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Modeling the European power sector evolution: low-carbon generation technologies (renewables, CCS, nuclear), the electric infrastructure and their role in the EU leadership in climate policy

Periodic Reporting for period 2 - MERCURY (Modeling the European power sector evolution: low-carbon generation technologies (renewables, CCS, nuclear), the electric infrastructure and their role in the EU leadership in climate policy)

Reporting period: 2018-01-16 to 2019-01-15

Climate change is one of the main challenges that mankind has to face in the 21st century. There is scientific evidence that world climate is experiencing global warming, which might have detrimental effects on socio-economic systems if not sufficiently mitigated. The greenhouse gas emissions related to human activities, fostered by economic and population growth, have been identified as being “extremely likely” the cause of such an increase. The reduction of such emissions is thus a vital target for the coming decades.

From a technology perspective, power generation is the largest responsible for CO2 emissions, therefore great mitigation efforts will be required in this area. From a policy perspective, it is common opinion that the European Union is and will remain leader in implementing clean climate policies. Hence, the power sector and the EU have been chosen as the two key actors of the MERCURY project (although results have been produced and discussed on a global scale as well, as climate is a global issue).

The overarching objective of the project is to explore future climate change mitigation pathways, analyzing in particular the main low-carbon power generation technologies: renewables, Carbon Capture & Storage (CCS), and nuclear. This study has been carried out adopting the Integrated Assessment Model (IAM) WITCH and has been divided into two phases. Firstly, the prospects of renewables (specifically solar photovoltaics, PV), CCS, and nuclear have been analyzed. In particular, attention is focused not so much on the pure technology aspects, but rather on policy issues such as i) the role of the cost evolution in renewable diffusion, ii) the slow CCS deployment, and iii) the effects of the nuclear reactors ageing or of their phase-out. Secondly, future mitigation scenarios have been investigated considering different levels of participation by world countries in the mitigation action led by the EU.

Such a research work has the ultimate practical objective of providing policy-makers, as well as industry and other relevant stakeholders, with insightful information on future low-carbon routes which can be used for the definition and the implementation of effective policies for climate change mitigation and the development of technological solutions to fulfill them.

This work was carried out in the return phase of the project at Fondazione Eni Enrico Mattei: the first year at the outgoing host (the Renewable & Appropriate Energy Laboratory, RAEL, at the University of California, Berkeley) was instead dedicated to the improvement of the WITCH model and to the interactions and joint applications between WITCH and SWITCH, the detailed model of the electricity sector developed at RAEL.
The main objective of the first year was to improve the power sector modeling in the WITCH model, concerning system integration, storage, and grid. Concerning the first point, the existing modeling scheme, based on the so called capacity and flexibility constraints, was refined. Storage was fully integrated in the electricity production system
and technology detail was introduced, distinguishing between short-term and seasonal storage. Concerning grid, the work mainly consisted in differentiating between transmission and distribution, and introducing grid losses and the pooling effects, thus allowing for the integration of grid into the flexibility constraint.

The dynamics of decarbonization of the electricity sector in China was also comparatively investigated with WITCH and SWITCH. This highlighted a non-smooth behavior resulting from a set of “tipping points” in decarbonization pathways.

Concerning the technology prospects explored in the second year, the first research task is a multi-model exercise (involving three other research centers) which studies how different learning paths in solar PV could lead to decreasing investment costs, and thus to different energy mixes: models show a limited sensitivity to PV penetration in their specific results and this sensitivity even diminishes when all Variable Renewable Energies (i.e. wind and solar CSP, Concentrated Solar Power, in addition to PV) are focused. This means that the higher/lower PV penetration related to its lower/higher capital cost mainly occurs to the detriment/benefit of wind and CSP. Concerning CCS, the techno-economic effects of the delayed deployment of this technology have been explored with different climate change mitigation targets: mitigation costs can increase by 70% if CCS deployment is delayed until the end of the century with respect to its immediate large-scale diffusion. The analysis on nuclear, focused on the impacts of the ageing or the phase-out of nuclear reactors, has allowed to develop policy-relevant scenarios adherent to the policy landscape in the different world regions, even if it does not highlight any significant cost differences across scenarios.

The analysis on the different levels of climate participation provides a detailed picture on how mitigation costs may raise for the regions implementing clean policies if not all world regions take part in global mitigation action. In particular, the participating regions suffer relative additional cumulative GDP losses between 15% and 60% (depending on the levels of participation of the other regions) with respect to the reference mitigation scenario where climate action is uniformly shared at global level.

Four deliverables have been written which discuss the results and the technical details of the research. Six papers are being extracted from these documents and will progressively be published in international peer-reviewed journals. Results have also been disseminated in a number of seminars and conference presentations held by the Fellow, as well as through the final newsletter. The project website www.mercury-energy.eu reports the scientific output along with plenty of other useful information.
The main goal of the outgoing phase of the project was the improvement of the modeling of system integration of Variable Renewable Energies, storage, and grid in the WITCH model. Concerning system integration, the work allowed re-aligning WITCH to the state-of-the-art of the IAM community, as the implemented modeling scheme was mostly based on published literature. The new storage and grid modeling, instead, now feature beyond state-of-the-art solutions, which make WITCH the trailblazer among IAMs with this respect.

The scenario assessment carried out in the second part of the project is not methodologically novel, but it allowed to develop policy-relevant scenarios concerning climate change mitigation, analyzing in particular the prospects of low-carbon technologies with a focus on the EU. These credible scenarios and information are now available for scholars and policy-makers, who can produce directives or laws based on a solid scientific basis. Given the paramount importance of climate change mitigation, this can have a great positive impact towards the European policy objectives, and ultimately, its society.

The project has also shown a very strong attention towards the outreach activities: publications, website, newsletter, presentations and seminars, also given to a non-expert audience, have been effective in communicating the project results both to the scientific community and to the general public.