Research Institute of Economy, Trade and Industry (RIETI)
RIETI BBL Seminar
Handout
October 7, 2014
Speakers:
Mr. Didier HOUSSIN & Mr. HATTORI Takashi
http://www.rieti.go.jp/jp/index.html
Energy, Climate Change and Environment:
2014 Insights
Didier Houssin
Director, Sustainable Policy and Technology Directorate, IEA
Takashi Hattori
Head, Environment and Climate Change Unit, IEA
7 October 2014
© OECD/IEA 2014
IEA publication series
© OECD/IEA 2014
 Goes deeper into selected technical issues
 Each year chooses a special thematic focus
 Presents regional energy and emissions data
© OECD/IEA 2014
The emissions context
Global energy demand, energy CO2, and ESCII (CO2 intensity of global energy supply) in the 6DS scenario
120
1200
CO2 emissions (Gt CO2)
100
1000
Projected
Historical
80
800
60
600
40
400
20
200
0
1970
1980
1990
2000
2010
2020
2030
2040
Total primary energy demand (EJ)
ESCII (2011=100)
ESCII
Energy demand
CO2
0
2050
© OECD/IEA 2014
The emissions challenge
Getting to the 2DS will rely heavily on energy efficiency and renewables initially, but all technologies play a role.
Near‐term Impacts
Longer‐term Needs
© OECD/IEA 2014
© OECD/IEA 2014
Different energy futures…
The 2DS will require energy conservation and also significant transformation of the global energy mix.
Total Primary Energy Supply (EJ)
1 000
Coal
Oil
800
Natural gas
600
Nuclear
400
Other
renewables
200
Hydro
0
6DS
2011
2DS
Biomass and
waste
2050
© OECD/IEA 2014
A cleaner energy mix
The carbon intensity of energy supply will need to decrease rapidly in the future. ESCII (100 = 2010 carbon intensity)
120
6oC
100
80
4oC
60
40
2oC
20
0
1970
1980
1990
2000
2010
2020
2030
2040
2050
© OECD/IEA 2014
14 months to Paris
IPCC synthesis report
COP 20
ADP negotiating
session
IEA
OCT NOV DEC
Negotiating INDCs by text fixed for Q1 2015 translation June UNFCCC session
COP 21
JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC
COP 20 activities
CCXG ETP 2015
Energy, Climate Change and Environment 2014
WEO Special Climate Report
CCXG
COP 21
activities
Energy, Climate Change and Environment 2015
© OECD/IEA 2014
IEA messages for COP 20 in Lima
 Short term action pays off: emissions can be kept on a 2C pathway to 2020
 Energy sector decarbonisation actions are not solely driven by emissions goals
 Power sector decarbonisation is particularly critical in the period 2020 to 2030
 Action on investment and technology is needed now to set the conditions for long‐term energy sector transition
 The energy sector needs to prepare for the impacts of climate change © OECD/IEA 2014
Outline of ECCE: 2014 Insights
 Policies and actions to “unlock” existing high‐emissions assets
 The new landscape of emissions trading systems
 Energy metrics: A useful tool for tracking decarbonisation progress
 The air pollution‐GHG emissions nexus: implications for the energy sector (this year’s special focus)
 Trends in energy and emissions data
© OECD/IEA 2014
Chapter 1:
Policies and actions to “unlock” high‐emissions assets
© OECD/IEA 2014
“Lock‐in” of 2 degree emissions
2017
Gt 35
30
Other
2 °C trajectory
25
Transport
20
15
Room to manoeuvre
Industry
10
Lock‐in of existing
infrastructure
5
Power generation
2011
2015
2020
2025
2030
2035
Planned fossil fuel infrastructure through 2017 will generate all energy emissions under 2DS through 2035
© OECD/IEA 2014
“Un‐locking” high emission assets
Unlocking action
Policy Options
Direct regulations
Retirement of ‐ ownership decision coal plant
Price
‐ fleet‐wide emissions performance standard
‐ Renewables regulation
‐ demand reductions ‐ fuel tax changes
‐ carbon pricing
‐ preferential renewables tariffs
‐ “clean‐first” dispatch ‐ priority dispatch of renewables
‐ fleet‐wide emissions performance standard ‐ fuel tax changes
carbon pricing
‐ removal of fossil fuel subsidies
‐ targets for plant retrofit rates
‐ fleet‐wide emissions performance standard ‐ carbon pricing
‐ removal of fossil fuel subsidies
‐ regulated lifetime limits
‐ CCS mandates
‐ CCS trading schemes
‐ fleet‐wide emissions performance standard ‐ carbon pricing
‐ preferential tariffs
for CCS generation ‐ lifetime limits
‐ phase‐out Change dispatch of existing power plant fleet
Efficiency retrofit of coal plant Retrofit of coal plant for CCS
Supply/demand balances
© OECD/IEA 2014
The energy trilemma
Secure
Energy
Affordable
Sustainable
© OECD/IEA 2014
Chapter 2:
The new landscape of emissions trading systems
© OECD/IEA 2014
Current status of ETSs worldwide © OECD/IEA 2014
Interaction between ETSs and the energy sector Key issues include:  The challenges of implementing an ETS in energy systems of a more regulated nature
 The need to understand and address the impact of carbon prices on electricity prices
 The importance of incorporating policy flexibility to respond to external influences such as other energy and climate policies
© OECD/IEA 2014
Some conclusions from recent ETS experience
 ETSs may be implemented in highly regulated electricity systems, though additional measures may be needed to ensure propagation of the carbon price signal.
 Compensating those groups affected by rising electricity prices (driven by the carbon price) may achieve better outcomes than preventing the price rise.
 Improved integration of ETSs and complementary energy policies can ensure each set of policies meets its their respective objectives. © OECD/IEA 2014
Chapter 3:
Metrics for tracking progress in energy sector decarbonisation
© OECD/IEA 2014
Other criteria can drive energy sector actions
Energy Sector Actions
Are critical for achieving
GHG targets
Are not the only (or primary) driver of Other criteria: e.g.,
air quality
road congestion
© OECD/IEA 2014
Typology of metrics
Type I metrics
•
•
•
Total annual GHG emissions
GHG per unit of GDP
GHG per unit of energy supply
GHG goals
SHORT‐
TERM
LONG‐
TERM
Non‐ GHG goals
Type II metrics
•
•
•
Energy efficiency
Renewable energy Low‐carbon energy deployment goals
Type III metrics
•
•
Tracking R&D of key technologies
Emissions intensity of new electricity investment © OECD/IEA 2014
Type I and Type III metrics for the electricity sector
To achieve the 2DS, the average emissions intensity of new generation must be lower than that of natural gas before 2020, and only 10% of today’s levels after 2020.
700
6DS new
build
4DS new
build
2DS new
build
6DS Average
Emissions Intensity (gCO2/kWh)
600
500
400
4DS Average
300
2DS Average
200
Historical
100
0
1990
2000
2010
2020
2030
2040
2050
© OECD/IEA 2014
Chapter 4:
The air pollution‐GHG emissions nexus: Implications for the energy sector
© OECD/IEA 2014
Concerns about local air quality are rising
© OECD/IEA 2014
Air pollution control and GHG emissions linkages
Climate Change
Air Quality
Energy
GHG abatement
Public health
benefits
© OECD/IEA 2014
The air pollution‐GHG emissions nexus
Individual sections examine:
 GHG co‐benefits of air quality controls of large stationary sources
 China’s air quality constraints: Implications for GHG mitigation in power and key industry sectors
 The regulatory approach to climate policy in the United States
© OECD/IEA 2014
Plant‐level compliance options and impacts on GHG emissions
Air pollutants controlled • SO2 • NOx • Primary PM/black carbon • CO • Hg (mercury)
Plant‐level compliance options
• Retrofit for pollution control • Improve operating efficiency
• Fuel switching
• Plant closure
Impacts on other pollutants
• GHG emissions co‐benefits
© OECD/IEA 2014
Regional experience
European Union
 Large Combustion Plant (LCP) Directive  Integrated Pollution Prevention and Control (IPPC) Directive
Canada
 Air quality regulation and multi‐pollutant objectives  Caps on mercury emissions for each province
United States
 Cross‐State Air Pollution Rule (CSAPR) or “Transport Rule”
 Mercury and Air Toxics Standards (MATS) © OECD/IEA 2014
East Asia
 Japan has some of the cleanest and most efficient coal plants in the world, and most are installed with flue gas technologies for SO2 and NOx.  South Korea is gradually moving towards a more efficient power fleet by upgrading and replacing the existing plants with the new and more efficient ones.  China currently has the fastest installation rate of flue‐gas desulphurisation (FGD) and selective catalytic reduction (SCR) anywhere in the world. © OECD/IEA 2014
Importance of multi‐pollutant approach
Reduction in pollutant
emissions
Ozone
SO2

Sulphate

PM2.5

Acid
deposition
Mercury
CO2
/global
warming
 

NOx



 


Primary PM – black C
CO

Hg





 

CO2



 

© OECD/IEA 2014
China case study
Heavily industrialised growth model => air quality concerns in major urban areas
Short‐term measures:
 Beijing Olympics (2008)
 Shanghai World Expo (2010)
Severe air pollution episodes
 e.g., Beijing in January 2013
© OECD/IEA 2014
China: key national pollution control regulations
Five‐Year Plans  Pollution control mandates
 Closure of small, inefficient power plants  Energy/carbon intensity targets
“War on Pollution” policies
 PM2.5, PM10
Air Pollution Prevention and Control Action Plan
 PM, SOx, NOx
 Coal cap policies
 Additional forced retirements
© OECD/IEA 2014
Regional measures: Beijing
 Keep coal use below 65% of TPES by 2015
 Cap coal consumption at 10 Mt by 2017 (a 13 Mt reduction)
 Reduce power capacity by one‐third  Ban construction of new oil refining, steel, cement and thermal power plants
 Reduce cement production by 50%
 Upgrade 300 polluting firms in 2014
© OECD/IEA 2014
Some strategic considerations
 China’s air pollution controls can lead to significant GHG reductions, provided that they are structured to achieve these dual objectives
 Areas for consideration:
‐ Emissions shifting to unregulated/remote regions
‐ Ambitious syngas developments are significantly energy‐ and carbon‐intensive
more  Continued improvement of air quality statistics, accounting, and enforcement measures will be needed © OECD/IEA 2014
The emerging contours of the US regulatory approach
Electric power
Industry
Transportation
© OECD/IEA 2014
Regulating GHGs from electric power plants GHG standards for new power plants
 Uniform national standards for coal and gas
 Coal units would need CCS; NGCC meets the standard already
GHG standards for existing power plants
 State‐specific carbon intensity goals
 Projected to reduce emissions by 30% in 2030 relative to 2005
 Built around the application of four “building blocks”
 Will allow use of market mechanisms such as cap‐and trade
© OECD/IEA 2014
Some quick take‐aways from the U.S. GHG regulations  Standards for new power plants are likely to have little effect on US GHG emissions
 By 2020, power sector emissions will already have declined 13% since 2005; thus, standards expected to reduce emissions an additional 17% over the following decade
 In 2030, natural gas would be the dominant fuel (33%), but coal would still produce a significant share of electricity (31%)  CO2 intensity of US electricity generation projected to fall 19% from its 2012 fleet‐wide rate, i.e. to that of typical NGCC plant
 Mobile source rules for new cars and trucks are also important and may yield more reductions by 2030
© OECD/IEA 2014
Non‐CO2 benefits are significant
$93 billion
$55 billion
© OECD/IEA 2014
Chapter 5:
Data: Energy and Emissions Data
© OECD/IEA 2014
Selected indicators
Regional coverage
35000
World
OECD Americas OECD Asia Oceania OECD Europe Africa Non‐OECD Americas Middle East Non‐OECD Europe and Eurasia Asia (excluding China and India) China India
25000
20000
1990 = 100
160
15000
10000
140
5000
0
1971
1976
1981
Coal/peat
1986
Oil
120
1991
1996
2001
Gas
2006
2012
100
Other
80
60
1990
1993
1996
1999
2002
CO2 emissions
GDP/population
CO2/GDP
million tonnes of CO2
million tonnes of CO2











30000
35000
100%
30000
90%
2005
2008
2012
Population
CO2/TPES (ESCII)
80%
25000
70%
60%
20000
50%
15000
40%
10000
30%
20%
5000
10%
0
1971
0%
1981
1991
Electricity and heat
Manuf. ind. and construction
Residential
2001
2012
1990 2012
Other energy ind. own use
Transport
Other
© OECD/IEA 2014
Outline of 2014 edition
 Policies and actions to “unlock” existing high‐emissions assets
 The new landscape of emissions trading systems
 Energy metrics: A useful tool for tracking decarbonisation progress
 The air pollution‐GHG emissions nexus: Implications for the energy sector (this year’s special focus)
 Trends in energy and emissions data
© OECD/IEA 2014
IEA messages for COP 20 in Lima
 Short term action pays off: emissions can be kept on a 2C pathway to 2020
 Energy sector decarbonisation actions are not solely driven by emissions goals
 Power sector decarbonisation is particularly critical in the period 2020 to 2030
 Action is needed now to set the conditions for long‐term energy sector transition
 The energy sector needs to prepare for the impacts of climate change © OECD/IEA 2014
Thank you
ありがとう
© OECD/IEA 2014