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Assessing the energy and emission reduction potentials in the UK industry sector in the scope of an energy systems analysis Birgit Fais, Nagore Sabio, Neil Strachan UCL Energy Institute, University College London 37th IAEE International Conference New York, June 16, 2014 Agenda 1. Introduction and objective 2. Model and methodological approach 3. Comparative scenario analysis on the UK energy system 4. Conclusion UK industry sector modelling Birgit Fais 2 1. Introduction and objective UK climate policy • Climate Change Act (2008): legally binding framework for the abatement of greenhouse gas emissions committing the country to an emission reduction of 80 % until 2050 compared to the level in 1990 • In line with the EU Energy Efficiency Directive: indicative national energy efficiency target of an 18 % reduction in final energy consumption for 2020 compared to the UK’s 2007 BAU projection for 2020 UK industry sector • Accounts for slightly more than a quarter of total greenhouse gas emissions and almost a fifth of final energy consumption • Dual challenge of implementing low energy and low carbon technologies while at the same time maintaining international competitiveness UK industry sector modelling Birgit Fais 3 Motivation and objective for this analysis Low-carbon systems analysis often focuses on the evaluation of the mitigation potentials on the energy supply side, but substantial contribution is required from the different energy end-use sectors if the ambitious longterm targets are to be fulfilled. Bottom-up energy system models constitute powerful tools to analyse longterm emission reduction pathways in a systematic manner with the advantages of including a high level of technological detail and accounting for all interactions within the energy system. BUT: due to the complexity of the industry sector, its representation in energy system models is often strongly simplified without including the actual production processes and accounting for the substantial differences between subsectors. OBJECTIVE: develop a new, process-oriented modelling approach for the industry sector in energy system models based on process level data from a bottom-up industrial energy database and apply it in a scenario analysis for the UK energy system UK industry sector modelling Birgit Fais 4 2. Model and methodological approach UKTM – The UK TIMES energy system model • Bottom-up integrated energy system model → technology-rich, dynamic, linear programming optimisation, partial equilibrium model • Representation of the entire UK energy system with detailed description of the demand sectors (industry, residential, tertiary, agriculture and transport), public & industrial electricity and heat production, refineries and other fuel conversion • Successor to UK MARKAL • New features: flexible modelling of storage and other energy infrastructures, representation of non-CO2 greenhouse gases, Non-energy mitigation options, new time slices (4 intra-day x 4 seasonal) • Open source modelling: Transparency at the forefront of development (data, assumptions, structure is clear and traceable, full replicability of results, comprehensive QA processes) UK industry sector modelling Birgit Fais 5 Modelling the industry sector in energy system models Traditional approach: aggregated service demand module Relatively simple model structure based on the different types of industrial energy service demands (e.g. high temp. heat, motor drive, drying, etc.) Shortcomings The actual process technologies in the various industry subsectors are usually not explicitly modelled → important technological constraints can often not be accounted for → radical technological changes in the production processes (e.g. CCS technologies) cannot be included → difficult to consider process emissions and mitigation options for these emissions. UK industry sector modelling Birgit Fais 6 New approach: disaggregated hybrid module Based on the Usable Energy Database (UED) (Griffin et al., 2013): baseline energy use and emissions by technology in 2010 and a wide range of possible future technologies for a number of energy-intensive industry sectors in the UK. Structure of the new industry sector in UKTM IIS ICM IPP Iron & steel Cement Pulp & paper ICH Chemicals IFD INF INM IOI Food & Drink Non-ferrous metals Other non-metallic mineral products Others Modelled in a process-oriented manner based on the structure given in the Usable Energy Database; demand commodities are specified as physical goods Olefins and ammonia are separated and modelled processoriented, the rest of the sector is modelled based on energy Modelled based on energy service demands : high temperature processes, low temperature processes, drying/separation, motor drive, refrigeration, and others Technology choices in the process-oriented sectors (1) exploitation of already commercial technology options with higher energy efficiency or less carbon-intensive energy inputs; (2) improvement potentials for already installed process technologies; (3) more radical process changes. UK industry sector modelling Birgit Fais 7 Example: Cement industry Fuels Limestone Dummy Clinker before precalciner Dummy Clinker CCS retrofit Clinker Electricity GGBFS Cement Semi-wet kiln, exist. Semi-dry kiln, exist. Dry kiln with precalciner, exist. Dry kiln w/o precalciner, exist. Precalciner, new Grinding and mixing, exist. Dry kiln, BAT Fluidised bed kiln BAT kiln with increased waste utilisation Fluidised bed kiln with increased waste utilisation BAT kiln with MEA Postcombustion CCS Legend Existing technologies New, Energy efficiency options New, fuel switching options New, CCS options Grinding & mixing, clinker substitution option BAT kiln with KS-1 Postcombustion CCS BAT kiln with Partial Oxycombustion CCS MEA Post-combustion CCS retrofit KS-1 Post-combustion CCS retrofit Partial Oxy-combustion CCS retrofit Cement substition option Grinding and mixing, new UK industry sector modelling Grinding and mixing with increased clinker substituion Birgit Fais Low CO2 cements 8 3. Comparative scenario analysis Objective: assess the contribution of the UK industry sector to emission and energy demand reduction targets Scenario REF GHG80 GHG80_FEC Description Business as usual reflecting the current policy framework REF + emission reduction target of 80 % until 2050 compared to 1990 GHG80 + reduction in final energy consumption of 1.5% per year until 2020, of 1% per year until 2040 and 0.5% per year until 2050 Basic scenario assumptions (2010-2050): • GDP growth rate of 2.4% p.a. • Population growth of 0.5% p.a. • Rise in the world market price for crude oil of 73% (in real terms) UK industry sector modelling Birgit Fais 9 / 19 Final energy consumption [PJ] Results (1): Industrial energy consumption • Reduction in energy consumption already in REF due to decline in production, the shift to high value, less energy-intensive subsectors, use of profitable energy efficiency options (rising fossil fuel prices!) • No additional reduction in GHG80: stronger emphasis on energy efficiency measures but balancing effect due to use of CCS, industry CHP and biomass options • Strong additional emphasis on energy efficiency in GHG80_FEC and less use of CCS, biomass and CHP options UK industry sector modelling Birgit Fais 10 / 19 Fuel consumption [PJ] Results (2): Fuel consumption in industry CHP plants • Contribution of CHP drops significantly in REF due to the availability of cheap electricity from the public generation sector • In low-carbon scenario GHG80, use of biomass in CHP plants is a viable emission abatement option. • Specification of energy efficiency target (on final energy consumption) leads to considerable decline in industry CHP generation in GHG80_FEC UK industry sector modelling Birgit Fais 11 Results (3): Contribution to energy efficiency • Increase of final energy consumption of 8% between 2010 and 2050 in REF, reductions only realized in the industry sector • Reduction of 8% in GHG80, electrification and uptake of conservation measures in residential and tertiary sector; strongest reductions still in industry • Additional efforts to improve energy efficiency needed in GHG80_FEC, industry leads reduction of final energy consumption with -38% between 2010 and 2050 UK industry sector modelling Birgit Fais 12 2015 GHG80_FEC GHG80 REF GHG80_FEC 2040 GHG80 GHG80_FEC GHG80 GHG80_FEC GHG80_FEC REF REF GHG80 GHG80 REF GHG80 2015 REF REF REF REF GHG80 GHG80 GHG80_FEC GHG80_FEC REF GHG80_FEC GHG80 GHG80_FEC GHG80 2030 GHG80 2010 2020 REF GHG80_FEC Processing & Upstream Services Transport* GHG80 REF GHG80_FEC GHG80 REF 2015 2015 Processing & Upstream Services 2020 2030 Transport* Electricity Industry Non-energy use REF REF GHG80_FEC GHG80 REF 2010 700 600 500 400 300 200 100 0 -100 2010 GHG emissions [Mt CO2eq] Results (4): Greenhouse gas emissions GHG80 GHG80 GHG80_FEC GHG80_FEC 2010 0 -100 REF 300 200 100 0 -100 GH GHG emissio GHG emissions [Mt CO 600 500 400 300 200 100 0 -100 Processing & Upstream Services 2020 2030 Transport* Electricity Industry 2040 2050 Non-energy use Agriculture Residential 2020 Ele Ind 20 No Ag Re * inclu * including int. aviation & shipping 2050 • HighestProcessing contribution to emission reduction until 2050 from electricity generation & Upstream Electricity Agriculture Residential (-100%),Services followed by service Industry sector (-73%) and industry (-68%) * Transport Non-energy use * including int. aviation & shipping • CCS technologies (used in blast furnaces, cement kilns and steam reforming) particularly important for the reduction of process related emissions • Contribution of the industry sector to emission reduction is reduced considerably with the implementation of the energy efficiency target • Additional energy efficiency target has dampening effect on GHG emission price UK industry sector modelling Birgit Fais 13 Results (5): Energy system costs Difference in annual undiscounted energy system cost 2020 2030 2050 Cumulated 2010-2050 [Bn £2010] GHG80 vs. REF 0.2% 1.5% 7.5% 489.4 GHG80_FEC vs. REF 1.8% 3.3% 13.5% 906.0 GHG80_FEC vs. GHG80 1.5% 1.8% 5.6% 416.6 • Consistent manner of assessing the additional energy system-wide cost burden caused by the introduction of ambitious emission and energy reduction targets • The transition to a low-carbon energy system in the UK causes additional costs to the energy system of almost £500 billion cumulated over the period from 2010 and 2050. • Implementing an additional target on energy efficiency can distort the cost efficient pathway of reaching the desired emission reductions. UK industry sector modelling Birgit Fais 14 100 80 60 40 20 UK industry sector modelling Birgit Fais REF GHG80 GHG80_FEC REF GHG80 GHG80_FEC 2020 2030 2040 Biomass and waste Electricity Hydrogen Coal Natural Gas Oil Products REF GHG80 GHG80_FEC REF GHG80 GHG80_FEC 0 2050 2040 2020 2030 2050 2040 2050 Biomass and waste Natural Coal Gas Electricity Electricity Natural Gas Manufactured Process by-products Hydrogen fuels Oil Products Coal Coal Natural Gas Oil Products Oil Products Paper 120 2010 Final energy consumption [PJ] Biomass and and biofuels Biomass waste Electricity Hydrogen Hydrogen 2030 REF GHG80 GHG80_FEC 2050 Chemicals 250 200 150 100 50 0 2020 2030 2040 Biomass and waste Electricity Hydrogen Coal Natural Gas Oil Products REF GHG80 GHG80_FEC REF GHG80 REF GHG80_FEC 2020 2040 REF GHG80 GHG80_FEC GHG80 REF GHG80 GHG80_FEC GHG80_FEC 2030 2020 REF GHG80 GHG80_FEC REF GHG80 GHG80_FEC REF REF GHG80 GHG80_FEC 2010 0 0 REF REF GHG80 GHG80 GHG80_FEC GHG80_FEC REF GHG80 GHG80_FEC REF REF GHG80 GHG80 GHG80_FEC GHG80_FEC 50 50 REF GHG80 GHG80_FEC 100 100 2010 150 150 2010 200 200 Cement 35 30 25 20 15 10 5 0 GHG80 Final energy consumption [PJ] GHG80_FEC Iron & steel Final energy consumption [PJ] 250 250 2010 Final energy consumption [PJ] Results (6): Sector-wise assessment 2050 15 4. Conclusions • A more detailed, process-oriented representation of the industry sector in a bottom-up energy system model can help to evaluate the contribution of this sector to long-term energy and emission reduction targets. • The main emission reduction options in the UK industry sector comprise energy efficiency measures, the use of biomass for heating, CCS technologies in the iron and steel, cement and chemical industry as well as applying some radical changes in the production processes of these sectors. • Interactions between the emission reduction target and additional targets for energy efficiency (or renewables) need to be taken into account as they might result in a distortion of the cost efficient emission reduction pathway. • Further methodological work is needed to (1) improve the representation of the less energy-intensive and highly heterogeneous industrial subsectors, (2) address the uncertainty in the technological parameters and (3) assess the effects of the transition to a low-carbon energy system on industrial production levels in the UK. UK industry sector modelling Birgit Fais 16 Thank you for your attention! Birgit Fais Research Associate UCL Energy Institute University College London Central House, 14 Upper Woburn Place London WC1H 0NN, United Kingdom Phone: +44 20 3108 5940 Email: [email protected] This analysis was part of the UKERC project “Industrial Energy Use from a Bottom-up Perspective” (http://www.ukerc.ac.uk/support/RF2IndustrialEnergyUse) UK industry sector modelling Birgit Fais 17 BACK UP UK industry sector modelling Birgit Fais 18 Demand projections for the industry sector in UKTM Iron and steel (hot rolled steel) Cement Paper and paper products Chemicals High value chemicals Ammonia Others Non-ferrous metals Other non-metallic minerals Food, drink and tobacco Other industries UK industry sector modelling Birgit Fais Output in 2010 [kt] 8415 9440 4564 3840 950 - 2010 1 1 1 1 1 1 1 1 1 1 2015 0.92 1.01 0.90 1.05 1.05 0.94 0.92 1.01 0.92 0.84 Demand driver, 2010 = 1 2020 2030 0.90 0.87 1.01 1.00 0.87 0.81 1.16 1.41 1.16 1.41 0.92 0.89 0.90 0.87 1.01 1.00 0.96 1.03 0.83 0.80 2040 0.83 0.97 0.75 1.72 1.72 0.87 0.83 0.97 1.11 0.78 2050 0.80 0.89 0.70 2.10 2.10 0.84 0.80 0.89 1.20 0.75 19