Policy, Technology, and Economic Uncertainty Which matters the most - - PowerPoint PPT Presentation

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Policy, Technology, and Economic Uncertainty Which matters the most - - PowerPoint PPT Presentation

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Policy, Technology, and Economic Uncertainty Which matters the most for global energy system modeling? 15 th International Association for Energy Economics (IAEE) European Conference Session 6E: Energy Demand September 6, 2017 | Vienna, Austria

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U.S. Energy Information Administration

www.eia.gov Independent Statistics & Analysis

Policy, Technology, and Economic Uncertainty

15th International Association for Energy Economics (IAEE) European Conference Session 6E: Energy Demand September 6, 2017 | Vienna, Austria David Daniels Chief Energy Modeler, Office of Energy Analysis

Which matters the most for global energy system modeling?

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Answer depends on assumptions

  • Key uncertainties affect projections of the global energy system

– Policy (laws and regulations), technology change, consumer choice, macroeconomic trends – Model structural uncertainty, parameter uncertainty (data quality and availability)

  • Trade-offs in handling these uncertainties can bias model results

– Scale of cause (national regulation) vs. scale of effect (global emissions) – Interactions between region of interest and rest of world – Robustness of answer to changes of input assumptions (side cases)

David Daniels, IAEE Europe September 6, 2017 2

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Caveats

  • Cannot quantify uncertainty in EIA models

– Side case scenarios are not probabilistic – Can’t just compare changes from high/low macroeconomic growth cases to high/low resource assumption cases, for example

  • Can show some illustrative examples that might inform the discussion

– U.S. Clean Power Plan (CPP) as a policy example – High/Low global macroeconomic growth side cases – High/Low U.S. oil and gas resource and technology assumptions cases

David Daniels, IAEE Europe September 6, 2017 3

Results in this presentation represent ongoing research into modeling methods and do not constitute official EIA data

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Summary of U.S. Clean Power Plan (CPP)

  • Regulation limiting carbon dioxide emissions from existing power plants

– Promulgated by Environmental Protection Agency, based on authority from Clean Air Act – State-based program, each state has different emissions targets

  • CPP implemented in NEMS as regional emissions caps

– State-based program but implemented as a region-based program in NEMS (22 regions) – Limits begin in 2022, increase linearly until 2030 to meet average and target emissions levels – No intertemporal banking/borrowing, emissions limits assumed to increase linearly – Limits held constant after 2030, since the regulation is silent about post-2030 plans

David Daniels, IAEE Europe September 6, 2017 4

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5 10 15 20 25 30 35 40 45 1990 2000 2010 2020 2030 2040 2050 U.S. energy consumption quadrillion British thermal units

David Daniels, IAEE Europe September 6, 2017

CPP affects composition of U.S. energy consumption

Source: EIA Annual Energy Outlook 2017 (Reference case with, without CPP) 5

2016 projections history liquids natural gas renewables coal nuclear CPP No CPP

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Both of EIA’s long-run energy models used in this analysis

David Daniels, IAEE Europe September 6, 2017 6

National Energy Modeling System (NEMS) U.S. model used in Annual Energy Outlook World Energy Projection System (WEPS) 16-region global model used in International Energy Outlook

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Innovation: Linking NEMS and WEPS

  • Generated multiple scenarios using detailed U.S. model, NEMS:

– NEMS Reference, with and without CPP – NEMS High/Low Resource and Technology, with and without CPP – NEMS High/Low Macroeconomic Growth, with and without CPP

  • Ran NEMS results through world model, WEPS, to get global response

– WEPS Reference + NEMS Reference, with and without CPP – WEPS Reference + NEMS High/Low Resource and Technology, with and without CPP – WEPS High/Low Macroeconomic Growth + NEMS High/Low Macroeconomic Growth, with and without CPP

  • Results should be informative, but do not represent official EIA data

David Daniels, IAEE Europe September 6, 2017 7

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5 10 15 20 25 30 35 40 45 1990 2000 2010 2020 2030 2040 2050 energy-related carbon dioxide emissions billion metric tons of carbon dioxide

David Daniels, IAEE Europe September 6, 2017

CPP impacts projections of world emissions by about 1%

Source: EIA WEPS runs 2017.05.22_160052 (Reference), 2017.05.22_160120 (noCPP) 8

2015 projections history world U.S. CPP No CPP

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  • 0,8
  • 0,6
  • 0,4
  • 0,2

0,0 0,2 0,4 0,6 0,8 1990 2000 2010 2020 2030 2040 2050 change in energy-related carbon dioxide emissions from removal of CPP billion metric tons of carbon dioxide

David Daniels, IAEE Europe September 6, 2017

CPP also has emissions implications outside the U.S.

Source: EIA WEPS runs 2017.05.22_160052 (Reference), 2017.05.22_160120 (noCPP) 9

2015 projections history world U.S. non-U.S.

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0,0 1,0 2,0 3,0 4,0 5,0 6,0 7,0 1990 2000 2010 2020 2030 2040 2050 U.S. energy-related carbon dioxide emissions with CPP billion metric tons of carbon dioxide

David Daniels, IAEE Europe September 6, 2017

Side cases impact emissions by up to 8% per year in the U.S. by 2050

Source: EIA, AEO2017 10

2016 projections history low U.S. resources low economic growth high U.S. resources high economic growth reference

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  • 0,6
  • 0,4
  • 0,2

0,0 0,2 0,4 0,6 0,8 1990 2000 2010 2020 2030 2040 2050 U.S. energy-related carbon dioxide emissions, difference from Reference, CPP included billion metric tons of carbon dioxide

David Daniels, IAEE Europe September 6, 2017

Side case emissions trajectories differ non-trivially from reference

Source: EIA, AEO2017 11

2016 projections history high U.S. resources high economic growth low U.S. resources low economic growth

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  • 5,0
  • 4,0
  • 3,0
  • 2,0
  • 1,0

0,0 1,0 2,0 3,0 4,0 5,0 1990 2000 2010 2020 2030 2040 2050 world energy-related carbon dioxide emissions, difference from Reference, CPP included billion metric tons of carbon dioxide

David Daniels, IAEE Europe September 6, 2017

Side case impacts can be large at the world scale

Source: EIA, WEPS runs with CPP: 2017.05.22_160052 (Reference), 2017.0606_103604 (High Macro), 2017.0606_103614 (Low Macro), 2017.0607_165905 (High Resource), 2017.0607_165913 (Low Resource) 12

2015 projections history high U.S. resources high economic growth low U.S. resources low economic growth

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  • 0,6
  • 0,4
  • 0,2

0,0 0,2 0,4 0,6 0,8 1990 2000 2010 2020 2030 2040 2050 U.S. energy-related carbon dioxide emissions, change from Reference, no CPP billion metric tons of carbon dioxide

David Daniels, IAEE Europe September 6, 2017

Side cases impact emissions in the U.S. differently without CPP

Source: EIA, WEPS runs without CPP: 2017.0522_160120 (Reference), 2017.0606_103607 (High Macro), 2017.0606_103620 (Low Macro), 2017.0607_135603 (Low Resource), 2017.0607_135552 (High Resource) 13

2016 projections history high U.S. resources high economic growth low U.S. resources low economic growth

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  • 0,6
  • 0,4
  • 0,2

0,0 0,2 0,4 0,6 0,8 1990 2000 2010 2020 2030 2040 2050 change in world energy-related carbon dioxide emissions from removal of CPP billion metric tons of carbon dioxide

David Daniels, IAEE Europe September 6, 2017

World emissions increase due to removal of CPP depends on case

Source: EIA, WEPS runs with CPP: 2017.05.22_160052 (Reference), 2017.0606_103604 (High Macro), 2017.0606_103614 (Low Macro), 2017.0607_165905 (High Resource), 2017.0607_165913 (Low Resource); WEPS runs without CPP: 2017.0522_160120 (Reference), 2017.0606_103607 (High Macro), 2017.0606_103620 (Low Macro), 2017.0607_135603 (High Resource), 2017.0607_135552 (Low Resource) 14

2015 projections history high U.S. resources high economic growth low U.S. resources low economic growth reference

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Three takeaways for evaluating national policy scenarios

  • 1. Consider geographic scales of policy and impact

– Laws are national, carbon dioxide emissions are measured globally – Some policies may have impacts at multiple scales

  • 2. Account for impacts beyond the region of interest

– How does the policy impact trade with other countries? – How does it impact economic activity both within and outside the region of interest?

  • 3. Check policy impacts across side cases as well as reference

– The same policy changes can have different impacts in different projection scenarios – Robustness checking policy impacts across alternate side cases is important

David Daniels, IAEE Europe September 6, 2017 15

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Backup slides

David Daniels, IAEE Europe September 6, 2017 16

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Who is EIA?

  • Independent statistical agency

– Part of USG (DOE) – Independent both by statute and by tradition – Policy neutral, but not policy irrelevant

  • Collect and disseminate official energy data for U.S.
  • Also, produce forward-looking outlooks to inform policy, inter alia

– Short-Term Energy Outlook (STEO): monthly forecast, U.S. only, 13-24 months – Annual Energy Outlook (AEO): annual projection, U.S. only, 25-35 years – International Energy Outlook (IEO): annual projection, world, 25-35 years

David Daniels, IAEE Europe September 6, 2017 17

Backup

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5 10 15 20 25 30 35 40 45 1990 2000 2010 2020 2030 2040 2050 U.S. energy consumption quadrillion British thermal units

David Daniels, IAEE Europe September 6, 2017

Removal of CPP impacts projections of U.S. energy consumption

Source: EIA WEPS runs 2017.05.22_160052 (Reference), 2017.05.22_160120 (noCPP) 18

2015 projections history liquids natural gas renewables coal nuclear CPP No CPP

Backup

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0,0 1,0 2,0 3,0 4,0 5,0 6,0 7,0 1990 2000 2010 2020 2030 2040 2050 U.S. energy-related carbon dioxide emissions, no CPP billion metric tons of carbon dioxide

David Daniels, IAEE Europe September 6, 2017

Side cases impact emissions in the U.S. without CPP

Source: EIA, NEMS runs without CPP: (Reference),etc. 19

2016 projections history high U.S. resources high economic growth low U.S. resources low economic growth reference

Backup

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  • 5,0
  • 4,0
  • 3,0
  • 2,0
  • 1,0

0,0 1,0 2,0 3,0 4,0 5,0 1990 2000 2010 2020 2030 2040 2050 world energy-related carbon dioxide emissions, change from Reference, no CPP billion metric tons of carbon dioxide

David Daniels, IAEE Europe September 6, 2017

Side cases impact world emissions without CPP

Source: EIA, WEPS runs without CPP: 2017.0522_160120 (Reference), 2017.0606_103607 (High Macro), 2017.0606_103620 (Low Macro), 2017.0607_135603 (High Resource), 2017.0607_135552 (Low Resource) 20

2015 projections history high U.S. resources high economic growth low U.S. resources low economic growth

Backup

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  • 0,6
  • 0,4
  • 0,2

0,0 0,2 0,4 0,6 0,8 1990 2000 2010 2020 2030 2040 2050 change in U.S. energy-related carbon dioxide emissions from removal of CPP billion metric tons of carbon dioxide

David Daniels, IAEE Europe September 6, 2017

Removal of CPP results in greater emissions in the U.S.

Source: EIA, WEPS runs with CPP: 2017.05.22_160052 (Reference), 2017.0606_103604 (High Macro), 2017.0606_103614 (Low Macro), 2017.0607_165905 (High Resource), 2017.0607_165913 (Low Resource); WEPS runs without CPP: 2017.0522_160120 (Reference), 2017.0606_103607 (High Macro), 2017.0606_103620 (Low Macro), 2017.0607_135603 (High Resource), 2017.0607_135552 (Low Resource) 21

2016 projections history high U.S. resources high economic growth low U.S. resources low economic growth reference

Backup

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For more information

U.S. Energy Information Administration home page | www.eia.gov Annual Energy Outlook | www.eia.gov/aeo Short-Term Energy Outlook | www.eia.gov/steo International Energy Outlook | www.eia.gov/ieo Monthly Energy Review | www.eia.gov/mer Today in Energy | www.eia.gov/todayinenergy State Energy Profiles | www.eia.gov/state Drilling Productivity Report | www.eia.gov/petroleum/drilling/ International Energy Portal | www.eia.gov/beta/international/?src=home-b1

David Daniels, IAEE Europe September 6, 2017 22

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5 10 15 20 25 30 35 40 45 1990 2000 2010 2020 2030 2040 2050 Figure 1a: U.S. energy consumption, with and without CPP quadrillion British thermal units

David Daniels, IAEE Europe September 6, 2017

Figure 1

Source: EIA Annual Energy Outlook 2017 (Reference case with, without CPP), WEPS runs 2017.05.22_160052 (Reference), 2017.05.22_160120 (noCPP) 23

2016 projections history liquids natural gas renewables coal nuclear CPP No CPP

  • 0,8
  • 0,6
  • 0,4
  • 0,2

0,0 0,2 0,4 0,6 0,8 1990 2000 2010 2020 2030 2040 2050 Figure 1b: change in global energy-related carbon dioxide emissions from removal of CPP, billion metric tons 2015 projections history world U.S. non-U.S.

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David Daniels, IAEE Europe September 6, 2017

Figure 1

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  • 0,8
  • 0,6
  • 0,4
  • 0,2

0,0 0,2 0,4 0,6 0,8 1990 2000 2010 2020 2030 2040 2050 Figure 1: Change in world energy-related carbon dioxide emissions from removal of CPP, billion metric tons. a) U.S. and non-U.S. emissions in the reference case b) world emissions across various side cases 2015 projections history world U.S. non-U.S.

  • 0,6
  • 0,4
  • 0,2

0,0 0,2 0,4 0,6 0,8 1990 2000 2010 2020 2030 2040 2050 2015 projections history high U.S. resources high economic growth low U.S. resources low economic growth reference