term)
• Risks caused by cost volatility
• Severe accidents and terrorist threat
• Overall stability and reliability of the supply system
IP NEEDS – Supply Security, 7NEEDS FORUM 2, 5 - 6 July 2007, Krakow
Laboratory for Energy Systems Analysis The Energy Departments
Current Monetary Damages due to Air Pollution in China
0 50 100 150 200
Billion US $ PPP per Year
China
Power SectorChina
Shandong
Power SectorShandong Crops Morbidity Mortality
196
45
25
8
Source:Hirschberg et al., 2003
IP NEEDS – Supply Security, 9NEEDS FORUM 2, 5 - 6 July 2007, Krakow
Laboratory for Energy Systems Analysis The Energy Departments
• Health impacts of emissions
• Global warming
• Impacts on crops and building materials
• (Impacts on biodiversity)
Focus of external costs assessment
IP NEEDS – Supply Security, 10NEEDS FORUM 2, 5 - 6 July 2007, Krakow
Laboratory for Energy Systems Analysis The Energy Departments
Results for Electricity Systems in EU-15: Base Case
0
1
2
3
4
5
6
7
8
Ext
ern
al C
ost
s (E
uro
ce
nt / kW
h)
RestPower Plant
Coal Oil Gas Nuclear
Hyd
ro
Gas
Photovoltaic WindCogeneration(all.exergy)
Die
sel
RenewablesFossil
ExternE-Pol: Dones et al., 2004
IP NEEDS – Supply Security, 11NEEDS FORUM 2, 5 - 6 July 2007, Krakow
Laboratory for Energy Systems Analysis The Energy Departments
External costs, new power plants, 2000 (air pollution)
IP NEEDS – Supply Security, 16NEEDS FORUM 2, 5 - 6 July 2007, Krakow
Laboratory for Energy Systems Analysis The Energy Departments
Results: Environmental Indicators, 2000
0.0
0.2
0.4
0.6
0.8
1.0
NPP, Gen
II, C
H
NPP, Gen
II, F
R
Hydro
: res
ervo
ir
Hydro
: run
-of-r
iver
Hard
Coal, S
C, D
Natur
al Gas
, CC, b
aselo
ad, C
H
Natur
al Gas
, CC, m
idloa
d, C
H
Natur
al Gas
, CC, b
aselo
ad, I
T
CHP, biog
as
CHP, Nat
ural
Gas
CHP, SNG
SOFC, Nat
ural
Gas
PV, c-S
i
PV, a-S
i
Wind
, ons
hore
, CH
Wind
, ons
hore
, D
Wind
, offs
hore
, DK
Geoth
erm
al
Rel
ativ
e to
sp
ecif
ic M
axim
um
(=
100%
)
Fossil energy UraniumMetals GHG emissionsLand use EcotoxicityAcidification & Eutrophication Land contaminationNon radioactive waste Radioactive wasteSource: PSI/GaBE, to be published
IP NEEDS – Supply Security, 17NEEDS FORUM 2, 5 - 6 July 2007, Krakow
Laboratory for Energy Systems Analysis The Energy Departments
Results: Environmental Indicators, 2000
0.0
0.2
0.4
0.6
0.8
1.0
NPP, Gen
II, C
H
NPP, Gen
II, F
R
Hydro
: res
ervo
ir
Hydro
: run
-of-r
iver
Hard
Coal, S
C, D
Natur
al Gas
, CC, b
aselo
ad, C
H
Natur
al Gas
, CC, m
idloa
d, C
H
Natur
al Gas
, CC, b
aselo
ad, I
T
CHP, biog
as
CHP, Nat
ural
Gas
CHP, SNG
SOFC, Nat
ural
Gas
PV, c-S
i
PV, a-S
i
Wind
, ons
hore
, CH
Wind
, ons
hore
, D
Wind
, offs
hore
, DK
Geoth
erm
al
Rel
ativ
e to
sp
ecif
ic M
axim
um
(=
100%
)
MetalsEcotoxicity
Non radioactive wasteSource: PSI/GaBE, to be published
IP NEEDS – Supply Security, 18NEEDS FORUM 2, 5 - 6 July 2007, Krakow
Laboratory for Energy Systems Analysis The Energy Departments
Results: Environmental Indicators, 2000
0.0
0.2
0.4
0.6
0.8
1.0
NPP, Gen
II, C
H
NPP, Gen
II, F
R
Hydro
: res
ervo
ir
Hydro
: run
-of-r
iver
Hard
Coal, S
C, D
Natur
al Gas
, CC, b
aselo
ad, C
H
Natur
al Gas
, CC, m
idloa
d, C
H
Natur
al Gas
, CC, b
aselo
ad, I
T
CHP, biog
as
CHP, Nat
ural
Gas
CHP, SNG
SOFC, Nat
ural
Gas
PV, c-S
i
PV, a-S
i
Wind
, ons
hore
, CH
Wind
, ons
hore
, D
Wind
, offs
hore
, DK
Geoth
erm
al
Rel
ativ
e to
sp
ecif
ic M
axim
um
(=
100%
)
Uranium
Land contaminationRadioactive wasteSource: PSI/GaBE, to be published
IP NEEDS – Supply Security, 19NEEDS FORUM 2, 5 - 6 July 2007, Krakow
Laboratory for Energy Systems Analysis The Energy Departments
Results: Environmental Indicators, 2000
0.0
0.2
0.4
0.6
0.8
1.0
NPP, Gen
II, C
H
NPP, Gen
II, F
R
Hydro
: res
ervo
ir
Hydro
: run
-of-r
iver
Hard
Coal, S
C, D
Natur
al Gas
, CC, b
aselo
ad, C
H
Natur
al Gas
, CC, m
idloa
d, C
H
Natur
al Gas
, CC, b
aselo
ad, I
T
CHP, biog
as
CHP, Nat
ural
Gas
CHP, SNG
SOFC, Nat
ural
Gas
PV, c-S
i
PV, a-S
i
Wind
, ons
hore
, CH
Wind
, ons
hore
, D
Wind
, offs
hore
, DK
Geoth
erm
al
Rel
ativ
e to
sp
ecif
ic M
axim
um
(=
100%
)
Land useAcidification & EutrophicationSource: PSI/GaBE, to be published
IP NEEDS – Supply Security, 20NEEDS FORUM 2, 5 - 6 July 2007, Krakow
Laboratory for Energy Systems Analysis The Energy Departments
Results: Environmental Indicators, 2030
0.0
0.2
0.4
0.6
0.8
1.0
NPP, Gen
III,
CH
NPP, Gen
III,
FR
Hydro
: res
ervo
ir
Hydro
: run
-of-r
iver
Hard
Coal, I
GCC, D
Natur
al Gas
, CC, b
aselo
ad, C
H
Natur
al Gas
, CC, m
idloa
d, C
H
Natur
al Gas
, CC, b
aselo
ad, I
T
CHP, biog
as
CHP, Nat
ural
Gas
CHP, SNG
SOFC, Nat
ural
Gas
PV, c-S
i
PV, a-S
i
Wind
, ons
hore
, CH
Wind
, ons
hore
, D
Wind
, offs
hore
, DK
Geoth
erm
al
Rel
ativ
e to
sp
ecif
ic M
axim
um
(=
100%
)
Fossil energy UraniumMetals GHG emissionsLand use EcotoxicityAcidification & Eutrophication Land contaminationNon radioactive waste Radioactive waste
Source: PSI/GaBE, to be published
IP NEEDS – Supply Security, 21NEEDS FORUM 2, 5 - 6 July 2007, Krakow
Laboratory for Energy Systems Analysis The Energy Departments
• Severe accidents, terrorism, risk aversion• Visual intrusion• Resource depletion• Nuclear proliferation• Security of supply
Serious attempts to estimate the corresponding costs lead to low estimates but this does nor resolve the controversy!
Examples of controversial/difficult to estimate external effects
IP NEEDS – Supply Security, 22NEEDS FORUM 2, 5 - 6 July 2007, Krakow
Laboratory for Energy Systems Analysis The Energy Departments
Survey I: Result examples
Source: Faberi et al., to be published
IP NEEDS – Supply Security, 23NEEDS FORUM 2, 5 - 6 July 2007, Krakow
Laboratory for Energy Systems Analysis The Energy Departments
Survey I: Result examples
Source: Faberi et al., to be published
IP NEEDS – Supply Security, 25NEEDS FORUM 2, 5 - 6 July 2007, Krakow
Laboratory for Energy Systems Analysis The Energy Departments
Electricity: contribution to external costs by species
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Rad. Em.
NMVOC
Heavy Metals
PM2.5
NOx
SO2
GHG
ExternE-Pol: Dones et al., 2004
IP NEEDS – Supply Security, 27NEEDS FORUM 2, 5 - 6 July 2007, Krakow
Laboratory for Energy Systems Analysis The Energy Departments
Variation in estimated costs of CO2 damages
-100
0
100
200
300
400
With 3%discounting and
regional values (Tol2006)
With 0%discounting andequitiy weighting
(Tol 2006)
Abatement costsEuropean Union(ExternE 2004)
Willingnes-to-PaySwiss Referenda
(Heck 2004)
Very low estimate(Downing et al.
2005)
Assumption BMUGermany (Krewitt
et al. 2006)
Very high estimate(Downing et al.
2005)
Based on impact assessment anddamage costs (ExternE/NEEDS)
Based onabatement costs
Based on referenda Range of uncertainty (uncertainties in climate change,impacts, extremes, valuation) (Downing et al. 2005)
Euro
20
00/
ton C
O2
IP NEEDS – Supply Security, 28NEEDS FORUM 2, 5 - 6 July 2007, Krakow
Laboratory for Energy Systems Analysis The Energy Departments
Examples of Severe Accidents
Oilwell blowout
Coal mine highwall collapse
Gas pipeline explosion
Dam break (Teton, USA)
IP NEEDS – Supply Security, 29NEEDS FORUM 2, 5 - 6 July 2007, Krakow
Laboratory for Energy Systems Analysis The Energy Departments
Frequency of accidents
• Fossil chains perform similar for OECD and non-OECD countries; exception is coal chain in China with clearly higher accident rates
• Hydro dam failures in non-OECD countries can result in thousends of fatalities; no such accident happened in OECD since 1963 (1963: Vaiont, Italy; 1917 fatalities)
• Additionally to immediate fatalities, also latent fatalities are important for nuclear power
Source: Burgherr & Hirschberg, 2004
IP NEEDS – Supply Security, 30NEEDS FORUM 2, 5 - 6 July 2007, Krakow
Laboratory for Energy Systems Analysis The Energy Departments
Justified and Unjustified Stakeholder Criticisms of External Costs
• Monetization as such is not accepted by all.
• Alternative approaches to Willingness to Pay (WTP) are preferred.
• The way WTP estimates are generated is put in question. • The overall uncertainties are very large leading to non-robust rankings.
• The historical development of cost estimates is troublesome. • Some estimates of specific external costs have a weak basis; for some
potentially important externalities relevant cost estimates are not available.
• Social factors are scarcely represented.• It is impossible and/or meaningless to monetize some of the social factors.
IP NEEDS – Supply Security, 31NEEDS FORUM 2, 5 - 6 July 2007, Krakow
Laboratory for Energy Systems Analysis The Energy Departments
Examples of difficult but potentially important social aspects:
• Social justice
• Risk aversion and perception
• Resilience of the energy system
• Conflict potential
Theoretically, any externality can be monetized, but in practice methodologies and valuation are often controversial.
IP NEEDS – Supply Security, 32NEEDS FORUM 2, 5 - 6 July 2007, Krakow
Laboratory for Energy Systems Analysis The Energy Departments
Criteria related to security of supplyCRITERION INDICATOR Direction of
scaleUNIT
1 ENVIRONMENT1.1.1.1 Fossil primary energy Total consumption of fossil resources (LCIA) min MJ/kWh1.1.1.2 Other non-renewable energy Total consumption of uranium (LCIA) min MJ/kWh1.1.2 Mineral Resources (Ores) Weighted total consumption of metallic ores min kg(Sb-eq.)/kWh1.3.2.1 Release of hydrocarbons Large release of hydrocarbons (RA) min t/kWh1.3.2.2 Land contamination Catastrophic land contamination (RA) min km2/kWh2 ECONOMY2.2.2 Autonomy of electricity generation Medium to long term independence from foreign
imports, based on domestic energy storage and/or resources
max Ordinal
2.3.1.2 Impact of fuel price changes Sensitivity to fuel price changes min Factor3 SOCIAL ASPECTS3.1.1.1 Diversity of primary energy suppliers Market concentration in the supply of primary
sources of energymin Ordinal scale
3.2.1 Potential of Conflicts induced by Energy Systems.
Potential of energy system induced conflicts that may endanger the cohesion of societies
min Ordinal scale
3.3.2.1 Expected Health effects from accidentsExpected Mortality due to severe accidents (RA) min Fatalities/kWh3.3.2.2 Maximum consequences of accidents Maximum credible number of fatalities per
accidentmin Fatalities/accident
3.3.4.1 Potential of attack Potential for a successful attack (RA) min Ordinal scale3.3.4.2 Effect of a successful attack Likely potential effects of a successful attack (RA) min Expected number
of fatalities3.3.4.3 Proliferation Potential for misuse of technologies and
substances within the energy chainmin Ordinal scale
3.4.1.1 Equitable life conditions Share of the effective electricity costs in a social welfare receiver budget
min %
IP NEEDS – Supply Security, 33NEEDS FORUM 2, 5 - 6 July 2007, Krakow
Laboratory for Energy Systems Analysis The Energy Departments
Sensitivity analysis of production costs for new NPP
IP NEEDS – Supply Security, 36NEEDS FORUM 2, 5 - 6 July 2007, Krakow
Laboratory for Energy Systems Analysis The Energy Departments
Comparison production costs new NPP and CCGT
Source: Prognos 2006
Capital costs Fuel costsOperating costs
CCGT 2035Prices trend
CCGT 2035Prices high
NPP 2035Prices trend and high
IP NEEDS – Supply Security, 37NEEDS FORUM 2, 5 - 6 July 2007, Krakow
Laboratory for Energy Systems Analysis The Energy Departments
US President Gerald Ford in 1975:
• „We, the United States, are not blameless. Our growing dependence upon foreign resources has been adding to our vulnerability for years and years, and we did nothing to prepare ourselves for such an event as the embargo of 1973.“
• „Within the next 10 years my program envisions 200 major nuclear power plants, 250 major new coal mines, 150 major coal –fired power plants, 30 major new refineries, 20 major new synthetic fuel plants, the drilling of many thousands of new wells, the insulation of 18 million homes and the manufacturing and sale of millions of new automobiles, trucks and buses that use much less fuel.“
IP NEEDS – Supply Security, 38NEEDS FORUM 2, 5 - 6 July 2007, Krakow
Laboratory for Energy Systems Analysis The Energy Departments
MCDA Demo
IP NEEDS – Supply Security, 39NEEDS FORUM 2, 5 - 6 July 2007, Krakow
Laboratory for Energy Systems Analysis The Energy Departments
Conclusions: external costs
• Health effects due to air pollution and global warming impacts dominate current estimates of external costs.
• External environmental costs may be substantial but large variety between technologies and sites. Good technologies including advanced fossil have rather low pollution costs.
• Uncertainties are large but ranking of technologies is relatively robust. • External costs of nuclear and renewables are low; external costs of natural gas are
moderate; external costs of coal and oil are highest.• Social aspects of energy systems are represented to limited extent by current estimates of
external (and total) costs.• External costs are no panacea and have limitations. Serious attempts to estimate some of
the controversial costs usually lead to low estimates but this is not accepted by some stakeholder groups.
• Internalisation of external costs is economically and socially justified. It leads to more efficient overall economy.
IP NEEDS – Supply Security, 40NEEDS FORUM 2, 5 - 6 July 2007, Krakow
Laboratory for Energy Systems Analysis The Energy Departments
• Security of supply is fundamental for a sustainable energy policy
• Needs to be pursued along with protection of health, environment and climate, resource saving and affordability
• In NEEDS a variety of indicators represents security of supply issues
• There are synergies but also some conflicts between security of supply and climate protection & other overriding sustainability policy goals.
• Trade-offs are inevitable and will be highlighted through MCDA implementation within NEEDS.