Is a 100% renewables electricity system compatible with the UK’s Paris Agreement commitments?

Back in January we hosted a brilliant seminar from Ms Habiba Daggash of the Centre for Environmental Policy on her work looking at the need for large-scale carbon dioxide removal and the whether 100% renewables would help meet those targets set in Paris back in 2015.  She written us this blog post for anyone who missed the talk.

Climate change has become a fixture in global political discourse since the 2015 Paris Agreement. Through the accord, most nations committed to limiting global temperature rise to 2°C, and to make efforts to further restrict it to 1.5°C. To achieve this, cumulative global greenhouse gas (GHG) emissions must be limited to 590-1240 billion tonnes of CO2 (GtCO2) between 2015 and 21001. Due to inaction on climate change mitigation, it is estimated that this budget will be exhausted between 2040 and 20702. Consequently, in addition to conventional mitigation measures (switching to low-carbon energy sources, improved energy efficiency and land management, etc.), the deployment of carbon dioxide removal (CDR) technologies is critical to compensate for an overshoot of the carbon budget.

CDR is the direct or indirect removal of CO2 from the atmosphere3. A range of land-based and ocean-based techniques have been proposed but with the exception of afforestation/reforestation (AR) which has been achieved at scale, they remain largely theoretical3,4. Bioenergy with carbon capture and storage (BECCS)5 and direct air capture and storage (DACS)6—the direct extraction of CO2 from air using a range of sorbents—have since been demonstrated as technological options for CDR.

Integrated Assessment Models (IAMs)—models that determine possible decarbonisation pathways—have estimated that, in addition to afforestation/reforestation (AR), 430-740 GtCO2 of cumulative CDR must achieved by 21007. 20-70 GtCO2 is expected to be provided by the European Union (EU)7. How much CDR is delivered by individual countries—the level at which climate policy is implemented—is not known because the EU is not further geographically-disaggregated in the models. In this study we: 1) quantified the country-level CDR burdens for the EU according to established fairness principles, and 2) assessed the implications of CDR burdens on electricity system transitions, using the UK as a case study.

We assume that CDR burden are allocated to EU countries relative to their responsibility for climate change, i.e. in proportion to their historic emissions. The UK is responsible for 14% of the EU’s historic emissions8, therefore would be expected to deliver 2.8-9.8 GtCO2 of cumulative CDR by 2100. We model the national electricity system using the ESO-XEL model9. ESO-XEL determines the least-cost evolution of power supply capacity that will maintain system reliability and operability throughout the planning horizon (2015 to 2100), and meet CDR burdens.

We find that until 2050, decarbonisation objectives are satisfied by displacing fossil fueled generation with intermittent renewable energy sources (IRES). The increased variability of energy supply necessitates the expansion of interconnection and energy storage capacity; 30 GW of import and storage capacity are added by 2050. Up to 40 GW of gas-fired power plants, both unabated and abated (with CCS) remain in the system to provide crucial ancillary services. After the existing stock nuclear power reaches the end of its lifetime, 4-18 GW of new build nuclear is added. These highlight the importance of dispatchable low-carbon power as IRES penetration rises in a carbon-constrained electricity system.

After 2050, the deployment of BECCS and DACS becomes necessary to deliver the required CDR. 16-40 GW of BECCS and 3-6 GW of DACS are deployed by 2100 to meet the lower- and upper-bound CDR burdens, respectively. Together they provide 159-358 MtCO2/yr of CDR by the end of the century. Simultaneously, IRES built in the 2020s begins to reach the end of their operational lifetimes. Instead of being replaced by new build IRES, it proves cheaper to replace old capacity with thermal generation (from gas and nuclear) to complement BECCS. This is a result of several factors: retirement of old fossil and IRES plants, combined with rising demand means there is a significant capacity shortfall to be replaced; energy storage and import capacity are maximally deployed so further grid flexibility is unavailable; technology learning has resulted in cheaper CCS plants which provide firm low-carbon power. Fig. 1 illustrates the evolution of the UK electricity system from a low-carbon system dominated by IRES to a negative-carbon system dominated by thermal plants.

Figure 1: Least-cost evolution of the UK’s electricity supply from 2020 to 2100 (as projected by the ESO-XEL model) when CDR burden consistent with the Paris Agreement are met. Historical evolution from 1920 to 2017 is also shown.

Favorable policies and incentives have resulted in cheaper IRES, to the extent that small-scale or isolated power systems are viable. Consequently the decentralisation energy services is often cited as a feature of the low-carbon transition. However, this study has shown that to deliver CDR burden consistent with the Paris Agreement, a system dominated by thermal generation (mostly from BECCS and CCGT-CCS plants) is necessary. Such a system is inherently centralised and requires extensive power transmission and distribution networks. Pursuing decentralisation in the near-term may therefore result in the disintegration of infrastructure that appears critical in the long-term.

It has been recognised that emitting CO2 imposes a cost of society, i.e. the social cost of carbon. It follows therefore that CO2 removal is a public good, and therefore should be appropriately remunerated. Current carbon pricing regimes however do not remunerate the service of CDR. We introduce the concept of a ‘negative emissions credit (NEC)’ as a payment for the net removal of a tonne of CO2 from the atmosphere. A cash flow analysis was then carried out to determine the credit required by BECCS and two archetypes of DACS (DACS-CW and DACS-CE) to achieve internal rates of return that allow for commercial viability. For a first-of-a-kind (FOAK) BECCS plant, a NEC of £52/tCO2 is required in addition to revenue for electricity sales to meet an IRR of 4% (typical for regulated assets). For a similar return, FOAK DACS plants require £176-342/tCO2. Therefore, although the value of CDR to deep decarbonisation has been shown, the technologies that deliver the service are currently not commercially-viable. Policy must therefore adequately incentivise them to attract investment and encourage innovation to avoid lock-in to a power system that is unable to meet decarbonisation objectives.

Figure 2: Variation in the internal rate of return achieved by BECCS and DACS plants when they are credited for CDR via a negative emissions credit. The variation in the social cost of carbon (SCC) with time is also shown.

What next?

My research has thus far focused on the implications of the Paris Agreement on electricity systems transitions in the UK. I will now shift focus to understand the implications of the Paris accord on energy system transitions in developing countries, using Nigeria as a case study. Nigeria is projected to be the third most populous country in the world by the end of the century, majority of which will be youth (under 30). This demographic explosion and the pursuit of industrialisation for economic development will result in a significant rise in energy demand. Should Nigeria decide to rely on its abundant reserves of fossil fuels (as currently planned), it would undoubtedly result in significant GHG emissions—at odds with its commitment to the Paris Agreement.

Habiba Daggash

Habiba DaggashHabiba is a third year PhD student at the Centre for Environmental Policy and the Grantham Institute – Climate Change and the Environment. She is part of the Clean Fossil and Bioenergy group  under the supervision of Dr Niall Mac Dowell.

Her research focuses on the implications of climate change mitigation objectives on energy system transitions, within the context of geopolitical constraints. She has published articles on the potential of carbon dioxide removal technologies in decarbonising transport and power sectors of the UK.

Habiba holds Bachelor’s and Master’s degrees in Engineering Science from the University of Oxford. She is also the current Chair of IChemE Energy Centre’s Future Leaders Group and serves on the board of the centre.

References

  1. Rogelj, J. et al. Differences between carbon budget estimates unravelled. Nat. Clim. Chang. 6, 245–252 (2016).
  2. Rogelj, J. et al. Paris Agreement climate proposals need a boost to keep warming well below 2 °c. Nature (2016). doi:10.1038/nature18307
  3. Minx, J. C. et al. Negative emissions – Part 1: Research landscape and synthesis. Environ. Res. Lett. 13, (2018).
  4. Fuss, S. et al. Negative emissions – Part 2: Costs, potentials and side effects. Environ. Res. Lett. 13, (2018).
  5. Fajardy, M. & Mac Dowell, N. Can BECCS deliver sustainable and resource efficient negative emissions? Energy Environ. Sci. 10, 1389–1426 (2017).
  6. Keith, D. W., Holmes, G., St. Angelo, D. & Heidel, K. A Process for Capturing CO2 from the Atmosphere. Joule 2, 1573–1594 (2018).
  7. Peters, G. P. & Geden, O. Catalysing a political shift from low to negative carbon. Nat. Clim. Chang. 7, 619–621 (2017).
  8. European Environment Agency. Data viewer on greenhouse gas emissions and removals, sent by countries to UNFCCC and the EU Greenhouse Gas Monitoring Mechanism (EU Member States). (2017). Available at: https://tinyurl.com/ybewwyq7. (Accessed: 8th November 2018)
  9. Heuberger, C. F., Rubin, E. S., Staffell, I., Shah, N. & Dowell, N. Mac. Power Generation Expansion Considering Endogenous Technology Cost Learning. Comput. Aided Chem. Eng. 40, 2401–2406 (2017).

 

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