Transcript The Enhanced Use of Wood-Biomass Macroeconomic, Sectoral and

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Austrian Hybrid Dynamic Model E3
The Enhanced Use of Wood-Biomass
Macroeconomic, Sectoral and
Environmental Impacts
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Todor Balabanov - I H S
Presentation at the
Parallel Session 7: Renewable Energy 3, IEW 2009
11.30 - 13.00, 19 June 2009, Sala Barbantini
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Introduction
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From the experience of the last decades it became clear
that national energy systems are highly interdependent
in that a variety of energy forms can be employed to
satisfy many end uses.
Secondly Alternative production modes compete for
many of the same resources.
Thirdly physical and technological limitations can restrict
the supply or potential uses of energy.
Fourthly environment effects or other externalities can
alter the permissible production and use patterns, and
that eventually new technologies can rapidly transform
the options available
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Inroduction
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To study these complexities the modelling system used
for our study consists of combination of two different
models:
a quantitative forest-sector specific (FOHOW) and
a computable general equilibrium macroeconomic model
(ATCEM-E3) and therefore addresses the complex
system interaction between macroeconomics, the main
economic sectors, including the forest sector, and the
environment
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The main aim of this combination is quantification of demand,
supply, trade and prices of wood products (including wood for
energy - further denoted as fuel wood) and their macroeconomic
and sectoral impacts.
The price system is the primary mechanism for developing an
efficient allocation of any economic good, including energy.
Changes in prices can affect the demand and supply for energy and
the resulting structure of the energy use. As of mid September 2008
there was almost four times difference between the prices of fuel oil
and of the wood briquettes and the electricity tariffs are rending
electrical heating 2,5 times more expensive than that using fuel oil.
Resource limitations can inhibit the increase in the potential fuel
wood-for-energy supply. To that end Forest Sector Simulation Model
(FOHOW has taken care of detailed modelling of the prospects of
the forest sector.
Wood-for-energy, or fuel wood, is a connotation for natural and
processed wood burnable, e.g., wood briquettes, wood pellets, cut
wood, chopped wood, chopped wood, etc.
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A primary externality of the energy system is the interaction with the
rest of the economy.
The ATCEM-E3 model provides a basis for evaluating economic
impacts of the chosen fuel-wood-for-energy policies both at
macroeconomic and at the sectoral level – indicating the effects of
the economic environment on energy decisions.
ATCEM-E3 is a Static General Equilibrium Model
SAM with 25 production sectors and 3 consumption destinations:
Households; Government; External trade and
nested KLEM production function
but
Sketchy representation of the energy
technologies
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Producers
Maximizing Profits
Factors
Kapital
&
Labor
Investment by origin
versus Investment by
destination
Imports
(EU, ROW imperfect substitutes)
Consumers
Maximizing Utility
Consumption by
purpose versus
Demand for goods
Exports
( EU, ROW imperfect
substitutes)
Market Equilibrium for producers & consumers
Environment, i.e., CO2 , NOx, SO2, particles
Energy, i.e., electricity, coal, oil, natural gas, etc.
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Price sensitivity and Resource limitations
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As seen from the graph below the differential between
the prices of fuel oil and of the wood briquettes is almost
four times and the electricity tariffs are rending electrical
heating up to 2,5 times more expensive than fuel oil.
According to Statistik Austria (2007) more than 955,000
Austrian Flats/Residences are being heated by natural
gas, around 876,300 are being heated by oil, 590,000
households use Biomass and around 254,500 use
electricity. Thus 1,150,000 Households are heated by Oil
and Electricity, so that the potential of switching to fuel
wood can be estimated to be around 100 PJ.
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Market prices for selected final energy carriers
Present (September 2008) market prices for some final energy
carriers used for heating by Austrian households
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Eur per liter of oil equivalent
0,90
0,80
0,70
0,60
0,50
0,40
0,30
0,20
0,10
0,00
fuel oil
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coal briquetts
w ood briquetts
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30
120
25
100
20
80
15
60
10
40
5
20
0
0
2000
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eur per cu.m.
Wood availability and prices according to FOHOW model run
million cu.m.
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by 2020 there will be up to 25 million m3 (193 PJ ) indigenous roundwood
available at the market with relative modest prices increases. The figures
for fuelwood for 2020 are 15 million m3 or 116 PJ.
2020
Total fuelwood incl. sawmill residues
Forestry - Total removals roundwood
C-Sawlog price (real 2000) €/cum
Fuelwood price (real 2000) €/fm
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300.000 Electricity End Use
Hydroelectricity
Power (Hydroelectricity )
Linear (Electricity End Use)
Fuel Wood
Expon. (Fuel Wood)
250.000
TJ
200.000
150.000
100.000
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50.000
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2020
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03
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97
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76
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70
0
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Electricity End Use, Hydropower and Fuel Wood
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Source: for 2000 Energiebilanzen Österreich 1970 – 2006; (2007); Own assumptions
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Final energy Use (in TJ) for the Fuelwood-for-energy scenario
(PIFWS)
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2000
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2020 in TJ or percent
2020
Share of Renewables
Coal
64.787
23.500
2,3%
Oil, Motive fuels& Feedstock
369.687
320.205
31,5%
Natural Gas
174.148
228.700
22,5%
Electricity
181.875
230.867
22,7%
Hydro share of the electricity - 65%
Fuel Wood
105.015
135.000
13,3%
13,3%
District Heating
42.075
60.171
5,9%
Wind & Heat Pumps
6.819
19.613
1,9%
1,9%
Total
944.406
1.018.089
100 %
Renewable 15.1% +Hydro 14.73%
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Externalities
We are assuming that in 2020 CO2 certificates will be
traded within the spread of their Marginal Abatement
Costs levels estimated by the EU´s “Impact Assessment
of the EU's objectives on climate change and renewable
energy for 2020” (EC, 2008) to be between € 40 and €
90/t CO2 .
To explore the full effects of the CO2 trade for our scenarios
we have chosen thee taxation levels - namely,
€ 0/t CO2 or no taxation (PIFWS0 ),
€ 60/t CO2 (PIFWS60) and
€ 80/t CO2.. (PIFWS80).
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alternative scenarios
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All graphs are compared to a benchmark GDP growth rate of 2
percent/ year from 2000 to 2020, that is an overall increase of
48.59% for the whole period, corresponding to an index value of 1.
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The three cases for the low scenario
Summary of the main indicators in the three scenarios
PIFWS0
1,4
1,2
PIFWS60
1,193 1,186 1,180
PIFWS80
1,029 1,011 0,998
index
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1
0,8
0,538
0,6
0,364 0,306
0,4
0,2
0
Households' consumption
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GDP at producer prices
Energy consumption
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Conclusions:
Under the presumptions of the PIFW scenarios the Austrian economy
can afford the enhanced use of renewables and a sustained
economic growth and can so to speak benefit from the double
dividend - sustained economic growth and fulfilment of EU targets
on renewables and CO2 reduction.
GDP growth is slightly higher than in the business as usual case but
this gain is diminishing with increased CO2 taxation.
Households’ consumption is way above that of GDP growth and
aggregated energy consumption is far below the growth of GDP.
These favourable developments of the main aggregates therefore
seem to support the double dividend view, namely, that by
enhancing the use of renewables for the generation of energy,
Austria benefits from a slightly higher economic growth that is also
sustainable
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Work in Progress:
ToDo-BoUp-E3
Formulated by Rutherford/Boehringer as a mixed
complementarity problem permits an energyeconomy model to combine technological details
of an energy system (bottom-up ) with a
characterization of the market equilibrium (topdown).
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ToDo-BoUp-E3 : applications
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impacts of scenarios on country´s economic
variables, e.g., changes of the main real
economic indicators, in the consumption of the
households, in the sectoral employment levels,
in the energy consumption, of the emission
levels, the energy price indices, subsidies, etc.
for applied energy and environmental policy
analysis, e.g., the impacts of the Green Quotas
and the Environmental Tax Reform.
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Country level Top-Down/Bottom -up
Dynamic Model (ToDo-BoUp-E3)
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Is to be methodologically based on the a hybrid
modelling concept, i.e. the direct combination of
bottom-up energy system model and top-down
equilibrium model of the broader economy
solved in a complementarity format.
ToDo-BoUp-E3 is to be programmed in
GAMS/MPSGE environment and calibrated to a
base year data set comprising a SAM and data
set for present and future energy and
environmental technologies.
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ToDo-BoUp-E3 : applications
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impacts of scenarios on country´s economic
variables, e.g., changes of the main real
economic indicators, in the consumption of the
households, in the sectoral employment levels,
in the energy consumption, of the emission
levels, the energy price indices, etc.
for applied energy and environmental policy
analysis, e.g., the impacts of the Green Quotas
and the Environmental Tax Reform.
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Thank you for your attention!!
Todor Balabanov ( I H S )
EM: [email protected]
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