Climate policy Engagement in Brazil: how delayed action might lead to CCS as the last resort to mitigation
1. Larissa P. N. de Oliveira
VITO/EnergyVille
“Climate policy Engagement in Brazil: how
delayed action might lead to CCS as the last
resort to mitigation”
ETSAP Workshop – 27/11/2016
Madrid
3. Background
• Original Work
– Oliveira, L. P. N. “Temporal Issues in Mitigation Alternatives for the
Energy Sector in Brazil”, D.Sc. Thesis. Energy Planning Program, Federal
University of Rio de Janeiro (2016).
• “Sandwich” period (1 year) at Imperial College London
– Overall subject: Integrated modelling for evaluating low carbon policies in
Brazil
• Other publications:
– OLIVEIRA, L. P. N.; ROCHEDO, P. R. R., PORTUGAL-PEREIRA, J.; HOFFMANN, B. S.; ARAGÃO, R.; MILANI, R.; LUCENA, A.
F. P.; SZKLO, A. S.; SCHAEFFER, R. Critical technologies for sustainable energy development in Brazil: technological
foresight based on scenario modelling. Journal of Cleaner Production 130 PP. 12-24.
– LUCENA, A. F. P.; CLARCKE, L.; SCHAEFFER, R.; SZKLO, A. S.; ROCHEDO, P. R. R.; NOGUEIRA, L. P. P.; DAENZER, K.;
GURGEL, A.; KITOUS, A., KOBER, T. Climate policy scenarios in Brazil: A multi-model comparison for energy. Energy
Economics 56 PP. 564-574, 2016.
– NOGUEIRA, L. P. P.; LUCENA, A. F. P.; RATHMANN, R.; ROCHEDO, P. R. R.; SZKLO, A. S.; SCHAEFFER, R. Will thermal
power plants with CCS play a role in Brazil's future electric power generation? International Journal of Greenhouse
Gas Control 24 PP. 115-123, 2014.
– NOGUEIRA, L. P. P.; HAWKES, A. D.; NAPP, T. Can Brazil fulfil long-term reduction targets? An Evaluation of
Consequences of Delayed Action on its energy sector. 9th Conference on Sustainable Development of Energy, Water
and Environmental Systems (SDEWES). Venice-Istanbul, September, 2014.
4. Introduction
• Motivation
– Different approaches regarding time preference lead to different
outcomes in scenario-making;
– Brazil has assumed a strong position towards climate change, but faces
an economic and political turmoil;
– Bring the debate of delayed action to country level;
– Bring insight on the effect of delayed action in Brazil (considering its
particularities).
• Research question:
– Could Brazil become
locked on fossil fuel
technologies if it does
not anticipate climate
action?
Integrated Modeling
Time preference Climate Change
8. Brazil’s in a crossroads…
• On the demand side:
– Increasing population
– Economic growth in recent years
– Increasing demand in the long-term
• Despite current economical crisis
• On the supply side:
– Still highly renewable (due to hydro and ethanol)
– Hydro reminiscent potential in Amazon region
– Pre-salt discoveries increased natural gas consumption
– Low cost coal-fired electricity generation
9. Brazil’s Context
• Low Carbon Policies
Before...
PNMC: 36.1% to 38.9%
reduction in 2020
compared to a BAU
scenario (voluntary).
Today:
INDC: absolute targets of
1.3 GtCO2e until 2025 and
1.2 GtCO2e until 2030 (37%
and 43% reduction) in
relation to 2005 levels.
16. Methodology
• Simplified structure: other demand sectors
Industry:
Mining
Cement
Ceramics
Pulp and Paper
Pig-iron and Steel
Nickel & Iron
Iron-alloys
Chemical
Food and Bev.
Textile
Others
18. Methodology
• Scenarios:
– Discount rates:
• Market discount rates
per sector: 12%-15%
• Social discount rate: 3%
BASE_MKTS
LC_MKTS_PF
LC_MKTS_PFD
BASE_SOC
LC_SOC_PF
LC_SOC_PFD
– Low carbon policies:
• Based on INDC for 2030 -
575,8 million tCO2
• Early (2030) vs. delayed
action (2040) reflects
level of international
cooperation.
19. Main Results
0
200
400
600
800
1,000
1,200
1,400
BASE_MKTS
LC_MKTS_PF
LC_MKTS_PFD
BASE_MKTS
LC_MKTS_PF
LC_MKTS_PFD
BASE_MKTS
LC_MKTS_PF
LC_MKTS_PFD
BASE_MKTS
LC_MKTS_PF
LC_MKTS_PFD
2010 2020 2030 2040 2050
TWh
Electricity Generation Ethanol
H2 CCGT
MSW
Wave
Solar Hybrid
Solar
Wind
Biomass w/CCS
Biomass
Hydro
Nuclear
Diesel
Fuel Oil
NG w/CCS
NG
Coal Co-firing
Coal w/CCS
Coal
0
200
400
600
800
1,000
1,200
1,400
BASE_MKTS
LC_MKTS_PF
LC_MKTS_PFD
BASE_MKTS
LC_MKTS_PF
LC_MKTS_PFD
BASE_MKTS
LC_MKTS_PF
LC_MKTS_PFD
BASE_MKTS
LC_MKTS_PF
LC_MKTS_PFD
2010 2020 2030 2040 2050
MtCO2
CO2 Emissions
CO2 Capture -
H2
CO2 Capture -
Bio
CO2 Capture -
EE
Net Emissions
0
200
400
600
800
1,000
1,200
1,400
BASE_SOC
LC_SOC_PF
LC_SOC_PFD
BASE_SOC
LC_SOC_PF
LC_SOC_PFD
BASE_SOC
LC_SOC_PF
LC_SOC_PFD
BASE_SOC
LC_SOC_PF
LC_SOC_PFD
2010 2020 2030 2040 2050
TWh
Electricity Generation Ethanol
H2 CCGT
MSW
Wave
Solar Hybrid
Solar
Wind
Biomass w/CCS
Biomass
Hydro
Nuclear
Diesel
Fuel Oil
NG w/CCS
NG
Coal Co-firing
Coal w/CCS
Coal
0
200
400
600
800
1,000
1,200
1,400
BASE_SOC
LC_SOC_PF
LC_SOC_PFD
BASE_SOC
LC_SOC_PF
LC_SOC_PFD
BASE_SOC
LC_SOC_PF
LC_SOC_PFD
BASE_SOC
LC_SOC_PF
LC_SOC_PFD
2010 2020 2030 2040 2050
MtCO2
CO2 Emissions
CO2 Capture -
H2
CO2 Capture -
Bio
CO2 Capture -
EE
Net Emissions
More
fossil-
based
More
renewables
Market DR Social DR
20. Main Results
• Primary sources across scenarios:
0
1
2
3
4
5
6
7
Coal
Natural Gas
Crude oil
Biomass
Biofuels
Nuclear
Hydro
Other Renewables
2030
BASE_SOC LC_SOC_PF LC_SOC_PFD
BASE_MKTS LC_MKTS_PF LC_MKTS_PFD
21. Main Results
• Primary sources across scenarios:
0
1
2
3
4
5
6
7
Coal
Natural Gas
Crude oil
Biomass
Biofuels
Nuclear
Hydro
Other Renewables
2050
BASE_SOC LC_SOC_PF LC_SOC_PFD
BASE_MKTS LC_MKTS_PF LC_MKTS_PFD
22. Main Results
• Abated
emissions
through CCS
0
0.02
0.04
0.06
0.08
0.1
0.12
0.14
0.16
Capture
EE
Capture
Bio
Capture
H2
BASE_SOC LC_SOC_PF LC_SOC_PFD
BASE_MKTS LC_MKTS_PF LC_MKTS_PFD
23. Main Results
• Normalized Global Cost vs. Normalized
Emissions of Scenarios.
1.002
1.004
1.006
1.008
1.010
1.012
1.014
1.016
1.018
0.68 0.70 0.72 0.74 0.76 0.78
NormalizedTotalCost
Normalized Emissions
LC_SOC_PFD
LC_SOC_PF
LC_MKTS_PFD
LC_MKTS_PF
delayed
early
early
delayed
24. Conclusions
• Energy budget of Brazil’s INDC seems to be quite stringent
under high long-term economic growth premises;
• Different elements related to time preference influence the
technology transition: among them the discount rate choice
and the level of international cooperation;
• Still, under delayed action, Brazil’s energy system gets (more)
locked in fossil technologies bioCCS potential, e.g., is
underexplored.
• Perfect foresight results deviate from real market rationale of
some specific sector (e.g., ethanol + EE).
• Important to be aware of discounting effects and model
rationale when interpreting results (expl: early vs. delayed
actions with different DRs).
25. Future work for TIMBRA
• Better depiction of demand side processes should relief
the pressure for CCS and other advanced technologies;
• Better depiction of industry sector;
• Adjustments in short-term macroeconomic assumptions to
reflect current economical crisis;
• Sensitivities related to discount rates;
• Allowing trade with other regions ‘cap-and-trade’ shouuld
also relief pressure on supply;
• Integration with Latin America (ongoing).
26. Thank you!
Larissa P. N. de Oliveira
larissa.oliveira@energyville.be
Co-authors:
Roberto Schaeffer, Ph.D
roberto@ppe.ufrj.be
Alexandre Szklo, D.Sc.
szklo@ppe.ufrj.br
Adam D. Hawkes, Ph.D.
a.hawkes@imperial.ac.uk
This research was financed by CNPq and CAPES, funding agencies in Brazil.
This research was partly financed by ‘Science Without Borders’ Program
(http://www.cienciasemfronteiras.gov.br/web/csf-eng/).