Assessing energy security & macroeconomic feedback in national and global integrated energy systems models
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Date
2015
Authors
Glynn, James
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University College Cork
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Abstract
Ireland imports 88% of its energy requirements. Oil makes up 59% of total final energy consumption (TFC). Import dependency, low fuel diversity and volatile prices leave Ireland vulnerable in terms of energy security. The Supply/Demand Index, developed by the energy research centre of the Netherlands (ECN), has been used previously as a metric to assess Irish energy security. The method assesses both supply and demand side quantitative factors by sector, assigns expert opinion weights to these factors to allocate risk, and give a relative picture of energy security when compared to EU benchmarks. The thesis further develops this index in order to address a number of limitations and to develop further insights into energy security. Firstly, the update develops a time series dataset taking into account the most recent Irish Energy balance data from the International Energy Agency (IEA) and EUROSTAT, while economic-energy indicators are supplemented from the ODYSSEE database. Secondly, given Irelands reliance on the UK for the primary energy supply for refined oil products and natural gas, an appropriate restructuring of Irish primary energy supply risk is developed to account for the risk in UK chain of primary energy supply. This is deemed necessary given the shift in UK energy balance from net exporter to net importer of energy. Moving from energy index analysis to energy systems analysis, this thesis develops the first energy security scenarios for Ireland to 2050 using long term macroeconomic forecasts to 2050, with oil production and price scenarios from the International Monetary Fund (IMF), soft-linked to the Irish-TIMES energy systems model. The analysis focuses on developing a least cost optimum energy system for Ireland under scenarios of constrained oil supply from 2012 (0.8% annual import growth, and –2% annual import decline) and subsequent sustained long term price shocks to oil and gas imports. The results point to gas becoming the dominant fuel source for Ireland, at 54% total final energy consumption in 2020, supplanting oil from reference projections of 57% to 10.8% TFC. In 2012, the cost of net oil imports stood at €3.6 billion (2.26% GDP). The modelled high oil and gas price scenarios show an additional annual cost in comparison to a reference of between €2.9bn and €7.5bn IX by 2020 (1.9% - 4.9% of GDP) to choose to develop a least cost energy system. Investment and ramifications for Irish energy security are discussed. In a climate constrained future, hybrid energy-economy model coupling gives additional insight into interregional competition, trade, industrial delocalisation and overall macroeconomic consequences of decarbonising the energy system. Decarbonising the energy system is critical in mitigating climate change. This thesis summarises modelling methodologies developed in the International Energy Agency Energy Technology Systems Analysis Programme (IEA-ETSAP) community to assess economic impacts of decarbonising energy systems at global and national levels. The range of economic impacts is regionally dependent upon the stage of economic development, the level of industrialisation, energy intensity of exports, and competition effects due to rates of relative decarbonisation. Decarbonisation targets of developed nations are estimated to result in a manageable GDP loss in the region of 2% by 2050. Energy intensive export driven developing countries, such as China and India, and fossil fuel exporting nations can expect significantly higher GDP loss of up to 5% GDP by 2050. The approaches outlined within have guided the first evidence based decarbonisation legislation and continue to provide additional insights as increased sectoral disaggregation in hybrid modelling approaches is achieved. This thesis develops a general equilibrium feedback in technology rich integrated energy systems modes to equitable burden sharing rules for climate change mitigation at an Irish and Global scale. The IEA-ETSAP hybrid global Integrated Assessment Model TIAM-MACRO is used to investigate the efficient bottom-up energy system required to meet a 2°C limit target with 66% probability while optimising for consumer welfare. Least cost efficient 2°C scenario (2DS) emissions are compared alongside burden sharing rules, including contract and convergence equalisation of emissions per capita, equalisation of regional GDP loss, compensation for energy cost increases in Least Developed Countries (LDCs), full compensation for GDP loss in LDCs and two interpretations of the “Brazil Proposal” of historical cumulative responsibility for temperature forcing. X The results in this thesis for equal future emissions per capita challenge statements that this approach will aid emerging economies, mainly China and India. This thesis shows that China, India and developing Asia suffer increased economic losses using equal per capita burden sharing rules in comparison to the efficient least cost scenario. China fares best when the burden sharing rules focus on equalisation for economic losses, while India, Other Developing Asia, and Africa have greater economic benefits when rules focus on equitable cumulative emissions per capita. Finally this approach can quantify the levels of capital transfer the Green Climate Fund should manage going forward, indicates which regions should pay, which regions should receive, and quantify the amount of capital transfers.
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Keywords
Decarbonisation , Macroeconomic , Energy systems , Climate change , Energy security , Integrated energy systems model , Hybrid models
Citation
Glynn, J. 2015. Assessing energy security & macroeconomic feedback in national and global integrated energy systems models. PhD Thesis, University College Cork.