1. R. Loulou & A.Ricci - 17/02/09 KANLO Integrated Framework for Sustainable Energy Policies, current and future (the integrated NEEDS toolbox) SIXTH FRAMEWORK PROGRAMME [6.1] [ Sustainable Energy Systems] Richard Loulou, Kanlo & Andrea Ricci, ISIS Brussels, 17.2.2009

2. R. Loulou & A.Ricci - 17/02/09 KANLO 2 A View on NEEDS achievements Developed and implemented concepts and databases for the full cost, full life cycle analyses for a number of key energy technologies Developed an integrating framework to look at energy technologies and at European socio-economics, as a single European Energy System rather than as separate objects Outlined and demonstrated ‘full cost’ analysis of the EU system that internalizes externalities Demonstrated the use of such a tool on a few key socio- economic-energy-environment scenarios Established an important platform for future refinements and enhancements of full cost analyses

3. R. Loulou & A.Ricci - 17/02/09 KANLO I. NEEDS Integrated Tool Box

4. R. Loulou & A.Ricci - 17/02/09 KANLO 4 What to integrate/harmonise? 1.Socio-economic fundamentals (POP, GDP, tech. progress) 2.Common Technology Database 3.Life Cycle Data (energy, materials, emissions, direct costs) 4.External costs (cost of damages from ‘emissions’) 5.Coherent Technology Pathways 6.Risk and Other Social Indicators not captured above

5. R. Loulou & A.Ricci - 17/02/09 KANLO 5 HARMONIZING & INTEGRATIVE INTERACTIONS 1. SOCIO-ECONOMIC & ENVIRONMENTAL SCENARIOS + 2. TECHNOLOGICAL DATA 5. TIMES MODEL & DB 3. LIFE CYCLE DATA OF TECHNOLOGIES 6. MODELING COHERENT ENERGY- TECHNOLOGY PATHWAYS 7. OTHER INDICATORS OF STAKEHOLDERS PERSPECTIVES 4. EXTERNAL COSTS OF TECHNOLOGIES

6. R. Loulou & A.Ricci - 17/02/09 KANLO 6 1. Socio-economic drivers The main Drivers are obtained from a Global CGE model (GEM-E3) Population, Households: growth rates Technical progress (e.g. exogenous energy efficiency improvements) Sectoral outputs growth rates The Linkage to the TIMES Pan EU Model (PEM) Demand trajectories for energy services are calculated from the Drivers Energy resources and reserves are established Calibration to initial year’s energy system is effected Existing Environmental Policies (emission caps, taxes, measures) are incorporated into the TIMES Model’s database

7. R. Loulou & A.Ricci - 17/02/09 KANLO 7 2. Technology database List of (EPG only) technologies. For each existing and future technology: Dates of availability, technical life, limits to penetration Energy related characteristics (efficiencies, utilization factors, seasonal availabilities,..) Unit costs (capital, annual) for construction, operation, and dismantling Construction and dismantling lead-times (if applicable) Emissions per unit of investment, dismantling, operation CONSTRUC TION OPERATION & MAINTENANCE Energy and Emissions Energy and Materials Energy & Materials Energy & Materials Energy, Materials & Emissions DISMANTL ING

8. R. Loulou & A.Ricci - 17/02/09 KANLO 8 3. Life Cycle Information Approach: Energy, materials, and emission coefficients linked to: Construction; Operation; Dismantling, Per unit of each technology considered In NEEDS, we obtained emission coefficients for Construction and Dismantling, others were already accounted for in the PEM

9. R. Loulou & A.Ricci - 17/02/09 KANLO 9 4. External Costs Primary Substances emissions Secondary substances Impacts (air quality, health, environment) Monetization (damage costs) Inputs to TIMES: 1. Obtain Exernal costs per unit of emission of each type (when this emission is modeled in TIMES) OR 2. Obtain external costs incurred per unit of a technology (when this type of emission is not modeled in TIMES) Important remarks: Valid if cost is a (locally) linear function of emissions. However, non-linear but convex function is also OK.

10. R. Loulou & A.Ricci - 17/02/09 KANLO 10 5. Augmented common technical database List of energy technologies in all sectors, existing and future. For each technology: Dates of availability, technical life, limits to penetration Energy related characteristics (efficiencies, utilization factors, seasonal availabilities,..) Unit costs (capital, annual) at construction, operation, and dismantling Construction and dismantling lead-times (if applicable) Emissions per unit of capacity, operation, investment External cost per unit of EPG technology, due to construction External cost per additional unit of emission (each substance)

11. R. Loulou & A.Ricci - 17/02/09 KANLO 11 6. Coherent technological Pathways AUGMENTED TECHNOLOGY DATABASE SOCIO-ECONOMIC AND ENVIRONMENTAL SCENARIO PAN-EU MODEL (TIMES) TECHNOLOGY, FUEL, & TRADE PATHWAY AS MANY PATHWAYS AS THERE ARE SCENARIOS

12. R. Loulou & A.Ricci - 17/02/09 KANLO 12 Coherent pathways TIMES constructs a coherent technology and fuel pathway for the inter-connected EU countries, by optimizing technology, fuel, and trade choices over the entire horizon, taking into account life-cycle energy and emissions, and external costs. The model calculates a least cost equilibrium solution for the entire system. The need for iterating between energy model and LCA/External cost calculations is eliminated. However, other indicators influencing technology selection (risk, other social indicators) are not yet taken into consideration. CAVEAT: Since LCA and External Costs were provided only for EPG technologies, the other TIMES technologies have a cost advantage...

13. R. Loulou & A.Ricci - 17/02/09 KANLO II. From NEEDS onwards

14. R. Loulou & A.Ricci - 17/02/09 KANLO 14 NEEDS as stepping stone The model and data developed in NEEDS are crucial for future work on the EU energy system. The NEEDS investment has already produced a number of spinoff projects, inspired new research, and allowed new accomplishments

15. R. Loulou & A.Ricci - 17/02/09 KANLO 15 Current EU Projects (& Proposals) using Pan-EU TIMES models RES2020: 2007-2009: Focus on renewable energy for EU at horizon 2020 and beyond PLANETS: 2008-2010: Focus on advances on how to deal with uncertainty in global and EU Climate Policies REACCESS: 2008-2010; Focus on Security of Energy Supply for EU at horizon 2050 REALISEGRID: 2008-2010: Focus on Intra-EU (+ Balkans) Electricity Exchanges and Infrastructure ADAPTER: proposal: Focus on integrating Impacts and Adaptation in EU Climate Policies RAGTIMES: proposal: Integration of uncertainty and adaptation measures in the Climate economics and policy framework for the EU.

16. R. Loulou & A.Ricci - 17/02/09 KANLO The way forward: RTD Extension/harmonisation of LCA, externalities valuation and stakeholders perspective to all energy technologies (e.g. heating) New dispersion models and new background emission scenarios to account for non linearities of ER functions Further reduce uncertainties in the assessment of both physical phenomena and their monetary valuation (e.g. damage costs of climate change) Fresh (original) evidence on health and mortality effects in NMS and non-EU countries (limited transferability) More robust quantification of “soft” sustainability indicators (e.g. social ) Further integration of “non monetizable” dimensions (e.g. risk comfort, etc.) in coherent anlytical framework (e.g. through iterative approaches, or through Multi Objective Decision Analysis) …

17. R. Loulou & A.Ricci - 17/02/09 KANLO The way forward: exploitation and dissemination Additional scenarios to account for emerging policy priorities and developments (e.g. extension of ETS, enanced decentralization/integration of energy systems, etc.) Incorporating feedback from stakeholders analysis into externality valuation and modelling (iterations) From Pan-EU to worlwide modelling Further dissemination => better understanding and wider use of externalities estimates by policy and decision makers …