Modeling Trends of the European Electricity Sector with a Focus on Nuclear Phase-outs in the UK and France

Berlin Conference on Energy and Electricity Econonomics; Berlin, 12. October 2016 Modeling Trends of the European Electricity Sector with a Focus on Nuclear Phase-outs in the UK and France Pao-Yu Oei, Clemens Gerbaulet, Christian von Hirschhausen, Mario Kendziorski, Casimir Lorenz Technische Universität Berlin, Workgroup for Infrastructure Policy (WIP) Deutsches Institut für Wirtschaftsforschung (DIW Berlin), Energy, Transport and Environment (EVU) - 0 - February.2016

Model application: Dynelmod Scope: Europe Objective: System Cost minimization Capacity Cost and Generation Cost Investment cost Generation Capacities Grid Expansion Investments: five-year steps (2015), 2020, 2025, 2030, 2035, 2040, 2045, 2050, plant dispatch: hourly resolution over set of ~350 hours Boundary condition examples Country-sharp power plant portfolio development (decommissioning of existing plants) Electricity demand development per Country CO 2 -Budget over time Market coupling: NTC or Flow-Based - 1 - Source: Gerbaulet and Lorenz (2016) February.2016

Power Plants and Networks in Europe Water Biomass Hard coal Wind Lignite Diesel Fuel Oil Gas Nuclear Furnace gas Oil shale Synthetic gas Source: Schneider, Kuhs (2013) - 2 - February.2016

Structural Changes in the Future, decommissioning of nuclear power plants in Europe Source: Schneider, Kuhs (2013) - 3 - February.2016

Implemented CO 2 emission constraint for Europe aiming at a decarbonization of the electricity sector until 2050 1400 1200 1000 Mt CO 2 800 600 400 200 0 2005 2010 2015 2020 2025 2030 2035 2040 2045 2050 2055 Source: Energy Roadmap 2050; Impact Assesment SEC (2011) 1565; page 70 ; Scenario: "Diversified supply scenario"; column Power generation/district heating for EU27 countries - 4 - February.2016

The European Commission reduced their nuclear projection but still includes new constructions, esp. in France and UK GW 50 45 40 35 30 25 20 15 10 5 0 12 1 27 23 41 43 21 14 7 5 8 5 2025 2030 2035 2040 2045 2050 EC Reference Scenario 2013 EC Reference Scenario 2016 Source: EC (2013, 2016). - 5 - February.2016

Transition Enérgétique à la francaise Electricity Sector Other sectors Nuclear Renewable energies Demand on (share of gross electricity consumption) fossil fuels Greenhouse gas emissions Final energy consumption 50% 40% -30% -40% -75% -50% 2025 2030 2030 2030 2050 2050 (base 2012) (base 1990) (base 2012) The share of nuclear energy accounted for 76% in 2015 France. The Transition Enérgétique lays-out a pathway for the next decade but many things remain uncertain afterwards. The following slides examine a sobriety scenario developed by Criqui, et al. (2015) assuming a path for 2050 with - 0% share of nuclear, - >80% renewables, - -50% energy consumption Source: Loi sur la transition énérgétique (2015) - 6 - February.2016

Results of the sobriety scenario for France until 2050 France remains an electricity exporter despite the nuclear phase-out 700 600 500 TWh 400 300 200 100 trade Wind Sun Biomass Hydro Fossil Nuclear 0-100 2015 2020 2030 2040 2050 Soruce: Own modeling based on Criqui, et al. (2015). - 7 - February.2016

Expected closure of existing nuclear power plants and investments in newbuilds envisaged by the UK energy strategy 20 18 16 14 12 GW 10 8 6 4 2 0 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 existing Capacity planned Capacity Source: National Audit Office (2016), PRIS Database, own assumptions. - 8 - February.2016

Two possible scenarios for a nuclear phase-out in the UK sector-coupling might lead to increasing import needs in 2050 Scenario D-EXP (decarbonize and expand) depicts an intensive sector coupling and the usage of gas in combination with carbon capture, transport, and sequestration (CCTS). Scenario M-VEC (multivector transition) is less reliant on electrification, and foresees a growth of electricity consumption only between 2040 and 2050 and a more limited availability of CCTS. TWh 700 600 500 400 300 200 100 - -100 2015 2020 2030 2040 2050 2015 2020 2030 2040 2050 D-EXP M-VEC Nuclear Coal Gas Gas (CCTS) Hydro Biomass Solar Wind Trade other Soruce: Own modeling based on Pye, et al. (2015). - 9 - February.2016

Conclusion: Decarbonization of the European electricity sector is compatible with a reduction of nuclear capacities A reduction of nuclear capacities leads to increased investment in gas, renewables, and storage; reduced electricity generation by coal to be in line with the European CO 2 target; Shifts in electricity trades between neighbouring countries depending on national strategies. 4,500 TWh 4,000 3,500 3,000 2,500 2,000 1,500 1,000 500-2015 2020 2030 2040 2050 other Wind Sun Biomass Hydro Gas CCS Gas Coal Lignite Nuclear - 10 - February.2016

Berlin Conference on Energy and Electricity Econonomics; Berlin, 12. October 2016 Modeling Trends of the European Electricity Sector with a Focus on Nuclear Phase-outs in the UK and France Pao-Yu Oei, Clemens Gerbaulet, Christian von Hirschhausen, Mario Kendziorski, Casimir Lorenz Technische Universität Berlin, Workgroup for Infrastructure Policy (WIP) Deutsches Institut für Wirtschaftsforschung (DIW Berlin), Energy, Transport and Environment (EVU) - 11 - February.2016

Model application: Dynelmod Investments Conventional power plants Renewables (PV, Wind Onshore/Offshore, CSP) Storage (several storage options; e.g. Battery storage options, pumped hydro storage) Grid expansion (increase of NTCs) Other Data Hourly RES feed-in and load for 2012 based on ENTSO-E and ECWMF weather data Increase in full-load hours of renewables over time Cost data mainly based on Schröder et al. (2013) Investment, Fix, and variable capacity cost Calculation over a set of hours Variation of time-of day Variation of season Scaling for feed-in and demand time series - 12 - February.2016

Flow-based market coupling Aggregation to a zonal PTDF The flow based cross border interaction characteristics are derived from the actual underlying grid structure Aggregation line sharp data to a country sharp PTDF PTDF Calculation from the actual AC grid 1 PPPF l,nn = H l,n B n,nn Load on line using PTDF n P l = PPPF l,n nnnnnnnt n n Aggregation to a zonal PTDF with maximum transfer capacities zzzzz P cc,ccc = PPPF cc,ccc,cccc P mmm cc,ccc cccc = min ii P ii mmm nnnnnnnt cccc PPPF ii,cc PPPF ii,ccc Node-sharp representation of the European high voltage grid - 13 - February.2016 Blue: HVDC, red: 380 kv, yellow: 300 kv, green: 220 kv

Research on nuclear at DIW Berlin and TU Berlin DIW Berlin Wochenbericht: 13-2014: Atomkraft: Auslaufmodell mit ungelöster Endlagerfrage 22-2015: Stromversorgung bleibt sicher Große Herausforderungen und hohe Kosten bei Rückbau und Endlagerung 45-2015: Rückbau und Entsorgung in der deutschen Atomwirtschaft: öffentlichrechtlicher Atomfonds erforderlich 45-2015: Europäische Klimaschutzziele sind auch ohne Atomkraft erreichbar DIW Berlin Data Documentation 2015: Stand und Perspektiven des Rückbaus von Kernkraftwerken in Deutschland ("Rückbau- Monitoring 2015") DIW Berlin Round-up: Uranium Power and the Uranium Market are Reserve and Ressource Sufficient (forthcoming) - 14 - February.2016

France in focus Technical lifetime of nuclear power plants is 45-50 years in Base scenario. Early exit scenario: Plants decommissioned in 2030 are phased-out already in 2025 (>42 years). Shutdown before 2020 Shutdown before 2025 Shutdown before 2030 Installed Capacity in France in GW 70 60 50 40 30 20 10 0-10 2020 2025 2030 2035 2040 2045 2050 Base No new Nuclear EarlyExit - 15 - February.2016

Assumptions for nuclear decommission in France Last active model year Plant Capacity (MW) Start Base No new nuclear France Early Exit Fessenheim 1 880 1977 2015 2015 2015 Fessenheim 2 880 1978 2015 2015 2015 Bugey 2 910 1979 2015 2015 2015 Bugey 3 910 1979 2020 2020 2020 Bugey 4 880 1979 2020 2020 2020 Bugey 5 880 1980 2020 2020 2020 Dampierre 1 890 1980 2020 2020 2020 Gravelines B-1 910 1980 2020 2020 2020 Gravelines B-2 910 1980 2020 2020 2020 Tricastin 1 915 1980 2020 2020 2020 Tricastin 2 915 1980 2020 2020 2020 Blayais 1 910 1981 2025 2025 2020 Dampierre 2 890 1981 2025 2020 Dampierre 3 890 1981 2025 2020 Dampierre 4 890 1981 2025 2020 Gravelines B-3 910 1981 2025 2020 Gravelines B-4 910 1981 2025 2020 Tricastin 3 915 1981 2025 2020 Tricastin 4 915 1981 2025 2020 Blayais 2 910 1983 2025 2020 Blayais 3 910 1983 2025 2020 Blayais 4 910 1983 2025 2020 St. Lauent B-1 915 1983 2030 2020 St. Lauent B-2 915 1983 2030 2020 Chinon B-1 905 1984 2030 2030 Chinon B-2 905 1984 2030 2030 Cruas Meysse 1 915 1984 2030 2030 Cruas Meysse 3 915 1984 2030 2030 Cruas Meysse 2 915 1985 2030 2030 Cruas Meysse 4 915 1985 2030 2030 Last active model year Plant Capacity (MW) Start Base No new nuclear France Early Exit Gravelines C-5 910 1985 2030 2030 Gravelines C-6 910 1985 2030 2030 Paluel 1 1,330 1985 2030 2030 Paluel 2 1,330 1985 2030 2030 Flamanville 1 1,330 1986 2030 2030 Paluel 3 1,330 1986 2030 2030 Paluel 4 1,330 1986 2030 2030 St. Alban 1 1,335 1986 2030 2030 Cattenom 1 1,300 1987 2030 2030 Chinon B-3 905 1987 2030 2030 Flamanville 2 1,330 1987 2030 2030 St. Alban 2 1,335 1987 2030 2030 Belleville 1 1,310 1988 2035 2035 Cattenom 2 1,300 1988 2035 2035 Chinon B-4 905 1988 2035 2035 Nogent 1 1,310 1988 2035 2035 Belleville 2 1,310 1989 2035 2035 Nogent 2 1,310 1989 2035 2035 Penly 1 1,330 1990 2035 2035 Cattenom 3 1,300 1991 2035 2035 Golfech 1 1,310 1991 2035 2035 Cattenom 4 1,300 1992 2035 2035 Penly 2 1,330 1992 2040 2040 Golfech 2 1,310 1994 2040 2040 Chooz B-1 1,500 1996 2045 2045 Chooz B-2 1,500 1999 2045 2045 Civaux 1 1,495 1999 2045 2045 Civaux 2 1,495 2000 2045 2045-16 - February.2016

Nuclear development assumptions for Europe GW 160 140 120 100 80 60 40 20 0 2005 2010 2015 2020 2025 2030 2035 2040 2045 2050 2055 Base No new nuclear France early exit - 17 - February.2016