Energy Transition

Electricity generation costs of concentrated solar power technologies in China based on operational plants

Recent years witnessed a sharp increase of CSP (concentrated solar power) plants around the world. CSP is currently at its early stage in China, with several demonstration and utility-scale plants underway. China's rising electricity demand, the severe environmental pollution from coal-fired power plants, and favorable renewable energy policies are expected to result in a large-scale CSP deployment in the next years. Detailed CSP studies for China are however hardly available. To fill this knowledge gap, this study collects plant-specific data in a national CSP database in collaboration with local CSP experts. On this basis, this study analyzes and benchmarks the costs of parabolic trough CSP, tower CSP, and dish CSP technologies in China by applying an LCOE (levelized cost of electricity) model. The current LCOE for the different CSP plants falls in a range of 1.2–2.7 RMB/kWh (0.19–0.43 US$/kWh). Among the three CSP technology variants discussed, our sensitivity analysis indicates that the tower CSP variant might have the greatest potential in China. We expect a future cost reduction potential of more than 50% in 2020 and a high share of local content manufacturing for tower CSP.

Electricity Investments under Technology Cost Uncertainty and Stochastic Technological Learning

Given that electricity generation investments are expected to operate for 40 or more years, the decisions we make today can have long-term impacts on the electricity system and the ability and cost of meeting long-term environmental goals. This research investigates socially optimal near-term electricity investment decisions under uncertainty in future technology costs and policy by formulating a computable general equilibrium (CGE) model of the U.S. as a two-stage stochastic dynamic program. The unique feature of the study is a stochastic formulation of technological learning. Most studies that include technological learning utilize deterministic learning curves in which a given amount of investment, production or capacity leads to a given cost reduction. In a stochastic framework, investment in a technology in the current period depends on uncertain learning that will result and lower future costs of the technology. Results under stochastic technological learning suggest that additional near-term investment relative to what is optimal under no learning can be justified at technological learning rates as low as 10–15%, and at the 20–25% rates commonly found in literature for advanced non-carbon technologies, significant additional near-term investment can be justified. We also find it can be socially optimal to invest more in non-carbon technology when the rate of learning is uncertain compared to the case where the learning rate is certain. Increasing marginal costs produce an asymmetric loss function that under uncertainty leads to more near-term non-carbon investment in attempt to avoid the situation of high non-carbon costs and an external economic environment that creates high demand for non-carbon technology.

Estimating the Rate of Technical Change in the Oil and Gas Industry using Data from Private and National Companies

Modelling the long term prices for crude oil and natural gas has been a critical undertaking of many governments, companies, and analysts. The most important goal of this exercise is to effectively project the price of crude oil and natural gas to inform and shape today’s decisions. Most long-run energy models in use today are unable to quantify properly a factor for supply growth due to technical change – a component that has played a significant role in the provision of access to newer streams of crude oil and natural gas - because the measurement of productivity and technical change at the oil and gas industry aggregate level are limited to a small set of studies for few countries.

This thesis attempts to measure the rate of change in technical change for the oil and gas industry using data from private and national major companies. Publicly available financial data are aggregated from eight major producers over a time period of at least fifteen years for the national oil companies and forty five years for the private oil companies. The time period chosen effectively covers three distinct periods of different crude oil price behavior.

Three productivity measurement methods are applied - the growth accounting, index number theory, and regression method – to measure for the rate of change in productivity and technical change for the private and national oil companies, and for the aggregate that allows to infer the rates for the entire industry. The thesis concludes that the rate of technical change for the industry can be assessed and it proposes a reasonably estimated range (1.4-1.7 per cent per year) that can be incorporated into long-run energy models. The thesis also presents insights to the drivers that influence the rate of growth. Finally, the thesis provides a dataset containing the information about output and labor and capital inputs for major oil and gas companies that can be used by researchers to enhance studies on the rate of technical change in the oil and gas industry.

General Equilibrium Impacts of New Energy Technologies on Sectoral Energy Usage

The dissertation examines conditions under which gas-to-liquids (GTL) technology penetration shifts the crude oil-natural gas price ratio. Empirical research finds long-run relationships between crude oil and natural gas prices. Some studies include time trends that steadily evolve the pricing relationship, while others show a long-run relationship that occasionally shifts significantly. A common hypothesis is that technologies that increase substitutability or complementarity between fuels are the source of the price linkage. However, empirically measuring the effects of a gradually-penetrating technology across narrow time frames is not possible due to intervening economic shocks. This thesis examines the effects of an energy conversion technology penetration on the crude oil-natural gas price ratio through its influence on sectoral energy use in the U.S. GTL must be less expensive and more efficient, and natural gas prices must be lower, than currently forecast for an effect to be measured. In the absence of a technology that explicitly allows for substitution between natural gas and petroleum-based fuels, different rates of demand growth result in a steadily-rising oil-gas price ratio. If a viable GTL technology successfully competes against petroleum-derived refined fuels, it dampens crude oil price increases and brings the oil-gas price ratio below the levels found in cases without a viable GTL technology.

Global population growth, technology, and Malthusian constraints: A quantitative growth theoretic perspective

Revised May 2016

How much will the global population expand, can all these extra mouths be fed, and what is the role in this story of economic growth? We structurally estimate a two-sector Schumpeterian growth model with endogenous population and finite land reserves to study the long-run evolution of global population, technological progress and the demand for food. The estimated model closely replicates trajectories for world population, GDP, sectoral productivity growth and crop land area from 1960 to 2010. Projections from 2010 onwards show a slowdown of technological progress, and, because it is a key determinant of fertility costs, significant population growth. By 2100 global population reaches 12.4 billion and agricultural production doubles, but the land constraint does not bind because of capital investment and technological progress.

How Effective are US Renewable Energy Subsidies in Cutting Greenhouse Gases?

The federal tax code provides preferential treatment for the production and use of renewable energy. We report estimates of the subsidies' effects on greenhouse gases (GHG) emissions developed in a recent National Research Council (NRC) Report. Due to lack of estimates of the impact of tax provisions on GHG emissions, new modeling studies were commissioned. The studies found, at best, a small impact of subsidies in reducing GHG emissions; in some cases, emissions increased. The NRC report also identified the need to capture the complex interactions among subsidies, pre-existing regulations, and commodity markets.

Impact of Aviation on Climate: FAA's Aviation Climate Change Research Initiative (ACCRI) Phase II.

Under the Federal Aviation Administration’s (FAA) Aviation Climate Change Research Initiative (ACCRI), non-CO2 climatic impacts of commercial aviation are assessed for current (2006) and for future (2050) baseline and mitigation scenarios. The effects of the non-CO2 aircraft emissions are examined using a number of advanced climate and atmospheric chemistry transport models. Radiative forcing (RF) estimates for individual forcing effects are provided as a range for comparison against those published in the literature. Preliminary results for selected RF components for 2050 scenarios indicate that a 2% increase in fuel efficiency and a decrease in NOx emissions due to advanced aircraft technologies and operational procedures, as well as the introduction of renewable alternative fuels, will significantly decrease future aviation climate impacts. In particular, the use of renewable fuels will further decrease RF associated with sulfate aerosol and black carbon. While this focused ACCRI program effort has yielded significant new knowledge, fundamental uncertainties remain in our understanding of aviation climate impacts. These include several chemical and physical processes associated with NOx–O3–CH4 interactions and the formation of aviation-produced contrails and the effects of aviation soot aerosols on cirrus clouds as well as on deriving a measure of change in temperature from RF for aviation non-CO2 climate impacts—an important metric that informs decision-making.

Impacts of CO2 Mandates for New Cars in the European Union

CO2 emissions mandates for new light-duty passenger vehicles have recently been adopted in the European Union (EU), which require steady reductions to 95 g CO2/km in 2021. Using a computable general equilibrium (CGE) model, we analyze the impact of the mandates on oil demand, CO2 emissions, and economic welfare, and compare the results to an emission trading scenario that achieves identical emissions reductions. We find that the mandates lower oil expenditures by about €6 billion, but at a net added cost of €12 billion in 2020. Emissions from transport are about 50MtCO2 lower with the vehicle emission standards, but with the economy-wide emission trading, lower emissions in transport allow an equal increase in emissions elsewhere in the economy. We estimate that tightening CO2 standards further after 2020 would cost the EU economy an additional €24–63 billion in 2025 compared with achieving the same reductions with an economy-wide emission trading system.

Impacts of the Minamata Convention on Mercury Emissions and Global Deposition from Coal-Fired Power Generation in Asia

We explore implications of the United Nations Minamata Convention on Mercury for emissions from Asian coal-fired power generation, and resulting changes to deposition worldwide by 2050. We use engineering analysis, document analysis, and interviews to construct plausible technology scenarios consistent with the Convention. We translate these scenarios into emissions projections for 2050, and use the GEOS-Chem model to calculate global mercury deposition. Where technology requirements in the Convention are flexibly defined, under a global energy and development scenario that relies heavily on coal, we project ∼90 and 150 Mg·y–1 of avoided power sector emissions for China and India, respectively, in 2050, compared to a scenario in which only current technologies are used. Benefits of this avoided emissions growth are primarily captured regionally, with projected changes in annual average gross deposition over China and India ∼2 and 13 μg·m–2 lower, respectively, than the current technology case. Stricter, but technologically feasible, mercury control requirements in both countries could lead to a combined additional 170 Mg·y–1 avoided emissions. Assuming only current technologies but a global transition away from coal avoids 6% and 36% more emissions than this strict technology scenario under heavy coal use for China and India, respectively.

© 2015 American Chemical Society

Impacts on Resources and Climate of Projected Economic and Population Growth Patterns

Global economic and population growth are driving energy, land, and water use, and there are complex connections between the use of these resources and the world’s climate and natural environment. A significant engineering challenge is to develop and deploy technologies that reduce human impact on the environment and make better use of resources while remaining robust in the face of unavoidable environmental change. Without significant changes in resource use patterns, projections indicate that fossil fuel use will continue to rise, more land will be converted for crops, and water stress will increase in many areas already subject to water shortages.

Even in the absence of climate and environmental change, these trends would lead to stress on water resources and natural systems as well as temperature increases of 3°C to as much as 8°C depending on the region and climate sensitivity. Higher global temperatures would be associated with an overall increase in global precipitation (because a warmer climate speeds up the hydrological cycle, meaning more evaporation and more precipitation), but water runoff in many already water-stressed areas could be reduced, contributing to further water stress, with consequences for energy and food production.

This short paper presents a review of several key aspects of current global development to quantitatively describe how economic development drives energy, land, and water use and how the use of these resources may affect climate and the availability of resources.

© 2015 National Academy of Engineering

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