Gunnar Luderer

System LCOE: What are the Costs of Variable Renewables?

LCOE (levelized costs of electricity) are a common metric for comparing power generating technologies. However, there is criticism particularly towards evaluating variable renewables like wind and solar PV (photovoltaics) power based on LCOE because it ignores variability and integration costs. We propose a new metric System LCOE that accounts for integration and generation costs. For this purpose we develop a new mathematical definition of integration costs that directly relates to economic theory. As a result System LCOE allow the economic comparison of generating technologies and deriving optimal quantities in particular for VRE (variable renewable sources). To demonstrate the new concept we quantify System LCOE from a simple power system model and literature values. We find that at high wind shares integration costs can be in the same range as generation costs of wind power and conventional plants in particular due to a cost component “profile costs” captured by the new definition. Integration costs increase with growing wind shares and might become an economic barrier to deploying VRE at high shares. System LCOE help understanding and resolving the challenge of integrating VRE and can guide research and policy makers in realizing a cost-efficient transformation towards an energy system with potentially high shares of variable renewables.

Getting from here to there – energy technology transformation pathways in the EMF27 scenarios

Based on a large number of energy-economic and integrated assessment models, the Energy Modeling Forum (EMF) 27 study systematically explores the implications of technology cost and availability for feasibility and macroeconomic costs of energy system transformations toward climate stabilization. At the highest level, the technology strategy articulated in all the scenarios in EMF27 includes three elements: decarbonization of energy supply, increasing the use of low-carbon energy carriers in end-use, and reduction of energy use. The way that the scenarios differ is in the degree to which these different elements of strategy are implemented, the timing of those implementations, and the associated macroeconomic costs. The study also discusses the value of individual technologies for achieving climate stabilization. A robust finding is that the unavailability of carbon capture and storage and limited availability of bioenergy have the largest impact on feasibility and macroeconomic costs for stabilizing atmospheric concentrations at low levels, mostly because of their combined ability to remove carbon from the atmosphere. Constraining options in the electric sector such as nuclear power, wind and solar energy in contrast has a much smaller impact on the cost of mitigation.

WHAT DOES THE 2 C TARGET IMPLY FOR A GLOBAL CLIMATE AGREEMENT IN 2020? THE LIMITS STUDY ON DURBAN PLATFORM SCENARIOS

This paper provides a novel and comprehensive model-based assessment of possible outcomes of the Durban Platform negotiations with a focus on emissions reduction requirements, the consistency with the 2°C target and global economic impacts. The Durban Platform scenarios investigated in the LIMITS study — all assuming the implementation of comprehensive global emission reductions after 2020, but assuming different 2020 emission reduction levels as well as different long-term concentration targets — exhibit a probability of exceeding the 2°C limit of 22–41% when reaching 450 (450–480) ppm CO2e, and 35–59% when reaching 500 (480–520) ppm CO2e in 2100. Forcing and temperature show a peak and decline pattern for both targets. Consistency of the resulting temperature trajectory with the 2°C target is a societal choice, and may be based on the maximum exceedance probability at the time of the peak and the long run exceedance probability, e.g., in the year 2100. The challenges of implementing a long-term target after a period of fragmented near-term climate policy can be significant as reflected in steep reductions of emissions intensity and transitional and long-term economic impacts. In particular, the challenges of adopting the target are significantly higher in 2030 than in 2020, both in terms of required emissions intensity decline rates and economic impacts. We conclude that an agreement on comprehensive emissions reductions to be implemented from 2020 onwards has particular significance for meeting long-term climate policy objectives.

Long-Term Transport Energy Demand and Climate Policy: Alternative Visions on Transport Decarbonization in Energy Economy Models

Decarbonizing transport will be necessary to limit global warming below 2 °C. Due to persistent reliance on fossil fuels, it is posited that transport is more difficult to decarbonize than other sectors. To test this hypothesis, we compare long-term transport energy demand and emission projections for China, USA and the world from five large-scale energy-economy models. We diagnose the models characteristics by subjecting them to three climate policies. We systematically analyze mitigation levers along the chain of causality from mobility to emissions, finding that some models lack relevant mitigation options. We partially confirm that transport is less reactive to a given carbon tax than the non-transport sectors: in the first half of the century, transport mitigation is delayed by 10–30 years compared to non-transport mitigation. At high carbon prices towards the end of the century, however, the three global models achieve deep transport emission reductions by >90% through the use of advanced vehicle technologies and low-carbon primary energy; especially biomass with CCS (carbon capture and sequestration) plays a crucial role. The extent to which earlier mitigation is possible strongly depends on implemented technologies and model structure. Compared to the global models, the two partial-equilibrium models are less flexible in their reaction to climate policies.

Is atmospheric carbon dioxide removal a game changer for climate change mitigation

The ability to directly remove carbon dioxide from the atmosphere allows the decoupling of emissions and emissions control in space and time. We ask the question whether this unique feature of carbon dioxide removal technologies fundamentally alters the dynamics of climate mitigation pathways. The analysis is performed in the coupled energy-economy-climate model ReMIND using the bioenergy with CCS route as an application of CDR technology. BECCS is arguably the least cost CDR option if biomass availability is not a strongly limiting factor. We compare mitigation pathways with and without BECCS to explore the impact of CDR technologies on the mitigation portfolio. Effects are most pronounced for stringent climate policies where BECCS is a key technology for the effectiveness of carbon pricing policies. The decoupling of emissions and emissions control allows prolonging the use of fossil fuels in sectors that are difficult to decarbonize, particularly in the transport sector. It also balances the distribution of mitigation costs across future generations. CDR is not a silver bullet technology. The largest part of emissions reductions continues to be provided by direct mitigation measures at the emissions source. The value of CDR lies in its flexibility to alleviate the most costly constraints on mitigating emissions.

The distribution of the major economies’ effort in the Durban platform scenarios

The feasibility of achieving climate stabilization consistent with the objective of 2°C is heavily influenced by how the effort in terms of mitigation and economic resources will be distributed among the major economies. This paper provides a multi-model quantification of the mitigation commitment in 10 major regions of the world for a diversity of allocation schemes. Our results indicate that a policy with uniform carbon pricing and no transfer payments would yield an uneven distribution of policy costs, which would be lower than the global average for OECD countries, higher for developing economies and the highest, for energy exporters. We show that a resource sharing scheme based on long-term convergence of per capita emissions would not resolve the issue of cost distribution. An effort sharing scheme which equalizes regional policy costs would yield an allocation of allowances comparable with the ones proposed by the Major Economies. Under such a scheme, emissions would peak between 2030 and 2045 for China and remain rather flat for India. In all cases, a very large international carbon market would be required.

The value of bioenergy in low stabilization scenarios: an assessment using REMIND-MAgPIE

This study investigates the use of bioenergy for achieving stringent climate stabilization targets and it analyzes the economic drivers behind the choice of bioenergy technologies. We apply the integrated assessment framework REMIND-MAgPIE to show that bioenergy, particularly if combined with carbon capture and storage (CCS) is a crucial mitigation option with high deployment levels and high technology value. If CCS is available, bioenergy is exclusively used with CCS. We find that the ability of bioenergy to provide negative emissions gives rise to a strong nexus between biomass prices and carbon prices. Ambitious climate policy could result in bioenergy prices of 70

Analyzing Major Challenges of Wind and Solar Variability in Power Systems

/GJ (or even 430

The value of technology and of its evolution towards a low carbon economy

/GJ if bioenergy potential is limited to 100 EJ/year), which indicates a strong demand for bioenergy. For low stabilization scenarios with BECCS availability, we find that the carbon value of biomass tends to exceed its pure energy value. Therefore, the driving factor behind investments into bioenergy conversion capacities for electricity and hydrogen production are the revenues generated from negative emissions, rather than from energy production. However, in REMIND modern bioenergy is predominantly used to produce low-carbon fuels, since the transport sector has significantly fewer low-carbon alternatives to biofuels than the power sector. Since negative emissions increase the amount of permissible emissions from fossil fuels, given a climate target, bioenergy acts as a complement to fossils rather than a substitute. This makes the short-term and long-term deployment of fossil fuels dependent on the long-term availability of BECCS.

Economics of nuclear power and climate change mitigation policies.

Ambitious policy targets together with current and projected high growth rates indicate that future power systems will likely show substantially increased generation from renewable energy sources. A large share will come from the variable renewable energy (VRE) sources wind and solar photovoltaics (PV); however, integrating wind and solar causes challenges for existing power systems. In this paper we analyze three major integration challenges related to the structural matching of demand with the supply of wind and solar power: low capacity credit, reduced utilization of dispatchable plants, and over-produced generation. Based on residual load duration curves we define corresponding challenge variables and estimate their dependence on region (US Indiana and Germany), penetration and mix of wind and solar generation. Results show that the impacts of increasing wind and solar shares can become substantial, and increase with penetration, independently of mix and region. Solar PV at low penetrations is much easier to integrate in many areas of the US than in Germany; however, some impacts (e.g. over-production) increase significantly with higher shares. For wind power, the impacts increase rather moderately and are fairly similar in US Indiana and Germany.