Energy and Environment Energy efficiency and carbon dioxide emissions in energy‐intensive industry under stringent CO 2 policies ‐Comparison of top‐down and bo1om‐up approaches and evalua8on of usefulness to policy makers eceee Summer Study 2009, La Colle sur Loup, Côte d'Azur, France, 1‐6 June 2009 PhD Jessica Algehed PhD Stefan Wirsenius MSc Johanna Jönsson Heat & Power Technology Physical Resource Theory
Energy and Environment Presenta8on outline • Introduc8on: Why is this work important? • Comparison of bo1om‐up, top‐down, and hybrid approaches • Presenta8on of the 5 analysed ar8cles • Evalua8on of usefulness of models to policy and decision makers • Summary: What are the main findings of this work?
Energy and Environment Introduc8on ‐Why is it interes8ng to study the energy‐intensive industry? • The energy‐intensive industry is a major player in the European energy system Total energy use in Total emissions of CO2, Total energy use, EU27 industry, EU27 EU27 Energy‐ Energy‐ Energy‐ 18% 15% intensive intensive intensive 40% industry industry industry Others Others Others 60% 85% 82% Source: European Energy and Transport Trends 2008 Introduction – Comparison – Evaluation – Summary
Energy and Environment Introduc8on ‐Special features of the energy‐intensive industry • Comprised of a limited number of (large) plants ~100 refineries ~400 large pulp and paper mills ~40 large integrated steel works with blast furnaces • Capital intensive – Reduced emissions beyond a certain point require large investments and possibly also radical process changes Introduction – Comparison – Evaluation – Summary
Energy and Environment Introduc8on ‐How is the energy‐intensive industry usually studied? • Tradi8onally either top‐down or bo1om‐up approaches have been used to analyse the influence of specific policies • Divergent cost es8ma8ons => suggest different policies for mee8ng climate targets Introduction – Comparison – Evaluation – Summary
Energy and Environment Introduc8on ‐The aim of this study “Analyse and compare top‐down, bo1om‐up and integrated (hybrid) approaches used for evalua8ng poten8als for CO2 emissions reduc8on and CO2 policy analysis in energy‐ intensive industry” Evaluate the usefulness to policy and decision makers Focus on the pulp and paper industry Introduction – Comparison – Evaluation – Summary
Energy and Environment Comparison ‐ General descrip8on of approaches Macro‐economic Top‐down feedbacks Equilibrium Behavioral realism Technological Bo1om‐up explicitness Introduction – Comparison – Evaluation – Summary
Energy and Environment Comparison ‐ Studies used for the analysis • Five studies used as examples for the analysis – Heat integra*on opportuni*es in an average Scandinavian fine paper mill: model study and comparison with a market pulp mill , Axelsson and Berntsson (2007); techno‐ economic evaluaPon, convenPonal boQom‐up – Excess heat from kra> pulp mills: Trade‐offs between internal and external use in the case of Sweden—Part 2: Results for future energy market scenarios , Jönsson et al. (2008); techno‐economic opPmizaPon, convenPonal boQom‐up – The impact of increased efficiency in the industrial use of energy: A computable general equilibrium analysis for the United Kingdom , Allan et al. (2007); convenPonal top‐down – Capital vintage and climate change policies: the case of US pulp and paper , Davidsdonr and Ruth (2004); hybrid, top‐down framework – Hybrid modeling of industrial energy consump*on and greenhouse gas emissions with an applica*on to Canada , Murphy et al. (2007); hybrid, boQom‐up framework Introduction – Comparison – Evaluation – Summary
Energy and Environment Evalua8on ‐ Usefulness of models to policy and decision makers • Three key criteria for the evalua8on of usefulness of a model for policy makers (Murphy et al 2007) 1. Technological explicitness 2. Behaviour realism 3. Equilibrium feedbacks Introduction – Comparison – Evaluation – Summary
Energy and Environment Evalua8on At a rela8vely ‐ Usefulness of models to policy and decision makers aggregated level (products and Captures the 1. Technological explicitness fuels) surrounding Explicit, but not as infrastructure But does not detailed as the – Site/mill specific characteris8cs to some capture the conven8onal No explicit extent surrounding bo1om‐up studies technology – Technical infrastructure surrounding the site/mill infrastructure descrip8on – Technologies available on the market Approach Bo1om‐up Bo1om‐up Top‐down approach Hybrid approach – Hybrid approach – (Study) approach – techno‐ approach – techno‐ – computable top‐down bo1om‐up economic economic general equilibrium framework framework evalua8on op8miza8on (Allan et al. 2007) (Davidsdonr and (Murphy et al. (Axelsson and (Jönsson et al. Ruth 2004) 2007) Berntsson 2007) 2008) Technological Very high Very high Very low Medium High explicitness Introduction – Comparison – Evaluation – Summary
Energy and Environment Evalua8on ‐ Usefulness of models to policy and decision makers Uses demand elas8ci8es. No explicit representa8on of intangible costs and market 2. Behavior realism heterogeneity Technology choice – Implicit discount rates Do not consider algorithm that Assumes neo‐classic intangible costs or – Intangible costs that reflect consumer and explicitly represents behaviour func8ons. non‐financial implicit discount producer preferences Does not include e.g. preferences rates, intangible imperfect informa8on – Heterogeneity in the market place costs, and and transac8on costs heterogeneity in the market place Approach Bo1om‐up Bo1om‐up Top‐down Hybrid approach – Hybrid approach (Study) approach – approach – approach – top‐down – bo1om‐up techno‐economic techno‐economic computable framework framework evalua8on op8miza8on general equilibrium (Davidsdonr and (Murphy et al. (Axelsson and (Jönsson et al. (Allan et al. 2007) Ruth 2004) 2007) Berntsson 2007) 2008) Behavioural Low Low Medium Medium High realism Introduction – Comparison – Evaluation – Summary
Energy and Environment Evalua8on ‐ Usefulness of models to policy and decision makers Uses macro‐economic framework but does not explicitly include 3. Equilibrium feedbacks equilibrium feedbacks Yes, but does not Conven8onal – Interac8on of energy supply‐demand Based on a computable equilibrate government bo1om‐up models = general equilibrium budgets and markets for no linkage to the – Macro‐economic performance of the economy, model employment etc. rest of the economy including trade effects Approach Bo1om‐up Bo1om‐up Top‐down Hybrid approach – Hybrid approach (Study) approach – approach – approach – top‐down – bo1om‐up techno‐economic techno‐economic computable framework framework evalua8on op8miza8on general equilibrium (Davidsdonr and (Murphy et al. (Axelsson and (Jönsson et al. (Allan et al. 2007) Ruth 2004) 2007) Berntsson 2007) 2008) Ability to None None High None Medium capture equilibrium feedbacks Introduction – Comparison – Evaluation – Summary
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