12th International Symposium on District Heating and Cooling

The <strong>12th</strong> <strong>International</strong> <strong>Symposium</strong> on District Heating and Cooling,September 5 th to September 7 th , 2010, Tallinn, EstoniaINTRODUCTIONIMPACT OF THE PRICE OF CO2 CERTIFICATES ON CHP ANDDISTRICT HEAT IN THE EU27Markus Blesl 11Institute of Energy Economics and the Rational Use of Energy (IER)In the current energy and climate policy debate, one ofthe key points is the discussion about emissionreduction targets and how they are spread amongdifferent world regions or countries and also amongdifferent sectors. To find a cost optimal burden sharingof an emission reduction target, the different reductionpotentials of the particular sectors or technologies haveto be known. To reach a reduction target, emissioncertificates in a country or region (like EU-27) areallocated among the different sectors or betweendifferent types of heat and power generationtechnologies. This allocation (for example, auctioning)of emission certificates is an important issue tonegotiate since the costs of buying certificates could bean important factor in technology choices forinvestment.The significant advantage of this approach is that theanalysis of the different competing pathways to achieveemission reductions also assesses how they influenceeach other. In the context of efficiency improvement inindustrial CHP and district heating and cooling, the useof waste heat becomes an interest field. Efficiencyimprovements in the residential or commercial sector isexamined in the topic of energy saving. Withoutanalysing the entire energy system the possibleadvantages of CHP and district heating and coolingcouldn‘t be taken into account. This shows thedifference to a standard cost potential curve approach,which has a fixed order of measures depending ontheir avoidance cost.This analysis will evaluate the reduction potential ofCHP plants or in general the production of districtheating and cooling in the EU-27 using the energysystem model, TIMES PanEU /Blesl et al 2008; Blesl2008; Blesl et al 2008b, Kuder Blesl 2009; Blesl 2009/.TIMES PAN-EU MODELThe energy system model, TIMES (The IntegratedMarkal Efom System), is a further development of thetwo model generators, MARKAL and EFOM-ENV,written in GAMS. TIMES was developed in recentyears within the „Energy Technology Systems AnalysisProgramme―(ETSAP) from the IEA with contributionfrom the IER. It is classified in one category with themodels MARKAL, EFOM or MESSAGE. The modelgenerator, TIMES, was developed in the generalUniversity of Stuttgart229modelling language of GAMS due to reasons of beingbetter transferable. TIMES is a multi-periodic linearoptimization model based on a technical approach atwhich single plants are aggregated. The purpose is theevaluation of the economically optimal energy supplystructure at a given need of end use energy and energyservices and also at given energy and climate policyrequirements. For this, the discounted system costs areminimized, whereas the single players (industry,supply, households) could have different economicconsiderations. The main objective of the modeldevelopment of TIMES is the flexible structure toensure a simple mathematic adjustment to therespective problem.The pan European TIMES energy system model(abbreviated as TIMES PanEU) is a model of 30regions which contains all the countries of EU-27 aswell as Switzerland, Norway and Iceland. The objectivefunction of the model is a minimization of the totaldiscounted system costs over the time horizon from2000 to 2050. A perfect competition among differenttechnologies and paths of energy conversion isassumed in the model. The TIMES PanEU modelcovers on a country level all sectors connected toenergy supply and demand such as the supply ofresources, the public and industrial generation ofelectricity and heat and the industrial, commercial,household and transport sectors. Both greenhouse gasemissions (CO2, CH4, N2O) and pollutant emissions(CO, NOx, SO2, NMVOC, PM10, PM2.5) are coveredby TIMES PanEU.The transport sector is disaggregated into four areas:road transport, rail traffic, inland shipping and.aviation.The road traffic includes five demand categories forpassenger transportation (car short distance, car longdistance, bus, coach, motor bikes) and one for freightservice (trucks). The rail traffic includes threecategories: rail passenger transportation (divided intoshort and long distance) and rail freight transportation.The transport modes of inland shipping and aviationare represented by a non-specified general processwhere the development of the transport demand isembodied by the final energy demand.The household sector contains eleven demandcategories (space heating, cooling, hot water, cooking,refrigeration, lighting, washing machines, laundry dryer,dishwasher, other electrics, other energy use), whereof