Energy Directives

09 October 2019
UAB Team

Background

 

The EU is a global leader in seeking to mitigate climate change by reducing GHG emissions, a position won first through being ahead of the curve in cutting emissions and setting relatively ambitious new targets, and now buttressed by more unified climate diplomacy efforts (efforts in Paris and afterward to improve decarbonization and ‘bend the curve’ on climate change, creating a downward trajectory in future emissions. On neither climate nor energy policy are, however, all European voices perfectly in sync. In academic and policy arenas, the existence of a systemic problem affecting the quality of the scientific input used in the process of decision making is currently flagged. In fact, when the analysis of the performance of an energy system, regulated by an energy directive, has to be integrated within a larger characterization of its performance, which includes water, food, land use, social aspects and environmental impact, it becomes evident that current models (based on traditional economic theory) are simplistic. These simplifications imply a systemic neglect of key information that would be relevant for the other elements of the nexus.

The aim of this policy-case is therefore twofold: the first objective self-evidently speaks to the debates regarding the robustness and usefulness of the scientific evidence used to inform policy; the second objective speaks to a growing interest in transdisciplinary research, or co-production of knowledge, that supports science-policy interfaces bridging academic and policy arenas.

 

Methodological Approach

 

Our analysis is based on Quantitative Story-Telling (QST), a hybrid qualitative and quantitative tool, proposing a new way of using scientific analysis in the process of decision-making.  It is an alternative to the concept of evidence-based policy.  The general iterative schema of QST includes several steps: the first step is to identify stories, or narratives, about situations, problems and solutions (through text analysis and interviews); then selected relevant narratives, validated though meetings with policy-makers, are quantitatively represented with MuSIASEM. Lastly, the results are presented and then the feedbacks received are used to eventually run another cycle of QST. 

 

Narratives

 

Four main narratives have been identified in the current policy discourse and analysed in MAGIC:

  1. Transition to renewable energies. Europe needs to increase the share of renewable energy by using more solar and wind energy. This is environmentally necessary to fight climate change by reducing CO2 emissions and is socially and economically desirable. 
  2. Intermittency challenge. Intermittency of supply is a key challenge limiting the greater use of solar and wind energy. More efficient storage systems are a key enabling technological innovation that will have to contribute to solving the problem of intermittency. 
  3. Energy efficiency narrative. Energy efficiency is a means to achieve energy security and decarbonize the economy. Energy savings from efficiency have the potential of being the first fuel. 
  4. Outsourcing challenge. Outsourcing leads to the externalisation of productive activities and their associated environmental impacts. In making and assessing energy policy, these macroeconomic dynamics need to be considered. If industrial production is outsourced to China and other countries, GHG emissions are not reduced but just geographically relocated.

For more information about the selected narratives, see this report.

 

Main Findings

 

The full report on ‘Narratives behind Energy Directives’ is available as Deliverable 5.4. The main findings are summarized below:

 

Is a deep decarbonisation of the EU’s electricity system by 2050 feasible and viable?

To ensure that the intermittent electricity generated from renewable sources is dispatchable at all times, grid flexibility needs to be improved. One possible way is through curtailment: this implies installing more renewable capacity than what is needed, and only using the electricity produced when it is needed. Another way is by storing excessive electricity when it is produced. Both methods are associated with GHG emissions: curtailment requires the construction of large amounts of power capacity, and the manufacturing of storage technologies is not carbon neutral.

We modelled two pathways for the decarbonisation of the EU’s power sector to 2050, the first with high curtailment and the second with high storage. In both pathways, cumulative GHG emissions up to 2050 do not decrease in line with EU climate targets, but amount to 21-24 Gt of CO2 equivalent, which is approximately 25% of the total carbon budget available to the EU up to 2100.

 


Figure 1. GHG emissions in the LSHC (left) and HSLC (right scenario, broken down into operational (flows, green line) and infrastructural (funds, blue line).

 


Find out more:

POLICY BRIEF: Decarbonisation of electricity: Is a deep decarbonisation of the EU’s electricity system by 2050 feasible and viable?

SCIENTIFIC PAPER: Di Felice LJ, Ripa M & Giampietro M (2018), 'Deep decarbonisation from a biophysical perspective: GHG emissions of a renewable electricity transformation in the EU. Sustainability, vol. 10, no. 3685. https://doi.org/10.3390/su10103685

 

What does renewable energy’s intermittent nature mean for the energy system, and do we know how to model it?

Adding storage to the discussion of renewable energy futures, it is important to ask how much storage would be needed in an electricity sector dominated by intermittent sources. We consider the cases of Germany and Spain. In both countries, the installed power capacity of intermittent renewables has been growing steadily over the past years. As shown in the figure below, however, this increase has not led to a reduction in conventional power capacity. Using detailed monthly data for the two countries, we checked how much storage would be needed in 2050 in a 100% intermittent electricity system, by calculating the worst annual hypothetical “failure event” – i.e., the longest time stretch during which each country would need to rely on storage only for electricity needs.

The results show that the energy gap would be of the order of 14 TWh in Germany and 6 TWh in Spain. In practical terms, this means that if each country were to use battery energy storage to cover this gap, the manufacturing of the batteries alone would generate emissions that are of the same order of what each country emits on a yearly basis.

 


Figure 2. Growth in power capacities over time during the Spanish (left) and German (right) renewable energy transition.

 


Find out more:

VIDEO: What purposes do intermittent renewables serve?

POLICY BRIEF: Intermittent renewable energy: What does renewable energy’s intermittent nature mean for the energy system, and do we know how to model it?

SCIENTIFIC PAPER: Renner A & Giampietro M (2020), 'Socio-technical discourses of European electricity decarbonization: Contesting narrative credibility and legitimacy with quantitative story-telling', Energy Research & Social Science, vol. 59, article 101279. DOI: 10.1016/j.erss.2019.101279.

PRESS RELEASE: La Vanguardia, 18/11/2019 (in Spanish)

 

What are the factors affecting the possible definitions of “efficiency” of an economy?

According to the narrative endorsed in the policy, energy efficiency is a means to: (i) achieve energy security; (ii) decarbonize the economy; and (iii) improve the competitiveness of industry in the Union. In this narrative, energy savings from efficiency have the potential of being the first fuel, reducing dependency on energy imports and scarce energy resources, as well as reducing greenhouse gas emissions and thereby mitigating climate change. However, when it comes to selecting efficiency targets, it becomes clear that the popularity of the concept of “efficiency” is partly due to its simple nature: a generic call for “doing more with less”. Any quantitative implementation of this semantic message is problematic in a real-world situation, particularly when efficiency is the mechanism by which other objectives are delivered rather than the end in itself.

A critical overview of the different definitions of energy efficiency has been carried out, and the factors affecting the possible definitions of “efficiency” of an economy identified (Figure 4). These factors include: (i) the degree of openness of the energy sector, (ii) the mix of primary energy sources and energy carriers used in society, (iii) the mix of economic activities carried out, (iv) a selective externalization of economic activities (imports of goods and services), and (v) credit leverage and quantitative easing boosting the GDP. The latter is crucial due to the massive financialization of the economy using credit leverage (fueled by quantitative easing) to boost the GDP independently from the actual production of biophysical goods. Sustaining the consumption of imported goods by generating higher debt levels is an effective way of reducing the perceived biophysical/energy input required by an economy.


Figure 3. The different factors affecting the energy and carbon intensity of an economy.

 


Find out more:

VIDEO: How should we measure efficiency?

VIDEO: The paradox of energy efficiency

SCIENTIFIC PAPER: Dunlop T. (2019), 'Mind the gap: A social sciences review of energy efficiency', Energy Research & Social Science, vol. 56, article 101216, doi: 10.1016/j.erss.2019.05.026.

SCIENTIFIC PAPER: Velasco-Fernández R, Dunlop T & Giampietro M (2020), 'Fallacies of energy efficiency indicators: Recognizing the complexity of the metabolic pattern of the economy', Energy Policy, vol. 137, article 111089, doi: 10.1016/j.enpol.2019.111089.

NEXUS TIMES: Issue II, Efficiency Paradox (September 2017).

 

Decoupling or delusion? Measuring GHG emissions displacement

The Paris Agreement, established in October of 2016, pledges that countries will limit global temperatures to two degrees Celsius above pre-industrial levels, with an aim to keep the rise below 1.5 degrees Celsius. While the Paris agreement has worked to reduce GHG emissions, both developed and developing are attempting to maintain their economic growth at sustainable rates: the idea is that we can continue growing our economies while reducing total carbon emissions to a safe level (aka decoupling).

Nevertheless, substantial outsourcing of production from industrial countries may create an illusion of decoupling. In MAGIC, we take a biophysical multi-scalar approach to model the outsourcing of GHG and energy as well as other nexus elements. Through a multi-scalar approach, we argue that the effects of outsourcing of the extraction of primary energy sources and conversion to energy carriers cannot be neglected and deserve much closer attention in order to better inform policy-making.

Building on the concept of virtual and embodied inputs and outputs in imports, we refer to externalized GHG emissions as GHG emissions embodied in the direct energy imports (e.g. emissions from coal extraction needed to produce the electricity that is imported). We calculated what would be needed if the importing countries had produced all their energy carries (EC) domestically. The focus is here placed only on the energy commodities metabolized by countries to produce energy carriers (electricity, heat, fuel) and exported within the timeframe 2009-2015. This implies that the externalized emissions referring to imported manufactured goods, that could much more important, were not accounted for.

When looking at Figure 5, some degree of decoupling appears to have taken place over the period of analysis, with GHG emissions decreased domestically in almost all the analyzed EU countries (positive values of the bars). However, the picture is different if we consider the effect of the externalized emissions: countries have reduced their carbon footprint locally (positive values) but increased it abroad (negative values of the bars). This is due to changes in the mix and uses of energy carrier and in the terms of trade.


Figure 4. Breakdown of GHG emissions allocated to the three ECs supply, including exports.
Positive emissions are taking place inside the borders, negative emissions are those externalized through imports

 


Find out more:

POLICY BRIEF: Decoupling at a glance: Counter evidence from outsourcing

NEXUS TIMES: Ripa, M., Di Felice, L. What if energy imports mattered? ISSUE IV: OUTSOURCING (March 2018)

Teams Involved