Wir schaffen Wissen – heute für morgen
International Energy Workshop, Stanford 6 July 2011
Cost of ad-hoc nuclear policy uncertainties in the evolution of the Swiss electricity system
Ramachandran Kannan and Hal Turton
Energy Economics Group, Laboratory for Energy Systems Analysis
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Outline
Overview of Swiss electricity systems Swiss TIMES Electricity Model
• Model features
• Input data and key assumptions
Scenario definitions
Results and discussions
Conclusions
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Final energy demand in 2009 (877 PJ)
Gas 12%
Oil (Heating) 22%
Oil (Transport) 33%
Waste 1%
District heat 2%
Wood 4%
Coal 1%
Renewable 1%
Electricity 24%
Final energy dem and in 2009 (877 PJ)
Industry 19%
Service 16%
Transport 35%
Agriculture
1% Residential
29%
Overview of Swiss energy system
Energy Economy (2009)
Energy expenditure: CHF 27.1 Billion (5.1% of GDP) Energy import: CHF 8.7 Billion (4% of import expenditure) Energy import dependency: 80%
Electricity dem and in 2009 (207 PJ)
Industry 32%
Residential 31%
Agriculture 2%
Transport
8% Service
27%
Swiss electricity system
Electricity generation mix (2009)
Gas 23.76%
Solar PV 1.04%
Oil 2.81%
Waste 61.81%
Wood 4%
Landfill gas 6%
Wind 1%
Others 5%
Nuclear 39%
Hydro-River 24%
Hydro-Dam 32%
An annual average growth of 1.3% over the past ten years.
Self sufficiency in annual electricity generation, but still dependent on imported electricity for seasonal demand.
Power sector is nearly decarbonised.
Electricity trading is important in terms of power system balance and revenue (CHF 1.5 Billion in 2009).
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Swiss electricity system
Electricity load curves (2008)
Seasonal: Weekdays
3 4 5 6 7 8
0 6 12 18
GW
WIN_WK SPR_WK SUM_WK FAL_WK
Seasonal: Saturdays
3 4 5 6 7 8
0 6 12 18
GW
WIN_SA SPR_SA SUM_SA FAL_SA
Seasonal: Sundays
3 4 5 6 7 8
0 6 12 18
GW
WIN_SU SPR_SU SUM_SU FAL_SU
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Overview of Swiss energy system
2010 energy policy targets: status as of 2009
Fossil fuel reduction target of 10% from 2000 level: -1.3%
Carbon reduction targets of 10% from 1990 level: -2.7%
Cap the growth in electricity demand to < 5% from 2000 level: +14.4% (2010) Renewable electricity production of 1% from 2000 level (0.5 TWh): +0.46 TWh ☺☺☺☺
Renewable heat production of 3% from 2000 level (3 TWh): +3.37 TWh ☺☺☺☺
Quelle: EnergieSchweiz, 2010
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Swiss electricity system
Challenges and uncertainties
Retirement of the exiting nuclear reactors and filling the supply gap: The Swiss Federal Nuclear Safety Inspectorate gave a positive assessment on construction of new nuclear power plants (Nov. 2010).
After the Fukushima nuclear disaster, the Swiss Federal council has suspended plausible new nuclear option (May 2011).
Ambitious carbon reduction targets: 60-80% by 2050.
Large seasonal and diurnal variation in demand.
Renewable electricity – Limited resources and high variability in availability.
Uncertainties in future growth of electricity demand.
Imported electricity - Security and availability concerns in light of climate policy in cross-bordering countries.
Role of long term electricity trading - Uncertainty in development of electricity market in neighbouring countries under a low carbon economy.
- 2,000 4,000 6,000 8,000 10,000 12,000 14,000 CHF/kW
Hydro River - RfbHydro Dam - Rfb Hydro (Small) - Rfb Hydro (Pump) - Rfb Hydro River - NewHydro Dam - New Hydro (Small) - New Hydro (Pump) - New Hydro Large Dam - NewNuclearCoal Coal CCSGas Gas CCSCHP-Bio CHP-Gas CHP-W.Gas CHP-Gas (Fuel cell)Wind turbine Solar PV Geothermal
Capital cost (learing rate)
Swiss TIMES electricity model
Model features
Single region model with 2000-2100 time horizon and an hourly timeslice Calibrated to 2000-2010 data
Key Parameters
Electricity demand growth: 0.7% (2010-2020); 0.4% (2020–2035); 0.27% (2035…).
Discount rate 3% (slightly higher than the long term yields from confederation bounds)
For more details: R. Kannan and H. Turton (2011) Documentation on the development of Swiss TIMES Electricity Model (STEM-E), http://eem.web.psi.ch/Projects/STEM-E.html
Electricity generation costs (2010 data)
0 1 10 100
Hydro River - Rfb Hydro Dam - Rfb Hydro (Small) - Rfb Hydro (Pump) - Rfb Hydro River - New Hydro Dam - New Hydro (Small) - New Hydro (Pump) - New Hydro Large Dam - New Nuclear Coal Coal CCS Gas Gas CCS CHP-Bio CHP-Gas CHP-W.Gas CHP-Gas (Fuel cell) Wind turbine Solar PV Geothermal
Rp/kWh
Long-run Peak Short-run
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Scenario definitions
1. Base scenario (Base)– Self-sufficiency in electricity supply. A constraint is
introduced in such a way that annual exports and imports are required to be balanced but the timing of electricity trade is left unconstrained.
2. No nuclear scenario (B_NoNuc)- No new investment in nuclear plants, but operation of the existing nuclear plants can continue till the end of their 50 years lifetime.
3. Renewable scenario (B_RNW)- Nuclear and gas-fired power plants are restricted.
Since Swiss renewable resources are assumed to be not fully adequate to meet the demands, the self-sufficiency constraint is relaxed so that net imports can account for up to 35% of the electricity demand.
4. Carbon stabilization scenario (CO2_S)– Capped CO2emission intensity of
electricity (g-CO2/kWh) to the level in the year 2010. In addition, nuclear investment is completely restricted, but gas with CCS is available.
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Results
Electricity generation mix
Electricity generation mix: Summary
-50 0 50 100 150 200 250 300 350
2010 2020 2048 2080 2020 2048 2080 2020 2048 2080 2020 2048 2080
BASE B_NoNuc B_RNW CO2_S
PJ
Pumps Import (net) Wood Waste & Biogas Wind Solar Geothermal Oil Coal-CCS Coal Gas-CCS Gas (F) Gas (B) Nuclear Hydro (P) Hydro (D) Hydro (R)
Gas-based generation represents the most cost-effective non-nuclear alternatives but undermines long-term carbon reduction targets.
For low carbon and non-nuclear, imported electricity is required between 10- 35% of the demand.
Imported gas/electricity would increase concerns about supply security, particularly in winter when gas demand is also high for heating applications.
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Results
Installed capacity
Installed Capacity: Summary
0 5 10 15 20 25 30 35
2010 2020 2048 2080 2020 2048 2080 2020 2048 2080 2020 2048 2080
BASE B_NoNuc B_RNW CO2_S
GW
Wood Waste & Biogas Wind Solar Geothermal Oil Coal-CCS Coal Gas-CCS Gas (F) Gas (B) Nuclear Hydro (P) Hydro (D) Hydro (R)
Short-duration intermittence is not considered but it is likely that dam hydro could support the management of intermittency.
Results
Load curve Basescenario (Summer weekday)
Base: SUM-WK (2048)
0 5 10 15 20
0 4 8 12 16 20
GWh
0 5 10 15 20 25 30
Rp/kWh
Export: Base: SUM-WK (2048)
0 2 4 6 8 10
0 4 8 12 16 20
GWh
Import Gas-CCS Gas (CHP) Gas (F) Hydro (D) Hydro (P) Other RES Waste Solar Geothermal Oil
Gas (B) Wind Nuclear Hydro (R) Demand (GW) Marginal cost
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Results
Load curve Basescenario (Winter weekday)
Base: WIN-WK (2048)
0 5 10 15 20
0 4 8 12 16 20
GWh
0 5 10 15 20 25 30
Rp/kWh
Export: Base: WIN-WK (2048)
0 2 4 6 8 10
0 4 8 12 16 20
GWh
Import Gas-CCS Gas (CHP) Gas (F) Hydro (D) Hydro (P) Other RES Waste Solar Geothermal Oil
Gas (B) Wind Nuclear Hydro (R) Demand (GW) Marginal cost
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Results
Load curve Summer weekday
Base: SUM-WK (2048)
0 5 10 15 20
0 4 8 12 16 20
GWh
0 5 10 15 20 25 30
Rp/kWh
Export: Base: SUM-WK (2048)
0 2 4 6 8 10
0 4 8 12 16 20
GWh
B_NoNuc: SUM-WK (2048)
0 5 10 15 20
0 4 8 12 16 20
GWh
0 5 10 15 20 25 30
Rp/kWh
Export: B_NoNuc: SUM-WK (2048)
0 2 4 6 8 10
0 4 8 12 16 20
GWh
B_RNW: SUM-WK (2048)
0 5 10 15 20
0 4 8 12 16 20
GWh
0 5 10 15 20 25 30
Rp/kWh
Export: B_RNW: SUM-WK (2048)
0 2 4 6 8 10
0 4 8 12 16 20
GWh
CO2_S: SUM-WK (2048)
0 5 10 15 20
0 4 8 12 16 20
GWh
0 5 10 15 20 25 30
Rp/kWh
Export: CO2_S: SUM-WK (2048)
0 2 4 6 8 10
0 4 8 12 16 20
GWh
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Results
Load curve Winter weekday
Base: WIN-WK (2048)
0 5 10 15 20
0 4 8 12 16 20
GWh
0 5 10 15 20 25 30
Rp/kWh
Export: Base: WIN-WK (2048)
0 2 4 6 8 10
0 4 8 12 16 20
GWh
B_NoNuc: WIN-WK (2048)
0 5 10 15 20
0 4 8 12 16 20
GWh
0 5 10 15 20 25 30
Rp/kWh
Export: B_NoNuc: WIN-WK (2048)
0 2 4 6 8 10
0 4 8 12 16 20
GWh
B_RNW: WIN-WK (2048)
0 5 10 15 20
0 4 8 12 16 20
GWh
0 5 10 15 20 25 30
Rp/kWh
Export: B_RNW: WIN-WK (2048)
0 2 4 6 8 10
0 4 8 12 16 20
GWh
CO2_S: WIN-WK (2048)
0 5 10 15 20
0 4 8 12 16 20
GWh
0 5 10 15 20 25 30
Rp/kWh
Export: CO2_S: WIN-WK (2048)
0 2 4 6 8 10
0 4 8 12 16 20
GWh
Results
Seasonal electricity supply and demand balance
Seasonal electrcity supply-demand balance (2050)
0 50 100 150 200 250 300
Demand (2050)
Generation Import Export Generation Import Export
Base B_RNW
PJ
Summer Spring Fall Winter
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Results
CO2emissions and marginal cost of CO2
CO2 emissions
0 2 4 6 8 10 12 14
2010 2020 2048 2080 2020 2048 2080 2020 2048 2080 2020 2048 2080
BASE B_NoNuc B_RNW CO2_S
Mt CO2
Marginal cost of CO2
0 200 400 600 800 1000 1200 1400 1600 1800 2000
2015 2020 2025 2034 2048 2063 2080 2100
CHF2010/t-CO2
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Results
Undiscounted electricity system costs
Undiscounted electricity system cost: Summary
-2 0 2 4 6 8 10
2010 2020 2048 2080 2020 2048 2080 2020 2048 2080 2020 2048 2080
BASE B_NoNuc B_RNW CO2_S
Billion CHF2010 Trade Balance
Tax Resource Variable O&M Fixed O&M Capital
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Results
Average cost of electricity supply
Electricity generation cost: Summary
0 2 4 6 8 10 12
2010 2020 2048 2080 2020 2048 2080 2020 2048 2080 2020 2048 2080
BASE B_NoNuc B_RNW CO2_S
Rp /kWh
With nuclear, average cost of electricity is 4-5 Rp/kWh while the marginal cost of electricity supply at an hourly level rises to 17 Rp/kWh in winter.
In the non-nuclear options, average cost of electricity doubles (highly sensitive to the gas price & capital cost reduction in renewable technologies).
Conclusions
Short-term (through 2025)
Independent of decisions on new nuclear plants, there is a need for new supply in the short-term.
Support for the continued operation of existing nuclear and hydro plants remains important under all cases.
The most cost-effective shot-term supply option is new gas combined- cycle power plants.
Realising CO2 reduction targets requires considerable investments in non-hydro renewables, incurring high cost.
Medium and long term
Nuclear is the cost-effective technology options and favourable to a low carbon policy.
For a low carbon and non-nuclear policy, large investment in renewable or CCS is inevitable, which would double the electricity cost.
In any options, import of gas or a net import of electricity is required.
Swiss energy system would still rely on imported electricity for seasonal demands.
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Conclusions
Non-nuclear option incurs high cost with some tradeoffs between supply security and climate policy.
An increased dependence on imported natural gas or electricity, raising supply security concerns. There are needs to develop or enhance policy approaches supporting energy security.
Developing strategic reserves of natural gas and diversifying supplies.
Reinforcement of interconnection capacity, expanding energy storage potential and negotiating long-term contracts with reliable partners.
Deployment of capital intensive renewable technologies requires high capital outlays.
Financing the necessary capital investment shall be addressed.
Create an appropriate investment climate that reduces (or shares) some of the risks associated with new technologies.
Large-scale deployment of CCS is not fully demonstrated. Importantly, potential carbon storage sites are yet to be fully characterized in
Switzerland.
Policy implications
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Future direction
Within STEM-E
A comparison between the hourly STEM-E model and an aggregated timeslice model.
Implementation of other policies, e.g. feed-in tariff, electricity surcharge, …..
Sensitivities on electricity demand variance, … Extension of STEM-E to other sectors – A whole energy systems model (on going and funded by Swiss Federal Office of Energy).
CROSSTEM (Swiss + 4 regions) – inclusion of four cross bordering counties’ electricity systems (to be kicked off and funded by Swiss Federal Office of
Energy).
Energy Economics Group
Laboratory for Energy Systems Analysis
General Energy Research Department & Nuclear Energy and Safety Research Department
