Lecture 9: Energy service demand projections UNIK4820/9820 UNIK: 05/04-2017 Arne Lind

Outline Course content Introduction to energy demand forecasts Part 0: Outline Outline Course content Introduction to energy demand forecasts Methodology Projection of energy demand Households Service sector Industry Transport Calculation of energy use Assumptions Results UNIK4820

Part 0: Outline Course content (1/2) Lecture 9 (5th of April): Energy service demand projections Introduction Statistics Methodology Energy demand sectors Lecture 10 (19th of April): Working with scenarios (types and techniques) A scenario typology Techniques Lecture 11 (26th of April): Working with scenarios (trust + acknowledged global scenarios) Trust and the illusive force of scenarios Acknowledged scenarios from WEO, ETP and N-ETP UNIK4820

Part 0: Outline Course content (2/2) Lecture 12 (3rd of May): Linear energy system models (part 2) How to make (and solve) a more advanced energy system model in Excel Interpretation of results Assignment 3 (10th of May): Linear energy system models Solve some of the same problems as in assignment 2 by a computer Sensitivity analysis Lecture 12 (24th of May): Norwegian and international energy and climate policy or Linear energy system models (part 3) Norwegian climate agreement (Klimaforliket) 2030 Climate and energy policy framework for EU The Norwegian energy report (Energiutredningen) UNIK4820

Introduction to energy demand forecasts Part 1: Introduction Introduction to energy demand forecasts UNIK4820

Introduction The future share of renewables is a goal in many policies Part 1: Introduction Introduction The future share of renewables is a goal in many policies Since this is correlated to the future energy demand that is uncertain, the impact of different developments is of high interest The development of energy demand is a key driver of the future energy system Projections of energy demand are central in analyses and policies to promote conservation, efficiency, technology implementation and renewable energy production A lot of different stakeholders are dependent on energy demand projections in their work with energy systems analyses and planning The type of projection needed differs e.g. concerning geographical area, energy carriers, demand sectors and time levels Many forecasts are based on projections of GDP (gross domestic product) and population sometimes including price elasticity of energy-service demand UNIK4820

Total energy use per sector – Statistics and projection Part 1: Introduction Total energy use per sector – Statistics and projection UNIK4820

Part 2: Methodology Methodology UNIK4820

Part 2: Methodology Methodology The development in useful energy demand is calculated based on the following assumptions: No market based changes in energy efficiency No market based changes in alternative fuels No alternative use of technology The forecasts are based on assumptions of economic growth, business development, demographics, etc It also includes normative measures such as building regulations The energy demand is divided into four main sectors: Industry, households, service & another and transport These are further divided into sub-groups and the forecast is calculated for each of these sub-groups The forecast is input to analyses with the energy system model TIMES-Norway UNIK4820

Projection of drivers / activity Energy-service demand Methodology Part 2: Methodology A Projection of drivers / activity Use of energy carriers & technologies Energy system model TIMES- Norway Energy-service demand E = I * A I Indicator - Base year - Development Energy statistics Energy by end-use Statistics of drivers Energy demand = energy service demand (input to TIMES-Norway) Energy use = use of different energy carriers (output from TIMES-Norway) UNIK4820

TIMES Norway (energy system model) Part 2: Methodology TIMES Norway (energy system model) UNIK4820

Projection of energy demand Part 3: Energy demand projection Projection of energy demand UNIK4820

Part 3: Energy demand projection Households The projection of energy service demand for households (E) is calculated as dwelling area (A) multiplied by specific energy service demand (I): 𝐸=𝐼 ×𝐴=𝑑𝑤𝑒𝑙𝑙𝑖𝑛𝑔 𝑎𝑟𝑒𝑎 𝑚 2 ×𝑠𝑝𝑒𝑐𝑖𝑓𝑖𝑐 𝑒𝑛𝑒𝑟𝑔𝑦 𝑠𝑒𝑟𝑣𝑖𝑐𝑒 𝑑𝑒𝑚𝑎𝑛𝑑 [ 𝑘𝑊ℎ 𝑚 2 ] Future dwelling area is calculated based on development of different parameters derived on historical evolution The key statistics are presented on the next slide The resulting development of number of households and household area is larger than the population growth The area per dwelling and per person will also increase while the number of persons per dwelling will continue to decrease UNIK4820

Households: Key statistics and assumptions Part 3: Energy demand projection Households: Key statistics and assumptions UNIK4820

Households – Statistics for 2011 Part 3: Energy demand projection Households – Statistics for 2011 UNIK4820

Relative development of key parameters of residential projection Part 3: Energy demand projection Relative development of key parameters of residential projection UNIK4820

End service demand by end-use (Households) Part 3: Energy demand projection End service demand by end-use (Households) Energy service demand by end-use is an important premise for calculation of future energy demand The input used for the present calculations are based on publications from: NVE Statistics Norway Building regulations of 2010 The energy service demand is divided into: Space heating Water heating Lighting Other electricity specific use UNIK4820

Residential energy service demand by end-use in 2010 Part 3: Energy demand projection Residential energy service demand by end-use in 2010 All numbers in kWh/dwelling UNIK4820

Energy demand per household Part 3: Energy demand projection Energy demand per household UNIK4820

Residential energy service demand by end-use in 2010 Part 3: Energy demand projection Residential energy service demand by end-use in 2010 All numbers in kWh/m2 UNIK4820

Residential energy service demand 2010- 2050 for the reference path Part 3: Energy demand projection Residential energy service demand 2010- 2050 for the reference path UNIK4820

Part 3: Energy demand projection Service sector The service sector is an aggregate of the primary and tertiary sectors and the construction sector The projection of energy service demand for the service sector (E) is calculated as building area (A) multiplied by specific energy service demand (I): 𝐸=𝐼 ×𝐴=𝑏𝑢𝑖𝑙𝑑𝑖𝑛𝑔 𝑎𝑟𝑒𝑎 𝑚 2 ×𝑠𝑝𝑒𝑐𝑖𝑓𝑖𝑐 𝑒𝑛𝑒𝑟𝑔𝑦 𝑠𝑒𝑟𝑣𝑖𝑐𝑒 𝑑𝑒𝑚𝑎𝑛𝑑 [ 𝑘𝑊ℎ 𝑚 2 ] 𝐸= 𝐴 𝑛𝑒𝑤 × 𝐼 𝑇𝐸𝐾10 + 𝐴 𝑟𝑒𝑓𝑢𝑟𝑏𝑖𝑠ℎ𝑒𝑑 × 𝐼 𝑟𝑒𝑓𝑢𝑟𝑏𝑖𝑠ℎ𝑒𝑑 + 𝐴 𝑒𝑥𝑖𝑠𝑡𝑖𝑛𝑔 × 𝐼 𝑒𝑥𝑖𝑠𝑡𝑖𝑛𝑔 The future area of non-residential buildings is calculated as: A= 𝐴 2010 ×𝑝𝑜𝑝𝑢𝑙𝑎𝑡𝑖𝑜𝑛 𝑔𝑟𝑜𝑤𝑡ℎ×𝑖𝑛𝑡𝑒𝑛𝑠𝑖𝑡𝑦 𝑓𝑎𝑐𝑡𝑜𝑟 The intensity factor is the annual area growth per capita The last 14 years this intensity factor has been in average 1.6 for all subsectors where area is a relevant parameter This factor is assumed to decrease linearly to 1.0 in 2025 and remain at that level until 2050 UNIK4820

End service demand by end-use (Service sector) Part 3: Energy demand projection End service demand by end-use (Service sector) Energy service demand by end-use is an important premise for calculation of future energy demand The input used for the present calculations are based on: Building regulations Statistics of total energy consumption and areas The reference path includes energy efficiency improvements from: Renovations Estimated effects of the directives of energy labelling of appliances and lighting Key parameters are presented on the next slide UNIK4820

Key data for the service sector Part 3: Energy demand projection Key data for the service sector All numbers in kWh/m2 UNIK4820

Resulting figures (Service sector) Part 3: Energy demand projection Resulting figures (Service sector) The total area of non-residential building will increase from about 90 mill. m² in 2010 to about 133 mill. m² in 2050 with these assumptions The annual new build rate is then in average 2.5% in the beginning of the analysing period declining to 0.7% in 2050 The energy service demand of service will based on these assumptions increase from about 35 TWh in 2010 to 42 TWh in 2050 (see figure next slide) The reference path includes energy efficiency improvements from: Renovations Estimated effects of the directives of energy labelling of appliances and lighting The energy service demand increases by 18% in the reference path Energy efficiency improvements reduce the demand by 4 TWh in 2050 compared to the reference path High population growth: 25% higher energy service demand Low population growth: 16% lower energy service demand UNIK4820

Energy service demand for the service sector (2010-2050) Part 3: Energy demand projection Energy service demand for the service sector (2010-2050) UNIK4820

Part 3: Energy demand projection Industry sector The future Norwegian industrial energy demand is very uncertain and depends on several factors E.g. global demand of important products such as primary metals Price of raw materials International competition Industry demand is highly dependent on a small number of decisions with major impact on total Norwegian energy use The reference path is therefore in principle based on assumptions of constant activities and indicators of all industrial sectors An increase of monetary activities combined with an equal decrease of the indicator, results in the same energy demand Close downs of plants or production increases carried out or decided up to 2014 are included in the projection UNIK4820

Part 3: Energy demand projection Industry: REFerence path = present activity Known close-downs and production increases are included in REF HIGH and LOW activity scenario illustrates uncertainty REF changes after 2010: Close down of: Södra Cell Tofte Norske Skog Follum Peterson Linerboard Moss Hunsfos fabrikker Södra Cell Folla REC Scanwafer Porsgrunn Becromal Increased activity: Hydro Sunndal Ormen Lange Valhall Goliat Gjøa Martin Linge LOW activity: No power from grid to offshore from 2040 Only 2 pulp & paper plants from 2020 Decreased production in primary metals Generally decreased activity HIGH activity: Hydro Karmøy (pilot + full scale prod.) Increased production of primary metals and chemical industry Snøhvit power from grid to train 1 & 2 Utsira electrification New industry activities UNIK4820

Part 3: Energy demand projection Transport sector The projection of transportation demand towards 2050 is based on input to the National transportation plan, done by Institute for Transport Economics The technology development has a great impact on the projection of energy use of transportation Important modelling parameters include: Future investment costs efficiencies Production costs Availabilities of new fuels as hydrogen and biofuels The energy use in transport was 58 TWh in 2010 Transport modes using road (car, freight and bus) represented 60 % of the energy use in transport in 2010 Domestic sea transport represented 22 % of the energy use UNIK4820

Part 3: Energy demand projection Transport sector Part 3: Energy demand projection UNIK4820

Part 3: Energy demand projection Transport REF = National Transportation Plan REF-EE = follow population growth

Part 4: Calculation of energy use UNIK4820

REFerence path and alternatives Part 4: Calculation REFerence path and alternatives UNIK4820

Analysis assumptions Part 4: Calculation Energy prices constant 2016-2050 (purchased energy) One scenario with increasing energy prices based on WEO2013 «Current policy scenario» Present tax policy Energy taxes 2014, constant until 2050 Biodiesel tax = fossil diesel after 2020 Zero emission cars exempted from purchase tax and VAT until 2020 Purchase tax based on CO2-emissions, power and weight until 2050 Other: Discount rate 4 % (higher for some demand technologies) Enova programs until 2020 Direct electric heating restricted as in TEK10 UNIK4820

Part 5: Results Part 5: Model results UNIK4820

Households: - Decreased energy per capita - Energy use increase, but much less than population Part 5: Results Driver Starting value 2050 Persons per household 2.24 2.00 Share of apartments of new dwellings 56% Renovation rate 2.0% Demolition rate 0.3% Floor area new - single family houses - apartments - average 164 m2 93 m2 133 m2 UNIK4820

Part 5: Results Service sector: - Decreased energy per capita - First constant energy use, then increase Driver Starting value 2050 Floor area growth 1.6% 1.0% Renovation rate 2.0% Demolition rate 0.5% UNIK4820

Industry: Constant electricity demand in REF Part 5: Results Industry: Constant electricity demand in REF UNIK4820

Energy use by type of car Part 5: Results Energy use by type of car REFerence Different scenarios UNIK4820

Stationary demand increase by 11%, energy use by 8% Part 5: Results Stationary demand increase by 11%, energy use by 8% Demand < energy use in commercial buildings due to increased use of bioenergy boilers Demand > energy use in households due to increased use of heat pumps Highest difference in demand and use of cars due to considerable improved efficiency Total energy use increase by 13% UNIK4820

Total use of electricity increase Part 5: Results In the reference path electricity use increase by TWh in 2050 compared to today With a high industry activity and no restrictions in use of BEV the electricity use increase by 36 TWh until 2050 With a low industrial activity, high energy prices and low increase in transportation the electricity use will be 6 TWh less in 2050 compared to the present use UNIK4820

Production and trade of power Part 5: Results Wind power production dependent on electricity certificates; 11 TWh in 2020-2030 but no re-investment when the certificates run out Increased hydro power production Net power export all years UNIK4820

Electricity consumption Part 5: Results Electricity consumption UNIK4820

Part 5: Results Final energy use and energy per capita - Statistics past 35 years - Projection next 40 years UNIK4820

Part 5: Results Impact of assumptions UNIK4820