Brigitte Knopf

Carpe Diem: A Novel Approach to Select Representative Days for Long-Term Power System Models with High Shares of Renewable Energy Sources

In order to explore scenarios on the future of power systems, a variety of numerical models have been developed. As the share of variable renewable energy sources, particularly wind and solar, is projected to significantly increase, accounting for their temporal and spatial variability becomes ever more important in developing sound long-term scenarios. Computational restrictions prevent many long-term power system models being developed with an hourly resolution; instead they use time slices that aggregate periods with similar load and renewable electricity generation levels. There is to date no reproducible and validated method to derive and select time slices for power system models with multiple fluctuating time series. In this paper, we present a novel and effective method that is easily applied to input data for all kinds of power system models. We utilize this procedure in the long-term power system model LIMES-EU and show that a small number of representative days developed in this way are sufficient to reflect the characteristic fluctuations of the input data. Alongside a validation of the method, we discuss the conditions under which seasonal differentiation, and the use of representative weeks instead of days, is necessary.

Quantifying the long-term economic benefits of European electricity system integration

This paper analyses a set of model�?based decarbonization scenarios in order to quantify the long�?term economic benefits that arise from an increasing integration of the pan�?European electricity system. It thereby focuses on the interplay between transmission infrastructure and renewable generation capacity expansion. We confirm earlier findings that, on aggregate, pan�?European transmission capacity expansion constitutes a no�?regret option for integrating increasing shares of variable renewables in mitigation scenarios with positive social returns on investment. However, it turns out that the change in total discounted system costs that occurs as transmission capacity expansion increases is modest in magnitude, with a maximum of 3.5% for a case with no expansion compared to one with massive expansion. In technical terms this means that the optimum is rather flat and that taking into account regional and local benefits and distributional aspects, could alter the evaluation of the economic benefits considerably. A crucial finding in this context is that the configuration of pan�?European transmission infrastructure and the importance of specific country�?connections, i.e. a “Southern�? versus a “Northern�? solution, crucially hinges on the relative development of specific investment costs for solar and wind technologies over the next decades.

The 2°C Target Reconsidered

While the 2°C target has become an important reference point in the international climate-policy arena, as stated for example in the Copenhagen Accord in 2009, its scientific underpinning and its legitimacy is heavily debated in the scientific community. In this chapter, outstanding experts in the field, representing opposing viewpoints within the scientific community, present their view on the 2°C target. While Mike Hulme casts doubt on the usefulness of the very idea of a specific temperature target as guidance for mitigation policy, Claus Leggewie and Dirk Messner claim that the 2°C target has an important instrumental value in the discourse surrounding climate-related risks. We discuss both contributions and argue that climate stabilisation goals provide a useful framework for a consistent discussion of climate policy choices. We point out that the 2°C objective has two major merits: first, as a global climate stabilisation goal it provides a useful framework around which to structure the global climate policy debate. Second, we consider it an appropriate climate policy goal enabling currently available scientific knowledge to be combined with some explicit value judgements. Nevertheless, further research and public debate are required to reduce uncertainties and substantiate this conjecture.

Reaping the benefits of renewables in a nonoptimal world.

Positive and negative side effects of economic activities—“externalities” in the language of economists—are universal in the energy sector. Coal-fired power plants not only produce electricity, but also CO2, which contributes to global warming, and local air pollutants such as sulfur dioxide (SO2), which have adverse health effects on the population living downwind of the smoke stacks. The study by Siler-Evans et al. (1) analyzes the combined health, environmental, and climate benefits from solar and wind power and finds that these benefits feature strong regional variations. Crucially, they quantify the synergies between renewable energy policy and health and climate protection and demonstrate that they can be optimized if support schemes incorporate regional differences in benefits. The study is timely and provides insights into a number of ongoing scientific and policy debates not only in the United States but also in the European Union (EU) and other global regions. We explore these insights in the following analysis.

REMIND-D: A Hybrid Energy-Economy Model of Germany

This paper presents a detailed documentation of the hybrid energy-economy model REMIND-D. REMIND-D is a Ramsey-type growth model for Germany that integrates a detailed bottom-up energy system module, coupled by a hard link. The model provides a quantitative framework for analyzing long-term domestic CO2 emission reduction scenarios. Due to its hybrid nature, REMIND-D facilitates an integrated analysis of the interplay between technological mitigation options in the different sectors of the energy system as well as overall macroeconomic dynamics. REMIND-D is an intertemporal optimization model, featuring optimal annual mitigation effort and technology deployment as a model output. In order to provide transparency on model assumptions, this paper gives an overview of the model structure, the input data used to calibrate REMIND-D to the Federal Republic of Germany, as well as the techno-economic parameters of the technologies considered in the energy system module.

A Global Carbon Market and the Allocation of Emission Rights

Given that the 2°C target implies that a certain budget of emissions may be permitted, there is debate over how these emission rights could be allocated among the nations. The national emission reduction commitments and possible allocation rules of an emission budget play a major role in international negotiations. The idea prevails that these allocations will determine the distribution of the burden of climate protection. In this chapter we emphasise the importance of an international emission trading scheme (ETS). We also analyse a number of allocation schemes and their influence on regional mitigation costs based on an intertemporal general equilibrium model. Major differences can be discerned between the schemes pursuing the “allocation of emission rights” versus those based on “allocation of reduction efforts” relative to a baseline level. The allocation rule however, accounts for only some of the overall mitigation costs: the full assessment of these costs is much more complex, depending also on technological progress and the effect on trade of the devaluation of fossil resources resulting from emission restrictions. We evaluate the ethical presumptions and their implications on the assessment of the different allocation schemes in terms of justice. We also discuss the institutional requirements for a global cap and trade system.

From Targets to Action: Rolling up our Sleeves after Paris

At the United Nations Climate Change Conference in Paris in 2015 ambitious targets for responding to the threat of climate change have been set: limiting global temperature increase to “well below 2 °C […] and to pursue efforts to limit the temperature increase to 1.5 °C”. However, calculating the CO2 budget for 1.5 °C, it becomes clear that there is nearly no room left for future emissions. Scenarios suggest that negative emission technologies will play an even more important role for 1.5 °C than they already play for 2 °C. Especially against this background the feasibility of the target(s) is hotly debated, but this debate does not initiate the next steps that are urgently needed. Already the negotiations have featured the move from targets to implementation which is needed in the coming decade. Most importantly, there is an urgent need to develop and implement instruments that incentivize the rapid decarbonization. Moreover, it needs to be worked out how to link the climate and development agenda and prevent a buildup of coal power causing lock‐in effects. Short term entry points into climate policy should now be in the focus instead of the fruitless debate on the feasibility of targets.

The European Emissions Trading System (EU ETS): Ex-Post Analysis, the Market Stability Reserve and Options for a Comprehensive Reform

The central pillar of European climate policy, the European Emissions Trading System (EU ETS), is currently under scrutiny, as the allowance price is persistently low at around 5€/tCO2. The cap was met and emissions actually declined in recent years, ensuring the environmental effectiveness of the scheme. However, the low price may affect the long-term cost-effectiveness of the instrument by reducing the incentive for investment and deployment of low carbon technologies. No significant increase in the allowance price is expected before 2020, and probably not beyond, without reform. While the reasons for the price decline are controversial, empirical analysis shows that only a small portion of price fluctuations can be explained by factors such as the economic crisis, renewable deployment or international offsets. Therefore, it is likely that political factors and regulatory uncertainty have played a key role in the price decline. As a consequence, any reform of the EU ETS has to deliver a mechanism that reduces such uncertainty and stabilizes expectations of market participants. The Market Stability Reserve proposed by the EU Commission is unlikely to address the current problem of price uncertainty and insufficient dynamic efficiency. The key element of the alternative reform proposal described in this paper is to set a price collar in the EU ETS with lower and upper boundaries. This is likely to reinforce the long-term credibility and reliability of the price signal. In addition, a price for GHG emissions not covered by the EU ETS has to be set. If additional market failures prevent the market from functioning efficiently, specific policy instruments related to innovation and technology diffusion should be implemented in addition to carbon pricing. Carbon leakage could be addressed through tailor-made trade policies. In parallel, increasing the coalition of countries included in the carbon pricing should remain a priority. This reform package would bring the EU ETS back to life, while avoiding a relapse into potentially costly and inefficient national climate and energy policies.

Climate Change Mitigation: Options, Costs and Risks

Over the last few years political declarations by the European Union (EC (European Community), Climate change – Council conclusions 8518/96 (Presse 188-G) 25/26. VI.96, 1996), the G8 (Major Economics Forum, Declaration of the leaders of the major economies forum on energy and climate, MEF, 2009. http://www.g8italia2009.it/static/G8_Allegato/MEF_Declarationl.pdf) and in the Copenhagen Accord (UNFCCC, Draft decision -/CP.15: Proposal by the President. Conference of the Parties, Fifteenth session, Copenhagen, 2010. Retrieved July 6, 2010, from http://unfccc.int/resource/docs/2009/cop15/eng/l07.pdf) have referred to the 2°C target as a potential goal for climate protection. Such an objective is undoubtedly highly ambitious but has not been made a binding target under international law. The Copenhagen Accord also failed to address the willingness of nations to take the necessary measures to attain this target. If the 2°C target is to be pursued by policy-makers, a robust assessment by the scientific community of the side risks and benefits of achieving this mitigation target will be required. This includes the careful evaluation of different technology options and the associated costs of mitigation.

From Utopia to Common Sense: The Climate Mitigation Challenge

Climate Change Policies sheds light on the foundations, design and effects of climate change policies. Written by leading international experts in the field, this book deals with the various economic effects from climate change policies introduced at national and international levels. It also expertly describes actual applications of climate change policies in the main emitting countries. This insightful study includes chapters on public policies and climate change impacts, adaptation, mitigation, effects on competitiveness, new technologies, distributional concerns, and the international dimension.