EC Projections Workshop

Energy Paper 68 – baseline energy and CO2 projections, 2000 – 2020, published by DTI, November 2000. No plans to revise projections yet.

UK Climate Change Programme – projections of all GHGs, including policies and measures, published by DEFRA, November 2000. No

plans to revise yet.

DEFRA is the department of environment, food and rural affairs)

DTI is the department of trade and industry

Projections and Policy: Departmental Responsibilities

DTI

DEFRA

DTI/DEFRA

Key DepartmentsArea

Energy projections

Climate Change Policy

CO2 Emission projections

Other GHG projections

DTIEnergy policy

DEFRA

Model Design

Two main components of the model:

sectoral econometric models of final energy demand

a LP model of electricity supply

Model Design Electricity supply model: key features

a linear programme covers existing major power producer power stations plus renewable plants

based on pre-determined fuel costs, plant costs etc

determines the overall least cost means of supply

models main coal plants individually

determines the merit order - the cheapest plants

forecasts what new plant type is most economic

model constrained to meet SOx/NOx emissions limits

Other Models and Procedures

A simulation CHP model

A refinery model

An Excel based workbook to calculate emissions on a UK source, end user and fuel basis and on a detailed and summary IPCC basis (with 3000 lines of visual basic programming)

DTI UK Energy Model OverviewOG

other wisdom

ENPworld fuel prices

UK fuel prices

final energy demand model

fuel demand by sectorcost of electricity generation

energy related emissions

electricity demand

electricity supply optimisation model

matrix of emission coefficientsother emissions

electricity prices

ENPHMTOEF

GDP, activity assumptions

total emissions, IPCC basis

other assumptions

emissions inventory model

DOMESTIC TRANSPORT SERVICE INDUSTRY

Real personaldisposableincome (RPDI)

GDPOECD GDP

GDP GDP

DomesticEnergy Prices

Petrol pricesDERV pricesAviation fuelprices

Service SectorEnergy Prices

Industrial SectorPricesFossil Fuel pricesElectricity prices

Number of UKhouseholds

Population &Number of UKhouseholds

Service SectorOutput

Industrial SectorOutputAssumptions

Externaltemperatures(HDD)

Externaltemperatures

MajorAppliance take-up

VehicleregistrationsCar ownershiplevelsTrack length,Goods lifted

Majorappliances, Airconditioning,Computer etcequipment

Final Energy Demand Sector Drivers

Key Energy Modelling AssumptionsUsed in EP68

1. Incomes and economic growth

2. Energy Prices

3. Household numbers

Key Energy Modelling AssumptionsUsed in EP68

-3 economic growth cases(low, central and high)

-2 energy price cases(low and high)

Many tests of sensitivity(including nuclear lifetimes, energy prices,

temperature…)

UK GDP Growth Assumptions

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

%g

row

th

central low high

ARA Coal Price - EP68Assumptions and Actual Prices

0.00

10.00

20.00

30.00

40.00

50.00

60.0019

95

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

$/to

nne

coal actual coal EP68 low coal EP68 high

Brent Oil Price - EP68Assumptions and Actual Prices

0.00

5.00

10.00

15.00

20.00

25.00

30.0019

95

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

$/ba

rrel

oil actual oil EP68 low oil EP68 high

Beach (landed) Gas Price - EP68Assumptions and Actual Prices

0.00

5.00

10.00

15.00

20.00

25.0019

95

1997

1999

2001

2003

2005

2007

2009

2011

2013

2015

2017

2019

penc

e/th

erm

gas actual gas EP68 low gas EP68 high spot gas prices

Key Assumptions on Population: Projection of total households in England,

1996 - 2021 Projection of total households in England, 1996 - 2021From 1996 to 2021, households in England are projected to rise by 3.8 million or19%

15

16

17

18

19

20

21

22

23

24

25

1981 1991 1996 2001 2006 2011 2016 2021

Year

1.1% 1.0% 0.8% 0.7% 0.7% 0.7% 0.6%Annual average growth rate

POLICIES AND MEASURES

Policies in the baseline (EP68) for 2010:

Policy CO2 Saving (MtC)

10% renewables in generation 2.5

Climate change levy 2.0

Road fuel duty 1 – 2.5

POLICIES AND MEASURES

Policies in the baseline (EP68) for 2010:

Policy CO2 Saving (MtC)

10% renewables in generation 2.5

Climate change levy 2.0

Road fuel duty 1 – 2.5

POLICIES AND MEASURES

Policies in the Climate Change Programme for 2010:

Policy CO2 Saving (MtC)

Climate change agreements/IPCC 2.5

EU agreement on CO2 from cars… 4.0

Domestic energy efficiency 4.0-5.5

Emissions trading scheme (1st stage) 2.0 +

Other Around 5.0

UK greenhouse gas emissions 1990-2020(without/ with Climate Change Programme)

100

120

140

160

180

200

220

1990 2000 2010 2020

MtC

EP68 GGEsGGEs after CCPKyoto target

100

120

140

160

180

200

220

1990 2000 2010 2020

MtC

EP68 GGEsGGEs after CCPKyoto targetCO2CO2 after CCPCO2 goal

Change in Baseline Emission Projections(2000 View against 1995 View)

-20 -15 -10 -5 0 5

refineries

residential

services

road transport

other

industry

power stations

Total

Main Reasons for Change in Baseline Emission Projections

Climate change levymore CHP

Lower offshore emissions

Effects of road fuel duties

ReasonsArea

industry

Road transport

other

10% renewables generationlower electricity demandPower stations

Openness

Energy Modelling - EP681)..Energy industries are consulted2)..A working paper was issued for comment3)..Modellers available for informal discussion4)..Energy Model Review - openness is a key issue

1)..Consultation Paper published for comment2)..Dialogue with companies, other bodies

Climate Change Programme

Government Energy Review

1)..Encourages more openness2)..Recommends a new sustainable energy unit, with more analytical capability, across Govt

Model Parameters

Energy Modelling - EP68

1)..Model elasticities last published in EP65 in March 19952)..Occasional papers submitted to conferences 3)..Elasticities reported in annual Energy Reports4)..Modellers available for informal discussion of model parameters5)..Energy Model Review will assess how best to provide information