LOW-COST POLICY OPTIONS FOR · Centro de Ciencias de la Atmósfera October 2019 LOW-COST POLICY...

Centro de Ciencias de la Atmósfera October 2019

LOW-COST POLICY OPTIONS FOR

ACHIEVING MEXICO’S NDC AND LONG-

TERM CLIMATE GOALS

Fernando Olea - consultant

– Context

– The EPS model

– Reference scenario and data needs

– Climate policies assessed

– Long-term projection

– Some results

CONTENT

• Allows modelling multiple energy policy

scenarios.

• Evaluates economic benefits and

considers, considering social,

environmental and health co-benefits.

• EPS version version 1.4.2 (2018) has

been implemented in these countries

(India, Canada and California next.)

THE ENERGY POLICY SIMULATOR (EPS) MODEL

https://mexico.energypolicy.solutions/

https://mexico.energypolicy.solutions/scenarios/home

Fuente: Energy Innovation

CALCULATION FLUX

Simplified diagram of the large model components and the calculation flux.

1. Electricity generation

2. Energy consumption in buildings

3. Oil and gas

4. Industry

5. Waste management

6. Agriculture

7. Transport

8. Land use and forestry

EMISSION SOURCES CONSIDERED

Industry

Buildings

Transport

Land use

Electricity

• CO2e emissions total and by sector

• Criteria pollutant emissions

• Energy balance by source and technology

• Power generation capacity by technology

• Fuel consumption

• Changes in infrastructure investments and operation costs

• Health benefits from pollution abatement

• Co-benefits on public health

MODEL OUTCOMES

-

200

400

600

800

1,000

1,200

2015 2020 2025 2030

Source: Presentation of NDCs SRE/SEMARNAT (March 2015) and linear intrapolation,

Source: WRI, Energy Policy Simulator Mexico v.1.4.1

EPS REFERENCE TRAJECTORY

• EPS model runs against a

“reference scenario”, similar to

an emissions baseline.

• Based on the National

Emissions Inventory 2015 and

current energy prospective

studies (2017-2031)

• Less growth in emissions that

NDC baseline from new data

and mitigation actions

• Emissions projected at 901

MtCO2e in 2030 (71 Mton

difference, 7%)

972

672

792

GHG emissions, MtCO2e

772

901

762

623

737

741

-

100

200

300

400

500

600

700

800

900

1,000

2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

Land Use

Agro

Waste

Industry

Transport

Buildings

Electricity

Oil&Gas

Source: WRI, Energy Policy Simulator México v.1.4.1

SECTORIAL REFERENCE SCENARIO


0

100

200

300

400

500

600

700

800

900

1000

2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

Land Use

Agro

Waste

Industry

Transport

Buildings

Electricity

Oil&Gas


APPLYING MITIGATION POLICIES


Conditional

NDC scenario

with mitigation

policies across

sectors

0

100

200

300

400

500

600

700

800

900

1000

2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

Land Use

Agro

Waste

Industry

Transport

Buildings

Electricity

Oil&Gas


CONDITIONAL NDC SCENARIO

737 737

635


EPS NC, 691

EPS Cond, 552

-

200

400

600

800

1,000

1,200

1,400

2015 2020 2025 2030 2035 2040 2045 2050

Source: NDCs Presentation SRE/SEMARNAT (March 2015) and linear intrapolation


LONG-TERM REFERENCE SCENARIO (2050)


972

672

901 762

623 737

1,075

1,310

• Projected emissions reach

1,310 MtCO2e in 2050


LONG-TERM REFERENCE SCENARIO (2050) Criteria pollutant emissions, Mt

CH4 EmissionsN2O EmissionsCO Emissions

OC EmissionsBC Emissions

PM10 Emissions

PM25 Emissions

NOx EmissionsSOx Emissions0

100

200

300

400

500

600

20172018

20192020

20212022

20232024

20252026

20272028

20292030

20312032

20332034

20352036

20372038

20392040

20412042

20432044

20452046

20472048

20492050



CH4 Emissions

N2O Emissions

CO Emissions

NOx EmissionsSOx Emissions

0

2

4

6

8

10

12

20172018

20192020

20212022

20232024

20252026

20272028

20292030

20312032

20332034

20352036

20372038

20392040

20412042

20432044

20452046

20472048

20492050


LONG-TERM NDC SCENARIO (2050) Criteria pollutant emissions, Mt



PM10 Emissions

PM25 Emissions


100

200

300

400

500

600

20172018

20192020

20212022

20232024

20252026

20272028

20292030

20312032

20332034

20352036

20372038

20392040

20412042

20432044

20452046

20472048

20492050



PM10 Emissions

PM25 Emissions


50

100

150

200

250

300

350

400

450

500

20172018

20192020

20212022

20232024

20252026

20272028

20292030

20312032

20332034

20352036

20372038

20392040

20412042

20432044

20452046

20472048

20492050



CH4 Emissions

N2O Emissions

CO Emissions

NOx EmissionsSOx Emissions

0

2

4

6

8

10

12

20172018

20192020

20212022

20232024

20252026

20272028

20292030

20312032

20332034

20352036

20372038

20392040

20412042

20432044

20452046

20472048

20492050

CH4 Emissions

N2O Emissions

CO Emissions

NOx Emissions

SOx Emissions

0

2

4

6

8

10

12

20172018

20192020

20212022

20232024

20252026

20272028

20292030

20312032

20332034

20352036

20372038

20392040

20412042

20432044

20452046

20472048

20492050


REFERENCE SCENARIO


-

200

400

600

800

1,000

1,200

1,400

201

7

201

8

201

9

202

0

202

1

202

2

202

3

202

4

202

5

202

6

202

7

202

8

202

9

203

0

203

1

203

2

203

3

203

4

203

5

203

6

203

7

203

8

203

9

204

0

204

1

204

2

204

3

204

4

204

5

204

6

204

7

204

8

204

9

205

0

Land Use

Agro

Waste

Industry

Transport

Buildings

Electricity

Oil&Gas

– Land use 12 2%*

– Agriculture 201 27%

– Waste 98 13%

– Transport 318 43%

– Industry 210 28%

– Buildings 48 7%**

– Electricity 211 29%*

– Oil and gas 212 29%

– Total 1,310

* Decrease vs. 2017

** Decelerates


COMPARATIVE OF EMISSIONS

ESCENARIO DE REFERENCIA

Sector 2017 2030 2050

Buildings 55 8% 53 6% 48 4%

Transport 158 22% 199 22% 318 24%

Electricity 155 21% 161 18% 211 16%

Oil&Gas 94 13% 137 15% 212 16%

Industry 90 12% 140 16% 210 16%

Waste 48 7% 63 7% 98 7%

Agro 113 15% 129 14% 201 15%

Land Use 22 3% 18 2% 12 1%

TOTAL 737 901 1310

Crecimiento porcentual v.2017 22% 78%

0

200

400

600

800

1000

1200

1400

201

7

201

8

201

9

202

0

202

1

202

2

202

3

202

4

202

5

202

6

202

7

202

8

202

9

203

0

203

1

203

2

203

3

203

4

203

5

203

6

203

7

203

8

203

9

204

0

204

1

204

2

204

3

204

4

204

5

204

6

204

7

204

8

204

9

205

0

Land Use

Agro

Waste

Industry

Transport

Buildings

Electricity

Oil&Gas


ABATEMENT BY 2050 – NDC SCENARIO


737 737

635 676

754

EXAMPLE OF POLICY LEVERS: TRANSPORT

• Incentives for electric vehicles (EV) (dedicated lanes, preferential parking, recharge point benefits).

• Mandate on EV sales

• Subsidy to EVs

• Feebates – revenue neutral charge on efficiency

• Vehicle efficiency standards

• Low-carbon fuel standard

• Transport demand management: improving public transportation, non-motorized transportation

Source: WRI, Energy Policy Simulator Mexico v.1.4.1

MARGINAL ABATEMENT COST CURVE –

NDC SCENARIO 2050

Figure 7. Conditional NDC Scenario—Marginal Abatement Cost Curve through 2050 (NPV)

COLUMN WIDTH (x-axis) COLUMN HEIGHT (y-axis)

Policy Group Annual average abatement potential [MtCO2e] Cost effectiveness [$/tCO2e]

Transportation Demand Management 16 -132.62

Cogeneration and Waste Heat Recovery 5 -76.1

Industry Energy Efficiency Standards 31 -69.83

Subsidy for Electricity Production 20 -59.02

Renewable Portfolio Standard 10 -33.65

Early Retirement of Power Plants 1 -31.46

Vehicle Fuel Economy Standards 32 -22.46

Feebate 7 -10.23

Livestock Measures 30 -1.49

Reduce F-gases 16 -0.24

Improved Forest Management 4 0.34

Cement Clinker Substitution 8 0.76

Forest Set-Asides 8 9.73

Low Carbon Fuel Standard 10 9.87

Cropland Management 4 14.85

Afforestation and Reforestation 5 14.91

Carbon Tax 58 15.2

Distributed Solar Promotion 20 15.42

Methane Capture and Destruction 50 16.55

Building Energy Efficiency Standards 9 17.15

Industrial Fuel Switching 12 25.71

Building Component Electrification 10 30.07

• Light vehicle transition to new technologies reaches only 2.8% by 2030, but

grows to 17% in 2050.


VEHICLE ELECTRIFICATION

18,13 18,74

32,40

18

20

22

24

26

28

30

32

34

2017 2020 2023 2026 2029 2032 2035 2038 2041 2044 2047 2050

Mill

on

es d

e ve

híc

ulo

s

Light-duty vehicles

0,10% 1,25% 6,75% 0,85% 1,42% 3,38%

99,03% 95,79% 79,62%

0,02% 1,51% 10,22%

2017 2030 2050

Composition by type of technology

Híbridos Diésel Gasolina Gas natural Eléctricos


ENERGY TRANSITION

341,29

578,69

298,17

399,33

674,05

280

330

380

430

480

530

580

630

680

2017 2022 2027 2032 2037 2042 2047 2052

TWh

/añ

o

Electricity generation

Condicionado Referencia

0,42%

20,71% 19,37%

0,22%

16,49% 30,54%

5,20%

8,89%

10,13%

17,52%

18,00%

11,78%

2,24%

1,62% 0,92%

18,84%

6,39%

3,77% 2,14% 38,37%

28,36% 24,56%

8,29% 1,20%

2017 2030 2050

Installed capacity (GW) Carbón

Gas Natural (non-peaker)Gas Natural(peaker)Petróleo

Nuclear

Hidroeléctrica

Eólica (offshore)

Eólica (onshore)

Solar PV

Solar PVDistribuidaBiomasa

7% 46% 60%

Renewable energy penetration


STATISTICAL HUMAN DEATHS AVOIDED FROM

ABATEMENT OF CRITERIA POLLUTANTS

27.257

48.968

0

5.000

10.000

15.000

20.000

25.000

30.000

35.000

40.000

45.000

50.000

2017 2020 2023 2026 2029 2032 2035 2038 2041 2044 2047 2050

Accumulated statistical deaths avoided from abatement of particulate matter concentration

Thank you GRACIAS

Dr. Andrés Flores Montalvo Director de Cambio Climático y Energía

World Resources Institute México [email protected]

www.wrimexico.org

Ing. Fernando Olea Tinoco

Consultant World Resources Institute

[email protected]

mailto:[email protected]

mailto:[email protected]

• The EPS model evaluates the effects of 58 energy and

environmental policies with various metrics, such as:

– Emission of 12 pollutants

– Cash flows of government, enterprises and consumers

– Composition of the electricity generation matrix

– Use of fuels

– Social and health benefits of pollutant emission reduction.

• The EPS runs on Vensim, a system dynamics platform. EPS models

energy use processes and the economy as an open, changing and

non-equilibrium system.

Source: Energy Innovation

MODEL ARCHITECTURE

SECTORS (1/2)

EPS considers as “Industry” the following sectors: • Oil and gas • Industry • Agriculture and livestock • Waste management

Industry

Energy consumption in buildings: • Urban residential • Rural residential • Commercial (including public buildings )

Buildings

Fuel demand and emissions from public and private transportation, for all road and non-road vehicles including trains, planes and boats. Road transport is divided into: • Light duty and heavy transport • Passenger vehicles and trucks • Motorcycles

Transport

SECTORS (2/2)

Emissions and carbon sinks from land use changes and forest action. Land use

Assesses emissions and costs of satisfying electricity demand of sectors (industry, buildings and transport), at the least cost while taking into account operation policy, technical and political limitations.

Electricty generation

The carbon capture and storage (CCS) module impacts fuel emissions from industry and increases energy demand (required by CCS itself, if technology is available

CCS

This module is not used in Mexico; it is used to model large scale residential and commercial heating systems. It is linked to the industrial sector, allowing the modeling synergies between electric generation and thermal cogeneration.

Urban heating

LOW-COST POLICY OPTIONS FOR · Centro de Ciencias de la Atmósfera October 2019 LOW-COST POLICY...

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