Impact of global and local emission mitigation policies on the Chilean power system expansion planning

Transcription

1 Impact of global and local emission mitigation policies on the Chilean power system expansion planning Enzo Sauma Pontificia Universidad Católica de Chile Daniela Quiroga Pontificia Universidad Católica de Chile David Pozo Skolkovo Institute of Science and Technology 41 st IAEE International Conference Groningen, June 2018

2 UC Energy Research Center, Chile

3 Motivation Chilean GDP (billions) Chilean CO2 emissions (millions) GDP (constant 2010 US$) CO2 emissions Source: The World Bank Data (CO2 emissions (kt), GPD (constant 2010 US$))

4 Installed capacity (GW) Motivation Chilean electric system: 25% CO2eq, 30% SOx, 25% NOx, 5% PM Wind Solar Hydropower Fossil Fuels Source: Data CDEC-SIC, CDEC-SING (2016)

5 Motivation Renewable energy potential ~ 2,000 GW

6 Motivation

7 Motivation Renewable energy potential ~ 2,000 GW One of the top ten countries by volume of investment in renewable energies (2015) 70% of generation must come from renewable energies by 2050 Emission tax: CO 2, NOx, SO 2, PM Energy transitions Expansion planning level consequences

8 Carbon and local pollutants (SOx, NOx, PM) taxes Generation and transmission expansion planning Co-optimization of generation and transmission planning Mixed-integer linear program (MILP) Problem Statement Current Chilean expansion plan + renewable-based distributed generation (solar, wind, hydro) Methodology not limited to the Chilean power system

9 Problem formulation 145 nodes, 505 power units, 149 transmission lines Demand Nodal pricing system scheme Demand Inelastic and uncertain demand 5 demand scenarios (blocks) 10-year horizon, 5 policy-relevant scenarios

10 Problem formulation Input Node-line matrix Availability of existing units/transmission lines Net power capaciy factor Marginal cost of generating units Emission tax Susceptance of lines Capital costs Operating and manteinance cost Demand Discount rate Loss of load costs Curtailment costs Available technologies Emission factor of generating units Generation transmission expansion planning model Output Transmission lines installed (what, where, when) Generation units installed (what, where, when) Power generated Power flow Tons of emissions

11 Model Formulation: Objective function Min 1 1 Operating and maintenance costs: Annualized investement capital cost: Imbalance Costs: Emission costs:

12 Optimization model Min 1 1 subject to: Physical constraints Power flow equations (Kirchhoff s laws) Transmission line capacity limits Generation capacity limits Line and generation units availability (decommision/new commitments) Investment-related constraints By period By geographical location By technology Security constraints System reserve requirements Zonal reserve requirements

13 Case Studies Case 1 (Base Case) No tax Case 2 Carbon tax $20/ton CO2 Case 3 Case 4 Case 5 Carbon tax + Air pollutants tax Case 3 + Renewable construction plan Case 3 + Electrified demand $20/ton CO2; $5.72/kg PM; $62/ton SOx, $159/ton NOx $20/ton CO2; $5.72/kg PM; $62/ton SOx, $159/ton NOx; +1.5 GW hydropower $20/ton CO2; $5.72/kg PM; $62/ton SOx, $159/ton NOx; +3% demand growth

14 Results: Capacity installed Aggregate new power capacity installed in each case scenario (MW) Technology Base Case Case 2 Case 3 Case 4 Case 5 Coal 2,235 1,933 1,933 1,558 2,533 Natural gas Oil Total thermal 2,247 2,196 2,196 1,821 2,912 Hydropower 1,587 1,587 1,587 3,087 1,587 Wind 1,260 1,260 1,260 1,260 1,260 Solar 3,743 3,743 3,743 3,743 3,743 Biomass Distributed wind Distributed solar Distributed hydro Total renewable 8,189 8,266 8,249 9,753 8,300

15 Results: Energy generated Base Case Case Case Case Case Coal Oil N.Gas Renewables

16 Results: Capacity installed in Base Case Net Capacity (MW) Otro Other Biomasa Biomass Solar Eólica Wind Hidro Hydropower Gas Natural Natural Gas Carbón Coal

17 Results: Emissions Local pollutants Potencia Neta (MM (MW) ton/year) 2, ,000 1, , , , , SOx CO 2 NOx MP Otro Biomasa 40 Solar 30 Eólica Hidro 20 Gas Natural Carbón 10 - CO 2 (MM ton/year)

18 Results: Emissions Base Case vs. Case 2 Local Cont. locales pollutants (millones (MM ton/año) ton/year) Base Case: no tax Case 2: carbon tax Delay in the increase of emissions Non-stable change over time SOx CO 2 NOx PM CO CO 2 (millones 2 (MM ton/year) /año)

19 Results: Emissions Case 2 vs. Case 3 Local Cont. locales pollutants (millones (MM ton/year) ton/año) Case 2: carbon tax Case 3: carbon, SOx, NOx, and PM tax SOx CO 2 NOx PM CO CO 2 (millones 2 (MM ton/year) ton/año)

20 Results: Emissions Case 3 vs. Case 4 Local Cont. locales pollutants (millones (MM ton/year) ton/año) Case 3: carbon SOx, NOx, and PM tax Case 4: carbon, SOx, NOx, and PM tax + modified expansion plan Hydropower installed ,900 GWh fossil fuel CO CO 2 (millones ton/año) 2 (MM ton/year)

21 Emissions Comparison Base Case Case 2 Case 3 Case 4 Case 5 Base Case Case 2 Case 3 Case 4 Case 5 Base Case Case 2 Case 3 Case 4 Case 5 Base Case Case 2 Case 3 Case 4 Case 5 CO2 (10^6 6 ton) SOx (10^4 4 ton) NOx (10^4 4 ton) ton) MP PM (10^3 3 ton) ton)

22 Distributional effects Case 2 emissions Base case emissions = Net reduction Increase Decrease

23 80.0 Distributional effects 60.0 CO 2 Emissions (MM ton) Caso Case 2 Caso Case 3 Caso Case 4 Case Caso 5 vs. Base Case vs. Base Case vs. Case 3 vs. Case 3 Base case: no tax Case 2: carbon tax Case 3: carbon and 40.0 local pollutant taxes Case 4: carbon and local pollutant taxes, with modified expansion plan Case 5: carbon and local pollutant taxes, with a highly electrified demand

24 80.0 Distributional effects CO 2 Emissions (MM ton) regions 5 regions 12 regions Caso Case 2 Caso Case 3 Caso Case 4 Case Caso 5 vs. Base Case vs. Base Case vs. Case 3 vs. Case regions 3 regions All 1 region

25 Distributional effects Particulate Matter (PM) Region Base Case Case 2 vs. Base Case Case 3 vs. Case 2 Case 4 vs. Case 3 Case 5 vs. Case 3 (ton) (ton) (ton) (ton) XV 2,9 2,9 2,9 2,9 2,94 I II III IV 0,18 0,18 0,16 0,10 0,62 V RM VI ,1 VII ,47 VIII IX XIV 0,03 0,04 0,05-0,58 X 0,02 0,02 0,02 0,01 0,68

26 Distributional effects Sulfur dioxide (SO2) Region Base Case Case 2 vs. Base Case Case 3 vs. Case 2 Case 4 vs. Case 3 Case 5 vs. Case 3 (ton) (ton) (ton) (ton) XV I II III IV 2,6 2,7 2,3 1,5 9,3 V RM VI VII ,96 VIII IX XIV 0,44 0,66 0,77-8,6 X 0,31 0,31 0,31 0,21 10

27 Distributional effects Nitrous Oxides (NOx) Region Base Case Case 2 vs. Base Case Case 3 vs. Case 2 Case 4 vs. Case 3 Case 5 vs. Case 3 (ton) (ton) (ton) (ton) XV I II III IV 2,1 2,2 1,9 1,2 7,5 V RM VI VII ,60 VIII IX XIV 0,35 0,53 0,62-7,0 X 0,25 0,25 0,25 0,17 8,2

28 Locational marginal Price (LMP) 160 Base Case Case 2 LMP (USD/MWh) LMP (USD/MWh) Bloque 1 Bloque 2 Bloque 3 Bloque 4 Bloque 5 Bloque 1 Bloque 2 Bloque 3 Bloque 4 Bloque 5 Case 4 LMP (USD/MWh) Bloque 1 Bloque 2 Bloque 3 Bloque 4 Bloque Case 3 LMP (USD/MWh) Bloque 1 Bloque 2 Bloque 3 Bloque 4 Bloque 5 Case 5 LMP (USD/MWh) Costs (USD Billion) Bloque 1 Bloque 2 Bloque 3 Bloque 4 Bloque

29 Average LMP and Costs Base Case Caso 2 Case 3 Case 4 Case 5 Average LMP (USD/MWh) Base Case Case 2 Case 3 Case 4 Case 5 CC OM + IB EM Total Costs (USD Billion)

30 Conclusions Although taxes are an effective way of reducing emissons, they have effects on the long-term power system planning Under an electrified demand, capital costs may allow oil production to be more convenient even under the tax imposed (Case 5) Spatial distributive effects will impair some regions increasing their emissions Further energy policies such as increasing the renewable energy share in the expansion plan, mitigates leakage effects

31 Impact of global and local emission mitigation policies on the Chilean power system expansion planning Enzo Sauma Pontificia Universidad Católica de Chile Daniela Quiroga Pontificia Universidad Católica de Chile David Pozo Skolkovo Institute of Science and Technology 41 st IAEE International Conference Groningen, June 2018