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RIETI BBL Seminar Handout Speakers: Mr. Didier HOUSSIN & Mr. HATTORI Takashi http://www.rieti.go.jp/jp/index.html October 7, 2014 Research Institute of Economy, Trade and Industry (RIETI)
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RIETI BBL Seminar Handout · pathway to 2020 Energy sector decarbonisation actions are not solely driven by emissions goals Power sector decarbonisation is particularly critical in

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Page 1: RIETI BBL Seminar Handout · pathway to 2020 Energy sector decarbonisation actions are not solely driven by emissions goals Power sector decarbonisation is particularly critical in

RIETI BBL Seminar

Handout

Speakers:Mr. Didier HOUSSIN & Mr. HATTORI Takashi

http://www.rieti.go.jp/jp/index.html

October 7, 2014

Research Institute of Economy, Trade and Industry (RIETI)

Page 2: RIETI BBL Seminar Handout · pathway to 2020 Energy sector decarbonisation actions are not solely driven by emissions goals Power sector decarbonisation is particularly critical in

© OECD/IEA 2014© OECD/IEA 2014

Energy, Climate Change and Environment:2014 Insights

Didier HoussinDirector, Sustainable Policy and Technology Directorate, IEA

Takashi HattoriHead, Environment and Climate Change Unit, IEA

7 October 2014

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© OECD/IEA 2014

IEA publication series

Page 4: RIETI BBL Seminar Handout · pathway to 2020 Energy sector decarbonisation actions are not solely driven by emissions goals Power sector decarbonisation is particularly critical in

© OECD/IEA 2014

Goes deeper into selected technical issues

Each year chooses a special thematic focus

Presents regional energy and emissions data

Page 5: RIETI BBL Seminar Handout · pathway to 2020 Energy sector decarbonisation actions are not solely driven by emissions goals Power sector decarbonisation is particularly critical in

© OECD/IEA 2014

0

200

400

600

800

1000

1200

0

20

40

60

80

100

120

1970 1980 1990 2000 2010 2020 2030 2040 2050

Total prim

ary en

ergy dem

and (EJ)

CO2em

ission

s (Gt C

O2)

ESCII (2011=100)

Historical Projected

ESCII

Energy demand

CO2

Global energy demand, energy CO2, and ESCII (CO2 intensity of global energy supply) in the 6DS scenario

The emissions context

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© OECD/IEA 2014©OECD/IEA 2014

Near‐term ImpactsLonger‐term Needs

Getting to the 2DS will rely heavily on energy efficiency and renewables initially, but all technologies play a role.

The emissions challenge

Page 7: RIETI BBL Seminar Handout · pathway to 2020 Energy sector decarbonisation actions are not solely driven by emissions goals Power sector decarbonisation is particularly critical in

© OECD/IEA 2014

Different energy futures…

The 2DS will require energy conservation and also significant transformation of the global energy mix.

 0

 200

 400

 600

 800

1 000

6DS 2DS

2011 2050

Total Prim

ary En

ergy Sup

ply (EJ)

Coal

Oil

Natural gas

Nuclear

Otherrenewables

Hydro

Biomass andwaste

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© OECD/IEA 2014

0

20

40

60

80

100

120

1970 1980 1990 2000 2010 2020 2030 2040 2050

ESCII (10

0 = 2010

 carbo

n intensity) 6oC

4oC

2oC

The carbon intensity of energy supply will need to decrease rapidly in the future. 

A cleaner energy mix

Page 9: RIETI BBL Seminar Handout · pathway to 2020 Energy sector decarbonisation actions are not solely driven by emissions goals Power sector decarbonisation is particularly critical in

© OECD/IEA 2014

14 months to Paris

JAN   FEB   MAR    APR    MAY   JUN    JUL   AUG   SEP   OCT    NOV    DEC

INDCs by Q1 2015

Negotiating text fixed for translation June 

UNFCCC session

COP 21

CCXGWEO Special Climate Report

CCXG

Energy, Climate Change and Environment 2015

IEA

ETP 2015

OCT   NOV    DEC

COP 20ADP negotiatingsession

Energy, Climate Change and Environment 2014

IPCC synthesis report

COP 20 activities

COP 21activities

Page 10: RIETI BBL Seminar Handout · pathway to 2020 Energy sector decarbonisation actions are not solely driven by emissions goals Power sector decarbonisation is particularly critical in

© OECD/IEA 2014

Short term action pays off: emissions can be kept on a 2C pathway to 2020

Energy sector decarbonisation actions are not solely driven by emissions goals

Power sector decarbonisation is particularly critical in the period 2020 to 2030

Action on investment and technology is needed now to set the conditions for long‐term energy sector transition

The energy sector needs to prepare for the impacts of climate change 

IEA messages for COP 20 in Lima

Page 11: RIETI BBL Seminar Handout · pathway to 2020 Energy sector decarbonisation actions are not solely driven by emissions goals Power sector decarbonisation is particularly critical in

© OECD/IEA 2014

Policies and actions to “unlock” existing high‐emissions assets

The new landscape of emissions trading systems

Energy metrics: A useful tool for tracking decarbonisation progress

The air pollution‐GHG emissions nexus: implications for the energy sector (this year’s special focus)

Trends in energy and emissions data

Outline of ECCE: 2014 Insights

Page 12: RIETI BBL Seminar Handout · pathway to 2020 Energy sector decarbonisation actions are not solely driven by emissions goals Power sector decarbonisation is particularly critical in

© OECD/IEA 2014

Chapter 1:Policies and actions to “unlock” 

high‐emissions assets

Page 13: RIETI BBL Seminar Handout · pathway to 2020 Energy sector decarbonisation actions are not solely driven by emissions goals Power sector decarbonisation is particularly critical in

© OECD/IEA 2014

Power generation

Industry

Transport

Other

Room to manoeuvre

5

10

15

20

25

30

2011 2015 2020 2025 2030 2035

Gt

2 °C trajectory

Lock‐in of existinginfrastructure

2017

Planned fossil fuel infrastructure through 2017 will generate all energy emissions under 2DS through 2035

35

“Lock‐in” of 2 degree emissions

Page 14: RIETI BBL Seminar Handout · pathway to 2020 Energy sector decarbonisation actions are not solely driven by emissions goals Power sector decarbonisation is particularly critical in

© OECD/IEA 2014

Unlocking action

Policy Options

Direct regulations Supply/demand balances Price

Retirement of coal plant

‐ ownership decision ‐ lifetime limits‐ phase‐out 

‐ fleet‐wide emissions performance standard‐ Renewables regulation‐ demand reductions 

‐ fuel tax changes‐ carbon pricing‐ preferential renewables tariffs

Change dispatch of existing power plant fleet

‐ “clean‐first” dispatch ‐ priority dispatch of renewables

‐ fleet‐wide emissions performance standard 

‐ fuel tax changescarbon pricing‐ removal of fossil fuel subsidies

Efficiency retrofit of coal plant 

‐ targets for plant retrofit rates

‐ fleet‐wide emissions performance standard 

‐ carbon pricing‐ removal of fossil fuel subsidies

Retrofit of coal plant for CCS

‐ regulated lifetime limits‐ CCS mandates

‐ CCS trading schemes‐ fleet‐wide  emissions performance standard 

‐ carbon pricing‐ preferential tariffsfor CCS generation 

“Un‐locking” high emission assets

Page 15: RIETI BBL Seminar Handout · pathway to 2020 Energy sector decarbonisation actions are not solely driven by emissions goals Power sector decarbonisation is particularly critical in

© OECD/IEA 2014

The energy trilemma

Energy

Secure

Affordable Sustainable

Page 16: RIETI BBL Seminar Handout · pathway to 2020 Energy sector decarbonisation actions are not solely driven by emissions goals Power sector decarbonisation is particularly critical in

© OECD/IEA 2014

Chapter 2:The new landscape of emissions 

trading systems

Page 17: RIETI BBL Seminar Handout · pathway to 2020 Energy sector decarbonisation actions are not solely driven by emissions goals Power sector decarbonisation is particularly critical in

© OECD/IEA 2014

Current status of ETSs worldwide 

Page 18: RIETI BBL Seminar Handout · pathway to 2020 Energy sector decarbonisation actions are not solely driven by emissions goals Power sector decarbonisation is particularly critical in

© OECD/IEA 2014

Key issues include: 

The challenges of implementing an ETS in energy systems of a more regulated nature

The need to understand and address the impact of carbon prices on electricity prices

The importance of incorporating policy flexibility to respond to external influences such as other energy and climate policies

Interaction between ETSs and the energy sector 

Page 19: RIETI BBL Seminar Handout · pathway to 2020 Energy sector decarbonisation actions are not solely driven by emissions goals Power sector decarbonisation is particularly critical in

© OECD/IEA 2014

Some conclusions from recent ETS experience

ETSs may be implemented in highly regulated electricity systems, though additional measures may be needed to ensure propagation of the carbon price signal.

Compensating those groups affected by rising electricity prices (driven by the carbon price) may achieve better outcomes than preventing the price rise.

Improved integration of ETSs and complementary energy policies can ensure each set of policies meets its their respective objectives. 

Page 20: RIETI BBL Seminar Handout · pathway to 2020 Energy sector decarbonisation actions are not solely driven by emissions goals Power sector decarbonisation is particularly critical in

© OECD/IEA 2014

Chapter 3:Metrics for tracking progress in energy 

sector decarbonisation

Page 21: RIETI BBL Seminar Handout · pathway to 2020 Energy sector decarbonisation actions are not solely driven by emissions goals Power sector decarbonisation is particularly critical in

© OECD/IEA 2014

Other criteria can drive energy sector actions

Energy Sector Actions GHG targets

Are critical for achieving

Are not the only (or primary) driver of 

Other criteria: e.g.,air quality

road congestion

Page 22: RIETI BBL Seminar Handout · pathway to 2020 Energy sector decarbonisation actions are not solely driven by emissions goals Power sector decarbonisation is particularly critical in

© OECD/IEA 2014

Typology of metrics

GHG goals

Non‐ GHG goalsSHORT‐TERM

LONG‐TERM

Type I metrics• Total annual GHG emissions• GHG per unit of GDP• GHG per unit of energy supply

Type II metrics• Energy efficiency• Renewable energy • Low‐carbon energy deployment 

goals

Type III metrics• Tracking R&D of key 

technologies• Emissions intensity of new 

electricity investment 

Page 23: RIETI BBL Seminar Handout · pathway to 2020 Energy sector decarbonisation actions are not solely driven by emissions goals Power sector decarbonisation is particularly critical in

© OECD/IEA 2014

Type I and Type III metrics for the electricity sector

To achieve the 2DS, the average emissions intensity of new generation must be lower than that of natural gas before 2020, and only 10% of today’s levels after 2020.

0

100

200

300

400

500

600

700

1990 2000 2010 2020 2030 2040 2050

Emiss

ions I

ntensity

(gCO

2/kW

h)

6DS newbuild4DS newbuild2DS newbuild 6DS Average

4DS Average

2DS Average

Historical

Page 24: RIETI BBL Seminar Handout · pathway to 2020 Energy sector decarbonisation actions are not solely driven by emissions goals Power sector decarbonisation is particularly critical in

© OECD/IEA 2014

Chapter 4:The air pollution‐GHG emissions nexus: 

Implications for the energy sector

Page 25: RIETI BBL Seminar Handout · pathway to 2020 Energy sector decarbonisation actions are not solely driven by emissions goals Power sector decarbonisation is particularly critical in

© OECD/IEA 2014

Concerns about local air quality are rising

Page 26: RIETI BBL Seminar Handout · pathway to 2020 Energy sector decarbonisation actions are not solely driven by emissions goals Power sector decarbonisation is particularly critical in

© OECD/IEA 2014

Air pollution control and GHG emissions linkages

GHG abatement

Energy

Climate Change

Air Quality

Public healthbenefits

Page 27: RIETI BBL Seminar Handout · pathway to 2020 Energy sector decarbonisation actions are not solely driven by emissions goals Power sector decarbonisation is particularly critical in

© OECD/IEA 2014

Individual sections examine:

GHG co‐benefits of air quality controls of large stationary sources

China’s air quality constraints: Implications for GHG mitigation in power and key industry sectors

The regulatory approach to climate policy in the United States

The air pollution‐GHG emissions nexus

Page 28: RIETI BBL Seminar Handout · pathway to 2020 Energy sector decarbonisation actions are not solely driven by emissions goals Power sector decarbonisation is particularly critical in

© OECD/IEA 2014

Air pollutants controlled • SO2 • NOx • Primary PM/black carbon • CO • 

Hg (mercury)

Plant‐level compliance options• Retrofit for pollution control • Improve operating efficiency• Fuel switching• Plant closure

Impacts on other pollutants• GHG emissions co‐benefits

Plant‐level compliance options and impacts on GHG emissions

Page 29: RIETI BBL Seminar Handout · pathway to 2020 Energy sector decarbonisation actions are not solely driven by emissions goals Power sector decarbonisation is particularly critical in

© OECD/IEA 2014

Regional experience

Canada Air quality regulation and multi‐pollutant 

objectives  Caps on mercury emissions for each province

United States Cross‐State Air Pollution Rule (CSAPR) or “Transport Rule” Mercury and Air Toxics Standards (MATS) 

European Union Large Combustion Plant (LCP) Directive  Integrated Pollution Prevention and Control (IPPC) 

Directive

Page 30: RIETI BBL Seminar Handout · pathway to 2020 Energy sector decarbonisation actions are not solely driven by emissions goals Power sector decarbonisation is particularly critical in

© OECD/IEA 2014

Japan has some of the cleanest and most efficient coal plants in the world, and most are installed with flue gas technologies for SO2 and NOx. 

South Korea  is gradually moving towards a more efficient power fleet by upgrading and replacing the existing plants with the new and more efficient ones. 

China currently has the fastest installation rate of flue‐gas desulphurisation (FGD) and selective catalytic reduction (SCR) anywhere in the world. 

East Asia

Page 31: RIETI BBL Seminar Handout · pathway to 2020 Energy sector decarbonisation actions are not solely driven by emissions goals Power sector decarbonisation is particularly critical in

© OECD/IEA 2014

Importance of multi‐pollutant approach

Reduction in pollutant emissions

Ozone Sulphate PM2.5 Acid deposition

Mercury CO2

/global warming

SO2

 

 

NOx

 

 

Primary PM – black C

CO

 

Hg

 

CO2

 

 

 

 

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© OECD/IEA 2014

Heavily industrialised growth model => air quality concerns in major urban areas

Short‐term measures: Beijing Olympics (2008) Shanghai World Expo (2010)

Severe air pollution episodes e.g., Beijing in January 2013

China case study

Page 33: RIETI BBL Seminar Handout · pathway to 2020 Energy sector decarbonisation actions are not solely driven by emissions goals Power sector decarbonisation is particularly critical in

© OECD/IEA 2014

Five‐Year Plans  Pollution control mandates Closure of small, inefficient power plants  Energy/carbon intensity targets

“War on Pollution” policies PM2.5, PM10

Air Pollution Prevention and Control Action Plan PM, SOx, NOx Coal cap policies Additional forced retirements

China: key national pollution control regulations

Page 34: RIETI BBL Seminar Handout · pathway to 2020 Energy sector decarbonisation actions are not solely driven by emissions goals Power sector decarbonisation is particularly critical in

© OECD/IEA 2014

Keep coal use below 65% of TPES by 2015

Cap coal consumption at 10 Mt by 2017 (a 13 Mt reduction)

Reduce power capacity by one‐third 

Ban construction of new oil refining, steel, cement and thermal power plants

Reduce cement production by 50%

Upgrade 300 polluting firms in 2014

Regional measures: Beijing

Page 35: RIETI BBL Seminar Handout · pathway to 2020 Energy sector decarbonisation actions are not solely driven by emissions goals Power sector decarbonisation is particularly critical in

© OECD/IEA 2014

China’s air pollution controls can lead to significant GHG reductions, provided that they are structured to achieve these dual objectives

Areas for consideration:

‐ Emissions shifting to unregulated/remote regions

‐ Ambitious syngas developments are significantly  more energy‐ and carbon‐intensive

Continued improvement of air quality statistics, accounting, and enforcement measures will be needed  

Some strategic considerations

Page 36: RIETI BBL Seminar Handout · pathway to 2020 Energy sector decarbonisation actions are not solely driven by emissions goals Power sector decarbonisation is particularly critical in

© OECD/IEA 2014

The emerging contours of the US regulatory approach

Electric power

Industry

Transportation

Page 37: RIETI BBL Seminar Handout · pathway to 2020 Energy sector decarbonisation actions are not solely driven by emissions goals Power sector decarbonisation is particularly critical in

© OECD/IEA 2014

GHG standards for new power plants

Uniform national standards for coal and gas

Coal units would need CCS; NGCC meets the standard already

GHG standards for existing power plants

State‐specific carbon intensity goals

Projected to reduce emissions by 30% in 2030 relative to 2005

Built around the application of four “building blocks”

Will allow use of market mechanisms such as cap‐and trade

Regulating GHGs from electric power plants 

Page 38: RIETI BBL Seminar Handout · pathway to 2020 Energy sector decarbonisation actions are not solely driven by emissions goals Power sector decarbonisation is particularly critical in

© OECD/IEA 2014

Some quick take‐aways from the U.S. GHG regulations  

Standards for new power plants are likely to have little effect on US GHG emissions

By 2020, power sector emissions will already have declined 13% since 2005; thus, standards expected to reduce emissions an additional 17% over the following decade

In 2030, natural gas would be the dominant fuel (33%), but coal would still produce a significant share of electricity (31%)  

CO2 intensity of US electricity generation projected to fall 19% from its 2012 fleet‐wide rate, i.e. to that of typical NGCC plant

Mobile source rules for new cars and trucks are also important and may yield more reductions by 2030

Page 39: RIETI BBL Seminar Handout · pathway to 2020 Energy sector decarbonisation actions are not solely driven by emissions goals Power sector decarbonisation is particularly critical in

© OECD/IEA 2014

Non‐CO2 benefits are significant

$93 billion

$55 billion

Page 40: RIETI BBL Seminar Handout · pathway to 2020 Energy sector decarbonisation actions are not solely driven by emissions goals Power sector decarbonisation is particularly critical in

© OECD/IEA 2014

Chapter 5:Data: Energy and Emissions Data

Page 41: RIETI BBL Seminar Handout · pathway to 2020 Energy sector decarbonisation actions are not solely driven by emissions goals Power sector decarbonisation is particularly critical in

© OECD/IEA 2014

Selected indicators

Regional coverage

World OECD Americas  OECD Asia Oceania  OECD Europe  Africa  Non‐OECD Americas  Middle East  Non‐OECD Europe and Eurasia  Asia (excluding China and India)  China  India

0

5000

10000

15000

20000

25000

30000

35000

1971 1981 1991 2001 2012

milli

on to

nnes

of C

O 2

Electricity and heat Other energy ind. own use Manuf. ind. and construction Transport Residential Other

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

1990 2012

0

5000

10000

15000

20000

25000

30000

35000

1971 1976 1981 1986 1991 1996 2001 2006 2012

milli

on to

nnes

of C

O 2

Coal/peat Oil Gas Other

60

80

100

120

140

160

1990 1993 1996 1999 2002 2005 2008 2012

1990 = 100

CO2 emissions PopulationGDP/population CO2/TPES (ESCII)CO2/GDP

Page 42: RIETI BBL Seminar Handout · pathway to 2020 Energy sector decarbonisation actions are not solely driven by emissions goals Power sector decarbonisation is particularly critical in

© OECD/IEA 2014

Policies and actions to “unlock” existing high‐emissions assets

The new landscape of emissions trading systems

Energy metrics: A useful tool for tracking decarbonisation progress

The air pollution‐GHG emissions nexus: Implications for the energy sector (this year’s special focus)

Trends in energy and emissions data

Outline of 2014 edition

Page 43: RIETI BBL Seminar Handout · pathway to 2020 Energy sector decarbonisation actions are not solely driven by emissions goals Power sector decarbonisation is particularly critical in

© OECD/IEA 2014

Short term action pays off: emissions can be kept on a 2C pathway to 2020

Energy sector decarbonisation actions are not solely driven by emissions goals

Power sector decarbonisation is particularly critical in the period 2020 to 2030

Action is needed now to set the conditions for long‐term energy sector transition

The energy sector needs to prepare for the impacts of climate change 

IEA messages for COP 20 in Lima

Page 44: RIETI BBL Seminar Handout · pathway to 2020 Energy sector decarbonisation actions are not solely driven by emissions goals Power sector decarbonisation is particularly critical in

© OECD/IEA 2014

Thank you

ありがとう