Copyright 2009 ITRI 工業技術研究院 Taiwan's GHG Mitigation Potentials and Costs: An Evaluation with the MARKAL Model Ssu-Li, Chang Professor, Institute of Natural Resource Management, National Taipei University, Taiwan Miao-Shan, Tsai* Researcher, Industrial Technology Research Institute, Taiwan PhD student, Institute of Natural Resource Management, National Taipei University, Taiwan Tzu-Yar, Liu Lead Engineer, Industrial Technology Research Institute, Taiwan IEW2012, Cape Town, Jane 19-21, 2012 * Corresponding author

Copyright 2008 ITRI 工業技術研究院 建議字型：中文微軟正黑體，英文 Arial Outline Introduction MARKAL-Taiwan Model International GHG Reduction Trend Scenarios and Assumptions Simulation Results Discussions Conclusions 2

Copyright 2008 ITRI 工業技術研究院 建議字型：中文微軟正黑體，英文 Arial Introduction (1/2) Taiwan is an island that lacks natural energy resources. It relied on imported energy for 99.30% of its total supply, which comprises 91% fossil fuels and only 0.25% of renewable energy (MOEABOE, 2011). Taiwan ranked 23rd in the world for countries with the highest CO 2 emission countries (IEA, 2011) Source: MOEABOE, 2011.

Copyright 2008 ITRI 工業技術研究院 建議字型：中文微軟正黑體，英文 Arial Introduction (2/2) Copenhagen Accord asks –The Annex I countries to submit quantitative reduction commitment for 2020 –The non-Annex I countries to submit Nationally Appropriate Mitigation Actions (NAMAs) Taiwan also announced its NAMAs to international community –CO 2 reduction target: 30% lower than REF in 2020 Objective –Utilize MARKAL model to evaluate emission reduction on Taiwan’s electricity, industrial, buildings, and transportation sectors. 4

Copyright 2008 ITRI 工業技術研究院 建議字型：中文微軟正黑體，英文 Arial The Reference Energy System MARKAL-Taiwan Model 5 75 processes technologies 63 generation technologies 256 demand technologies

Copyright 2008 ITRI 工業技術研究院 建議字型：中文微軟正黑體，英文 Arial International GHG Reduction Trend (1/2) International Low Carbon Society Scenario in 2025 –CO 2 Target: Lower than REF 0.7%~22%, lower than 2005 level 11%~32% –Energy intensity: 0.13~0.61 toe/US$ –Energy per capital: 1.96~7.6 t CO 2 /per capita 6 WEO-2011AEO-2011Japan-2009 Korea New Policies Scenario 450 Scenario No Sunset Extended Policies Technology Advance Technology Advance (nine new nuclear plants) Technology Advance (substantial CO 2 emission reduction) (Energy intensity) CO 2 target lower than REF (%) lower than 2005 (%) average energy demand growth rare (%) 1.5 Similar to REF 7% lower than REF -0.1% energy intensity in 2025 (toe/US$) energy per capital in 2025 (tons/per capita)

Copyright 2008 ITRI 工業技術研究院 建議字型：中文微軟正黑體，英文 Arial Energy Structure in 2025 –WEO-2011 scenario: coal is the largest energy –AEO-2011, Japan-2009, and Korea-2008 scenarios: oil is the largest energy 7 International GHG Reduction Trend (2/2) Source: IEA(2011), USEIA(2011), NIES(2009), Korea(2008).

Copyright 2008 ITRI 工業技術研究院 建議字型：中文微軟正黑體，英文 Arial Assumptions in MARKAL model Scenarios and Assumptions (1/3) 8 Taiwan Import Energy PriceTaiwan Industrial Structure (%) Average GDP (%/year) REF GDPL Population (%/year) Household (%/year) YearFirstSecondaryTertiary Year Crude oil (US2007/bl) Coal (US2007/t) Coke (US2007/t) LNG (US2007/t)

Copyright 2008 ITRI 工業技術研究院 建議字型：中文微軟正黑體，英文 Arial Scenarios and Assumptions (2/3) Key Scenario Assumptions 9 REFGDPLCH30CHAMCL30CLAM GDP Average grow rate 3.54%/y from 2009 to 2025   Average grow rate 3.14%/y from 2009 to 2025   CO2 emission target 30% lower than in REF in   Largest reduction amount in 2020   Return to 2000 emission level (214 Mt) in 2025  LNG maintain at 2008’s level(822 Mt)  up to 1400 Mt in 2020  Renewable energy Maintain at 2008’s level: total MW  Accumulated installed capacity is 6,388MW in 2020 

Copyright 2008 ITRI 工業技術研究院 建議字型：中文微軟正黑體，英文 Arial REFGDPLCH30CHAMCL30CLAM Energy saving Energy tech. efficiency improve 0.4%/yr from 2009 ~ 2025  high efficiency technology  Nuclear energy NPP1~ NPP3 normal decommission- ing  NPP 1~ NPP3 extend service  NPP4 is deemed as the reduction measure  NPP4 operation  Coal-fired unit installed with CCS (carbon removal efficiency 90%) device  10 Scenarios and Assumptions (3/3)

Copyright 2008 ITRI 工業技術研究院 建議字型：中文微軟正黑體，英文 Arial Simulation results (1/8) CO ­2 emission pathways in each scenario 11

Copyright 2008 ITRI 工業技術研究院 建議字型：中文微軟正黑體，英文 Arial Simulation results (2/8) Energy Supply Structure –The Energy supply growth rate from 2008 to 2025 REF and GDPL: 1.8%/y~2.4%/y Four reduction scenarios: 1.3%/y ~1.5%/y –The reduction scenario’s Total energy supply in 2020 and 2025 are reduced by about 12% relative to REF. Coal and oil demand proportion more than 87% in REF, thus the proportion of reduction scenario must be reduced to 73% ~ 76%. 12

Copyright 2008 ITRI 工業技術研究院 建議字型：中文微軟正黑體，英文 Arial Simulation results (3/8) Power generation structure –Electricity demand growth rate The REF and GDPL scenarios: 3.7%/y ~5.6%/y till 2025 Four reduction scenarios decrease to 2%/y ~2.6%/y –Increase electricity consumption ratio through fuel change choices. Nuclear, gas or coal power generation as the base load unit. 13

Copyright 2008 ITRI 工業技術研究院 建議字型：中文微軟正黑體，英文 Arial Simulation results (4/8) Sector energy demand in 2025 –Industry: REF and GDPL scenarios: the oil ratios provided 22.3% Reduction scenarios: the oil ratios provided 30% 14 Industry Sector

Copyright 2008 ITRI 工業技術研究院 建議字型：中文微軟正黑體，英文 Arial Simulation results (5/8) –Buildings: REF and GDPL scenarios: electricity provided 71% Reduction scenarios: Natural gas will replace electricity and oil is due to natural gas target. Buildings Sector

Copyright 2008 ITRI 工業技術研究院 建議字型：中文微軟正黑體，英文 Arial –Transport: REF and GDPL scenarios: Traditional fossil oils provided 97% Reduction scenarios: Traditional fossil oils are replaced under given biomass energy targets in order to reduce the greenhouse gas emissions Simulation results (6/8) 16 Transport Sector

Copyright 2008 ITRI 工業技術研究院 建議字型：中文微軟正黑體，英文 Arial Simulation results (7/8) Total incremental cost in Reduction scenarios –2015: increases 27% relative to REF –2020: increase 20%~21% relative to REF –2025: increase 2%~7% relative to REF –the accumulated incremental cost will be 9%~14% relative to REF. 17

Copyright 2008 ITRI 工業技術研究院 建議字型：中文微軟正黑體，英文 Arial Simulation results (8/8) CO 2 Index in Reduction Scenarios –The per capita emission in 2020 are between 11.1~14.4 tons/per capita, and 9.5 tons/ per capita in –The emission intensity are between 0.46~0.54 g/US$ in 2020, and between 0.31~0.33 g/US$ in –The energy intensity in 2020 are between 0.23~0.28 toe/US$ and 0.22 toe/US$ in YearREFGDPLCLAMCHAMCL30CH30 Energy CO 2 Total Amount (Mt) Per Capita Emission of CO 2 (tons/ per capita) Emission Intensity (g/US$) Energy Intensity (toe/US$)

Copyright 2008 ITRI 工業技術研究院 建議字型：中文微軟正黑體，英文 Arial Discussions (1/2) The energy demand growth rate –REF and GDPL scenarios : more than 1.8%/y –Reduction scenario: decreases to 1.4%/y, close to the growth rate in WEO CO 2 reduction ratio –In 2025 a decrease of 56~60% relative to the baseline scenarios, and decrease of 15% relative to 2005 level –This result is higher than Kyoto targets of Annex I countries, and also higher than reported in WEO-2011 and AEO-2011 scenarios. The total incremental cost –The accumulated incremental cost will be 9%~14% relative to REF. 19

Copyright 2008 ITRI 工業技術研究院 建議字型：中文微軟正黑體，英文 Arial Discussions (2/2) Energy intensity –Taiwan’s is higher than in WEO-2011, AEO-2011, and Japan scenarios –Near Korea-2008 scenario the Per capita emission –Taiwan’s is also higher than WEO-2011 and AEO-2011 scenarios Because –98% of Taiwan’s energy system relies on imports from oversea sources –Limited natural endowments of domestic renewable energy –Limitation of imported natural gas –Nuclear power and oil accounts for high proportions in energy demand structure –Renewable energy only accounts for a small ratio in power generation structure 20

Copyright 2008 ITRI 工業技術研究院 建議字型：中文微軟正黑體，英文 Arial Conclusions Taiwan CO 2 reduction target is higher than in both WEO scenario and AEO scenario Taiwan total accumulated incremental cost increase will be 9%~14% relative to REF For Taiwan, it is very difficult to reach the reduction target just by relying on mitigation technology. It is also necessary to allow Taiwan to participate in international flexible mechanisms. Such participation will also benefit the international community’s GHG reduction efforts tremendously. 21

Copyright 2008 ITRI 工業技術研究院 建議字型：中文微軟正黑體，英文 Arial Acknowledgements We would like to thank the Bureau of Energy for financial support in building Taiwan MARKAL model. We thank Yu-Feng Chou, Jing-Wei Kuo, Kuei-Lan Chou, Ming-Lung Hsu, and Shu-Yi Ho of MARKAL working group in Industrial Technology Research Institute (ITRI) for the research reported here. We thank Dr. Wei Ming Huang for his valuable suggestions. Also we thank Jin-Shiuan Li, Ming-Chih Chuang, Chin- Wei Wu, Chi-Liang Tsai, Su-Chen Weng of Bureau of Energy for additional support. 22

Copyright 2009 ITRI 工業技術研究院 Miao-Shan, Tsai Researcher Green Energy & Environment Research Laboratories Industrial Technology Research Institute 23

Copyright 2008 ITRI 工業技術研究院 建議字型：中文微軟正黑體，英文 Arial Appendix 24

Copyright 2008 ITRI 工業技術研究院 建議字型：中文微軟正黑體，英文 Arial Model Background ITRI established MARKAL-Taiwan model since 1993 supported by ETSAP Outreach Program and Bureau of Energy, Ministry of Economic Affairs. Major Application –The annual energy outlook –The main analytic results includes : Energy supply outlook, Energy demand outlook, Power capacity, Electricity Structure, Energy intensity, CO 2 intensity, Per capita CO 2 emission. To evaluate the benefits and costs of CO 2 mitigation strategies, and make comparison with other nations. To analyze the impacts of energy conservations and renewable energy development strategies on the future energy structure and GHG emissions of Taiwan. 25