The climate-security nexus for Europe, examined with the POLES model

1. The climate-security nexus for Europe, examined with the POLES model Patrick Criqui Silvana Mima LEPII-EPE

2. SECURE: purpose of the study • The SECURE project – in FP7 – aims at an analysis of future energy Security of Supply for Europe • The research needs to also take into account the potential impacts of climate policies on the world energy system • The Poles model is used to produce a limited number of framing scenarios, to explore the « climate change and energy security nexus »

3. The POLES model • POLES is a partial equilibrium model of the world energy system, with year by year simulation to 2100 of supply, demand and price • Population, GDP by region, Oil and Gas resources, are exogenous • Technology costs and performances of 50 key energy technologies, either exogenous (TECHPOLdb) or endogenous with Two Factor Learning Curves • Simulation provides international energy prices, full energy balance for 47 regions, CO2 and other GHG emissions for 13 final sectors • Simulation of GHG abatement policies with a central role of explicit prices and costs of energy technologies • Introduction of the impacts of climate change on the energy sector and to perform assessment of the adaptation costs • Limitations: no explicit macro-economic model and built-in feed-back

4. 1+3 scenarios explored with the POLES model • The Baseline case is a counter-factual no climate policy scenario, used mostly for benchmarking • The Muddling Through scenario describes the consequences of non-coordinated, low profile climate policies • The Europe Alone case represents the outcome of a scenario in which every country is free-riding (almost) in climate policy … except the Union • The Global Regime explores a new world energy system, under strong emission constraint (EU-type)

5. SECURE scenarios, hypotheses and outcomes

6. Baseline Muddling Through Europe Alone Global Regime Energy Dependence / Vulnerability

7. The Baseline • In the Baseline case, world energy consumption and CO2 emissions double in 2050 • Oil and Gas peak in 2030 and 2040, while coal more than doubles, to 6.5 Gtoe in 2050 • EU energy consumption stabilizes after 2030 (EU gas at 540 Gm3 in 2050)

8. Unsustainability, chapter 1 • Oil production profiles and URRs are in the upper range of the available bottom-up estimates (P.R. Bauquis, ASPO)

9. Unsustainability, chapter 2 • GHGs emission profiles correspond to the highest category identified in IPCC-AR4 • The corresponding expected temperature increase is of more than 5°C • … from risk to radical uncertainty (M. Weitzman)

10. Baseline Muddling Through Europe Alone Global Regime Energy Dependence / Vulnerability

11. Muddling Through • Introcucing a 40 €/tCO2 in EU and 30 in RoW carbon price doesn’t change drastically the conditions of international energy markets

12. Muddling Through • World fossil consumption is stabilized after 2020 due to lower demand, higher non carbon energies • Emissions stabilize at a lower level compared to 2000, thanks to CCS (Type IV in IPCC AR4) • European energy is mostly impacted through the substitution of nuclear to coal in power generation and by CCS

13. Baseline Muddling Through Europe Alone Global Regime Energy Dependence / Vulnerability

14. Europe Alone • The carbon value diverges between EU and RoW from one order of magnitude: 300 vs 30 €/tCO2

15. Europe alone • This allows a reduction of 70% in EU CO2 emissions in 2050

16. Europe Alone • A significant part of emission reductions comes from the electricity sector, from the development of Renewable, Nuclear and CCS

17. Baseline Muddling Through Europe Alone Global Regime Energy Dependence / Vulnerability

18. Global Regime • In the Global Regime, a world 300 €/tCO2 carbon value allows for halving world emissions in 2050 • With strong consequences on fossil demand and prices, i.e. a stabilization of oil and gas prices

19. Global Regime: world • This case implies much lower world demand, at 16 Gtoe, and a new fuel mix • Fossil consumption in 2050 is near to the 2000 situation (lower oil, higher gas) CCS makes the rest of abatement

20. Global Regime: Europe • EU’s total demand is lower in 2050 than in 2000, but half of total supply is from non carbon energies, renewable and nuclear • Natural gas is peaking at 530 Gm3 in 2020, to 390 Gm3 in 2050, oil demand is halved in 2050

21. Baseline Muddling Through Europe Alone Global Regime Energy Dependence / Vulnerability

22. Dependence rate, by energy and global • The dependence rate does not change very much from one scenario to the other • While global dependence rate (on total GIC) is significantly altered

23. GIC and volume of fossil imports • Dependence may be lower and also applied to smaller quantities • In terms of vulnerability, importing 40% of 200 Mtoe is not equivalent to 40% of 400 Mtoe

24. Value of energy imports • From 1.05 to 2.3% of EU GDP between 2000 and 2050 in Baseline

25. Conclusions – 1: risks and policies • Strong climate policies bring a significant double dividend in terms of reduced vulnerability to energy shocks, even in a non-cooperative framework • This holds for Europe, but may be true for any importing region

26. Conclusions - 2 • The SECURE scenario allow to analyse the key policy issues in strategic terms • They show that climate policies are strongly structuring the energy security problem, whether in a cooperative or non-cooperative world • Beyond pure modelling and scenarios, many issues should be kept in mind in the storylines and analyses, in particular the institutional dimension for: • Framework and incentives for energy investment • Degree of integration of the European electricity system • Institutional factors in new technology chains (scale-up of CCS) • Regulatory framework for nuclear development