International Energy Workshop Venise Policy Scenarios and Stochastic Analysis with the Gemini-E3 Model F. Babonneau¹ – A. Haurie¹ – M. Vielle² (¹Ordecsys – ²EPFL) Switzerlandwww.ordecsys.com
International Energy Workshop Venise Aim of the work Perform stochastic analysis in the framework of the Planets Project Analyzing the robustness of the scenario results in particular concerning energy mix and technological choice Preliminary runs
International Energy Workshop Venise Main Characterictics of GEMINI-E3 World General Equilibrium Model Total Price Flexibility Detailed Representation of Indirect Taxation Measure of Welfare Cost of Policies and Components
International Energy Workshop Venise GEMINI-E3 Production Function
International Energy Workshop Venise Electricity Generation CCS
International Energy Workshop Venise Cost of CCS Information coming from Chalmers University of Technology - (Euro/ton CO2) CaptureTransportStorage K. Andersson, F. Johnsson « Process evaluation of an 865 MWe lignite fired O2/CO2 power plant » Energy Conversion and Management, 2006
International Energy Workshop Venise The climate constraint The objective is to limit the radiative forcing to 3.5 W/m 2, the emission profile is given by TIAM
International Energy Workshop Venise Methodology 1/2 We retain the BAU scenario and the FP-3.5 scenario defined by the planets project We use an aggregated version of Gemini-E3 model Run Monte Carlo simulations on six parameters We run 500 scenarios with Latin Hyper Cube sampling
International Energy Workshop Venise Regions EUR : European Union (25) OEC : Other industrialized countries ASI : Asia EEC : Energy exporting countries (FSU-MID) ROW : Rest of the World
International Energy Workshop Venise Methodology 2/2 Uncertain parameters : Productivity factor (technical progress on labor) : ASI ROW Correlation Autonomous Energy Efficiency Improvements (AEEI) Elasticities Energy nest Aggregated inputs Oil prices Price of carbon capture and sequestration (only for coal)
International Energy Workshop Venise Infeasible runs 19% of runs are infeasible (i.e. Gemini-E3 does not converge) We estimate a probit model: 0 if convergence 1 otherwise Endogenous variables : uncertain parameters
International Energy Workshop Venise Carbon tax in 2050 in US $ per ton
International Energy Workshop Venise Energy consumption (G toe) in 2050 Coal Gas Oil Elec In red: Standard deviation divided by mean
International Energy Workshop Venise Macroeconomic Cost (GDP change wrt Baseline ) 1/2 OECEUR ROW ASI
International Energy Workshop Venise Macroeconomic Cost (GDP change wrt Baseline) – /2 EEC
International Energy Workshop Venise We propose to combine Monte Carlo and Optimal hedging strategy to «model» the dynamic process of the uncertainty. 1. We use the stochastic version of TIAM to generate emission profiles for different values of CS and assuming that the uncertainty is revealed in Gemini-E3 : Monte-Carlo sampling on CS Generation of the emission profile by interpolation on the profiles given by TIAM. Next Step : Uncertainty on climate sensitivity (1/2)
International Energy Workshop Venise 3. Try to link results and stochastic parameters (econometric) Next Step : Uncertainty on climate sensitivity (2/2)