PNNL-66648

The Role of Technology in Meeting National and Global

Technology NeedsPART II

The Cosmos ClubWashington, DC

May 27, 2009

GTSPThe Global Energy Technology Strategy Program

Presented byJae Edmonds and Leon Clarke

for the GTSP team

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Part II

In Part I we discussed interactions between technology and climate policy. He showed how technology deployment was affected by the policy environment, but also, how technology affected policy.

We have been particularly interested in imperfect responses to climate change.

In Part II we will continue this line of inquiry. We will take on three questions:

How important is sectoral coverage?Will bioenergy with CCS make it possible to get to very low scenarios? And, how does bioenergy interact with other terrestrial ecosystems?How big a deal is emissions leakage?

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How important is sectoral coverage?

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Electrification

If all fossil fuel carbon is priced equally the price of electricity FALLS relative to its competitors in end-use markets.As a consequence the world electrifies.

Average Electricity Price Relative to Oil Price

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Electrification Over Time

Global Fossil Fuel CO2 Emissions4.7 Wm-2 Stabilization

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Stabilization changes the sources of fossil CO2 emissions.•Utility emissions drop by 90 percent.

•Buildings and Industry electrify. •Transportation emissions dominate.

Global Fossil Fuel CO2 EmissionsReference Case

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Electrification

If only electric power generators see carbon prices, then the cost of reducing a tonne of carbon emissions rises by a factor of FIVE.

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Will bioenergy with CCS make it possible to get to very low scenarios? And, how does bioenergy interact with other terrestrial ecosystems?

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ENERGY with NEGATIVE emissions are a major feature of the new low-climate-forcing scenarios.

Why are we interested in bioenergy with CCS?

Source: Rao, Shilpa, Keywan Riahi and CheolhungCho, Detlef van Vuuren, Elke Stehfest, Michel den Elzen, Jasper van Vliet and Morna Isaac. 2008. IMAGE and MESSAGE Scenarios Limiting GHG Concentrations to Low Levels. Framework Contract ENV.C5/FRA/2006/0071. International Institute for Applied Systems Analysis, Laxenburg, Austria.

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Bioenergy is more than purpose-grown bioenergy crops

MiniCAM Reference scenario.

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Bioenergy and CCS

Both bioenergy and CCS are technologies that exist today.

The combination of both is also being explored.

CCS is not deployed at scale.Deployment of each depends on the institutional environment.

Carbon priceInstitutional framework that facilitates a business model for deployment.

Sequestration of CO2 from bioethanol synthesisUniversity of Illinois – DOE –Archer Daniels Midland

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Present State of CCS Technology

CCS systems have been used with coal and gas power generation systems since the 1970’s. (But not at scale.)3,900 miles of CO2 transport systems.CO2 has been used with EOR for 35 years.CCS can potentially be applied to a wide range of industrial systems ranging from fossil fuel power generation (coal, gas and oil), cement kilns, refineries, chemical manufacture, etc.There are 4 end-to-end commercial systems in place today.

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CCS and Cumulative Emissions

Cumulative emissions from MiniCAM CCSP SAP 2.1aPotential geologic storage from Dooley et al. (2004) and subsequent updates.

Ratio of Cumulative Emissions 1990 to 2095 to Maximum Potential Geologic Storage Capacity by Region

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Cumulative global CO2 capture and maximum potential global storage capacity.

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Institutional arrangement for CCS

CCS is a CO2 emissions mitigation technology.It raises capital costs by 50%.It takes a substantial fraction of a power plant’s power production to run.

There is no business model for deploying CCS without either a significant positive price on carbon, or a regulatory requirement.

New plants would be cheapest.Retrofits are possible at extra cost.

For most of the world’s carbon emissions, the price of carbon is zero.The regulatory model that governs CCS for most of the world’s carbon emissions is still under development.

Exceptions exist, e.g. NorwaySignificant progress in many parts of the OECD in defining CCS rules.

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Present State of CCS Technology

Jim Dooley will be talking about this in more detail after lunch at the JGCRI at the GTSP Technical Workshop.

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Bioenergy

Bioenergy is derived from plant material—a very young hydrocarbon.

Bioenergy derives its carbon from the air.If the plant material is oxidized, then there in no NET change in carbon in the atmosphere. Though there are indirect emissions to be discussed shortly.

Bioenergy is generally considered a renewable energy form.Bioenergy was the dominant preindustrial energy form.

It was supplanted by higher energy density forms, e.g. fossil fuels and nuclear power.

It is still used today, e.g. the pulp and paper industry but also traditional bioenergy use in developing regions.It is a major source of liquid fuel in Brazil today.

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Bioenergy today

There is more bioenergy used today than when it was the dominant energy form.Bioenergy is not cheap and without a subsidy, it does not compete effectively with energy forms such as fossil fuels.The relative attractiveness of bioenergy use could be dramatically different if under a carbon price regime.

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Historical Global Energy Use

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Indirect Land-use Change Emissions (ILUC)

Bioenergy production requires land, a limited resource.Any number of papers have identified the problem of indirect land-use emissions (ILUC).

Fargione et al. (2008); Searchinger et al. (2008); Edmonds et al. (2003); and Wise et al. (2009).

ILCU occurs when a major new demand for land is introduced in the face of a fixed land resource.

Increased demand for land for purpose-grown bioenergy crops results in higher rental rates for crops and potentially expansion into “unmanaged” lands.

Crutzen et al. (2008) also raised the question of expanded non-CO2 GHG emissions, most notably as a consequence of N2O from fertilizer applications.

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ILUC and Limiting Atmospheric CO2Concentrations

There are more than 2000 billion tons of carbon in terrestrial ecosystems including soils and above ground plants.Limiting atmospheric CO2 concentrations to low levels, e.g. 450 or 550 ppm implies limits for total anthropogenic carbon emissions.

450 ppm ⇒ ~500 PgC (2005 to 2100)550 ppm ⇒ ~800 PgC (2005 to 2100)Note that these concentrations are NOT CO2-equivalent

The extent of ILUC depends on the policy environment.

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Carbon Pricing

CCS only deploys in the presence of either a carbon price of a regulatory requirement.Purpose-grown bioenergy production is enhanced by the presence of a carbon price.

The BioCCS combination produces a negative emissionNeed for a mechanism that allows for payment for negative emission.Note that negative global emission scenarios not only produce norevenue, but are a net public expenditure.

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Carbon Pricing in for Two Contrasting Scenarios

Immediate, universal participation by all regions to limit CO2 concentrations in 2095.Two alternative carbon pricing regimes

1. Fossil fuel and industrial carbon tax (FFICT)—in this regime only fossil fuel and industrial carbon emissions are valued. Bioenergy is treated as having no net carbon. Terrestrial carbon is valued at zero.

2. Universal carbon tax (UCT)—in this regime all carbon is valued equally regardless of either its origins or the activity that introduces it to (or removes it from) the atmosphere.

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Carbon Prices: FFICT and UCT

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Net Land Use Change Emissions & Fossil Fuel and Industrial CO2 Emissions

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For a given CO2 concentration limitIn the UTC regime ILUC disappears as an issue.

In the FFICT regime high carbon prices drive bioenergy demands and ILUC

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Land use: 450 ppm atmospheric CO2

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Where does the bioenergy go? Carbon taxes and bioenergy use

Bioenergy can play many roles in climate stabilization:

Provider of liquid fuels for transportation ( ), orIf CO2 capture and storage (CCS) is an available technology, bioenergy could be used in power generation with CCS ( ) and provide a means of achieving negative global CO2 emissions.Bioenergy with CCS is a key technology for achieving low climate stabilization levels.

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BioCCS and Electric Power Generation

BioCCS in electricity is a minor energy form in the first half of the century.

Even in the 450 ppm case

BioCCS deploys 15 to 30 years after CCS with fossil fuels.

Total BioCCS energy use for power production in 2095

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Global Fuel Consumption in Electric Power Generation—450 ppm Limit

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Biomass Consumption: EMF22 3.7 w/m2

Overshoot, Immediate Accession

Bioenergy is used to fuel the transportation sector when CCS is not available.

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Corn Price When Carbon Is Valued But No Bioenergy Is Produced

Significant crop price escalation occurs if carbon is valued, even in the absence of purpose grown bioenergy production.

Prior to 2040 the influence of bioenergy is negligible.Prior to 2040 crop price escalation, relative to the reference scenario, is predominantly driven by the value of carbon.

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Land Use Change Emissions and Crop Productivity

Cumulative Emissions 2005 to 2095

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Bioenergy, Land Use, and Climate Change

Allison Thomson will be talking about the impact of climate change on these results later today at the GTSP Technical Workshop.

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How big a deal is emissions leakage?

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Delayed Accession 3.7 W/m2 Scenario

Industrial Leakage—SGM EMF22 550 ppm CO2-e with delayed participation

The degree of industrial leakage decreases as the coalition expands.The degree of industrial leakage increases with time.Leakage reaches a maximum in the EMF22 550 ppm CO2-e scenario at around 6%

Leakage—offsetting increases in non-mitigating regions.Measuring leakage: Mitigation by those reducing domestic emissions less total reductions in Global emissions.

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SGM EMF22 International

Karen Fisher-Vanden will be talking about this in more detail tomorrow morning at the JGCRI at the GTSP Technical Workshop.

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Land Use Leakage 3.7 Scenario, Overshoot

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Leakage—offsetting increases in non-mitigating regions.Measuring leakage: Mitigation by those reducing domestic emissions less total reductions in Global emissions.

S1 = Immediate Accession

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Land Allocation: 3.7 W/m2 Overshoot

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Land Allocation: 3.7 W/m2 Overshoot

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Land Allocation: 3.7 W/m2 Overshoot

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MiniCAM EMF22 International

Kate Calvin will be talking about this in more detail tomorrow morning at the JGCRI at the GTSP Technical Workshop.

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Summing Up

This year we are going to discussed the role of technology in addressing climate change through a series of questions in a two-part presentation: The Role of Technology in Meeting National and Global Technology Needs: Parts I and IIPart I

What do stabilization goals imply for near-term actions and long-term strategies? How low can we go? How fast can we get there?In the long-term almost anything is possible, but the faster we want to get there, the harder it is and the more important technologybecomes.Who needs to do what and by when?Emissions mitigation may start in the developed world, but in the long term China, India and other developing nations will need tolead. Getting to 450 ppm with gradually expanding participationmeans rapid reductions by everyone as soon as they begin.

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Summing Up

Part I (continued)How much technology do we need to limit climate change?You always begin with what you’ve got. But, the better the technology (both end-use and energy supply) the less “doing without” is needed. And, getting to low scenarios means a rapidly accelerating deployment of emissions mitigation technologies.How are near-term actions affected by long-term technology expectations?The poorer you expect future technology to be, the more you need to do today. You “bank” emissions mitigation today to avoid really deep reductions in the future.What is the value of having and developing technology?Technology is more important to controlling mitigation costs theless perfect the world. Most of the value of developing technology is in other countries getting and deploying it.

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Summing Up

Part IIHow important is sectoral coverage?Incomplete sectoral coverage is an expensive luxury.Will bioenergy with CCS make it possible to get to very low scenarios? And, how does bioenergy interact with other terrestrial ecosystems?Bioenergy with CCS has the potential to deliver negative net emissions of CO2 and therefore help make very low CO2concentrations goals possible. Bioenergy’s interaction with other terrestrial systems will depend on both the technology available for growing crops and the policy environment.How big a deal is emissions leakage?Leakage can be important. Industrial leakage tends to grow withthe scale of the global economic system and with the carbon price driver. Land-use change emissions are a potentially important source of leakage.

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END

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