To achieve the climate goals of the Paris Agreement, greenhouse gas emissions from the electricit... more To achieve the climate goals of the Paris Agreement, greenhouse gas emissions from the electricity sector must be substantially reduced. We develop an agent-based model of the electricity system with heterogeneous agents who invest in power generating capacity under uncertainty. The heterogeneity is characterised by the hurdle rates the agents employ (to manage risk) and by their expectations of the future carbon prices. We analyse the impact of the heterogeneity on the transition to a low carbon electricity system. Results show that under an increasing CO2 tax scenario, the agents start investing heavily in wind, followed by nuclear and to some extent in natural gas fired power plants both with and without carbon capture and storage as well as biogas fired power plants. However, the degree to which different technologies are used depend strongly on the carbon tax expectations and the hurdle rate employed by the agents. Comparing to the case with homogeneous agents, the introduction...
Three key points of research:-We use DICE 2016R2, one of the most commonly used Integrated Assess... more Three key points of research:-We use DICE 2016R2, one of the most commonly used Integrated Assessment Models, to estimate the available carbon budget for meeting Paris styled temperature targets.-We update DICE using state-of-the art models of the carbon cycle and the heat uptake in the oceans.-This recalibration of DICE is used to show that the DICE estimates are off by at least a factor of five for ambitious climate targets. We, thus, recommend that the next version of DICE is updated to reflect these features.
In this paper we explore the competition between variable renewable energy sources (VRE) and a ca... more In this paper we explore the competition between variable renewable energy sources (VRE) and a carbon-neutral baseload technology in the transition to a low-carbon power system. We study a stylized system subject to a gradually increasing carbon tax using an agent-based model where agents are power companies investing in new capacity. The agents make predictions of the profitability of different investment options. Five electricity generating technologies are available in the model: coal, gas, wind, solar PV and a more expensive carbon-neutral baseload technology. We compare the output from our model with a corresponding optimization model. We present two main findings: (1) installed capacity of VRE initially increases with a carbon tax. However, once the carbon tax has reached a certain level the installed capacity of VRE starts to decline due to competition with the stylized carbon-neutral baseload technology. (2) With limited foresight we find that the model underinvests (first 25 years) in wind and then overinvests in wind compared to the optimal solution. The reasons for these dynamic phenomena are explained and an extensive sensitivity analysis is carried out.
We investigate how different global dietary scenarios affect the constraints on, and costs of, tr... more We investigate how different global dietary scenarios affect the constraints on, and costs of, transforming the energy system to reach a global temperature stabilization limit of 2 • C above the pre-industrial level. A global food and agriculture model, World Food Supply Model (WOFSUM), is used to create three dietary scenarios and to calculate the CH 4 and N 2 O emissions resulting from their respective food-supply chains. The diets are: (i) a reference diet based on current trends; (ii) a diet with high (reference-level) meat consumption, but without ruminant products (i.e., no beef, lamb, or dairy, only pork and poultry); and (iii) a vegan diet. The estimated CH 4 and N 2 O emissions from food production are fed into a coupled energy and climate-system optimization model to quantify the energy system implications of the different dietary scenarios, given a 2 • C target. The results indicate that a phase-out of ruminant products substantially increases the emission space for CO 2 by about 250 GtC which reduces the necessary pace of the energy system transition and cuts the net present value energy-system mitigation costs by 25%, for staying below 2 • C. Importantly, the additional cost savings with a vegan diet-beyond those achieved with a phase-out of ruminant products-are marginal (only one additional percentage point). This means that a general reduction of meat consumption is a far less effective strategy for meeting the 2 • C target than a reduction of beef and dairy consumption.
In two different energy economy models of the global energy system, the cost-effective use of bio... more In two different energy economy models of the global energy system, the cost-effective use of biomass under a stringent carbon constraint has been analyzed. Gielen et al. conclude that it is cost-effective to use biofuels for transportation, whereas Azar et al. find that it is more costeffective to use most of the biomass to generate heat and process heat, despite the fact that assumptions about the cost of biofuels production is rather similar in the models. In this study, we compare the two models with the purpose to find an explanation for these different results. It is found that both models suggest that biomass is most cost-effectively used for heat production for low carbon taxes (below 50-100 USD/tC, depending on the year in question). But for higher carbon taxes the cost effective choice reverses in the BEAP model, but not in the GET model. The reason for that is that GET includes hydrogen from carbon free energy sources as a technology option, whereas that option is not allowed in the BEAP model. In all other sectors, both models include carbon free options above biomass. Thus with higher carbon taxes, biomass will eventually become the cost-effective choice in the transportation sector in BEAP, regardless of its technology cost parameters.
To achieve the climate goals of the Paris Agreement, greenhouse gas emissions from the electricit... more To achieve the climate goals of the Paris Agreement, greenhouse gas emissions from the electricity sector must be substantially reduced. We develop an agent-based model of the electricity system with heterogeneous agents who invest in power generating capacity under uncertainty. The heterogeneity is characterised by the hurdle rates the agents employ (to manage risk) and by their expectations of the future carbon prices. We analyse the impact of the heterogeneity on the transition to a low carbon electricity system. Results show that under an increasing CO2 tax scenario, the agents start investing heavily in wind, followed by nuclear and to some extent in natural gas fired power plants both with and without carbon capture and storage as well as biogas fired power plants. However, the degree to which different technologies are used depend strongly on the carbon tax expectations and the hurdle rate employed by the agents. Comparing to the case with homogeneous agents, the introduction...
Three key points of research:-We use DICE 2016R2, one of the most commonly used Integrated Assess... more Three key points of research:-We use DICE 2016R2, one of the most commonly used Integrated Assessment Models, to estimate the available carbon budget for meeting Paris styled temperature targets.-We update DICE using state-of-the art models of the carbon cycle and the heat uptake in the oceans.-This recalibration of DICE is used to show that the DICE estimates are off by at least a factor of five for ambitious climate targets. We, thus, recommend that the next version of DICE is updated to reflect these features.
In this paper we explore the competition between variable renewable energy sources (VRE) and a ca... more In this paper we explore the competition between variable renewable energy sources (VRE) and a carbon-neutral baseload technology in the transition to a low-carbon power system. We study a stylized system subject to a gradually increasing carbon tax using an agent-based model where agents are power companies investing in new capacity. The agents make predictions of the profitability of different investment options. Five electricity generating technologies are available in the model: coal, gas, wind, solar PV and a more expensive carbon-neutral baseload technology. We compare the output from our model with a corresponding optimization model. We present two main findings: (1) installed capacity of VRE initially increases with a carbon tax. However, once the carbon tax has reached a certain level the installed capacity of VRE starts to decline due to competition with the stylized carbon-neutral baseload technology. (2) With limited foresight we find that the model underinvests (first 25 years) in wind and then overinvests in wind compared to the optimal solution. The reasons for these dynamic phenomena are explained and an extensive sensitivity analysis is carried out.
We investigate how different global dietary scenarios affect the constraints on, and costs of, tr... more We investigate how different global dietary scenarios affect the constraints on, and costs of, transforming the energy system to reach a global temperature stabilization limit of 2 • C above the pre-industrial level. A global food and agriculture model, World Food Supply Model (WOFSUM), is used to create three dietary scenarios and to calculate the CH 4 and N 2 O emissions resulting from their respective food-supply chains. The diets are: (i) a reference diet based on current trends; (ii) a diet with high (reference-level) meat consumption, but without ruminant products (i.e., no beef, lamb, or dairy, only pork and poultry); and (iii) a vegan diet. The estimated CH 4 and N 2 O emissions from food production are fed into a coupled energy and climate-system optimization model to quantify the energy system implications of the different dietary scenarios, given a 2 • C target. The results indicate that a phase-out of ruminant products substantially increases the emission space for CO 2 by about 250 GtC which reduces the necessary pace of the energy system transition and cuts the net present value energy-system mitigation costs by 25%, for staying below 2 • C. Importantly, the additional cost savings with a vegan diet-beyond those achieved with a phase-out of ruminant products-are marginal (only one additional percentage point). This means that a general reduction of meat consumption is a far less effective strategy for meeting the 2 • C target than a reduction of beef and dairy consumption.
In two different energy economy models of the global energy system, the cost-effective use of bio... more In two different energy economy models of the global energy system, the cost-effective use of biomass under a stringent carbon constraint has been analyzed. Gielen et al. conclude that it is cost-effective to use biofuels for transportation, whereas Azar et al. find that it is more costeffective to use most of the biomass to generate heat and process heat, despite the fact that assumptions about the cost of biofuels production is rather similar in the models. In this study, we compare the two models with the purpose to find an explanation for these different results. It is found that both models suggest that biomass is most cost-effectively used for heat production for low carbon taxes (below 50-100 USD/tC, depending on the year in question). But for higher carbon taxes the cost effective choice reverses in the BEAP model, but not in the GET model. The reason for that is that GET includes hydrogen from carbon free energy sources as a technology option, whereas that option is not allowed in the BEAP model. In all other sectors, both models include carbon free options above biomass. Thus with higher carbon taxes, biomass will eventually become the cost-effective choice in the transportation sector in BEAP, regardless of its technology cost parameters.
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Papers by Christian Azar