Energy system pathways of a decarbonization of the Norwegian oil-dependent economy

1. Energy system pathways of a
decarbonization of the Norwegian oil‐
dependent economy
Eva Rosenberg, Kari Aamodt Espegren & Pernille Seljom
Department of renewable energy systems, IFE
11.12.2019 CSIRO Energy 76th Semi‐annual ETSAP meeting

2. Transition pathways
01 Norwegian energy system
02 TIMES energy system pathways
Outline

3. Part I – Norwegian energy system

4. The Norwegian energy system
4
• Electricity generation mainly based on hydropower
• 2017: 96%
• Large water reservoirs ‐ 50% of European capacity
• Cold climate → High demand for space hea ng
• Historically electricity has been relatively inexpensive
• Energy‐intensive industry
• Electricity based heating system
• Large potential for onshore and offshore wind power
• EVs dominate new car sale
• Petroleum sector‐ oil & gas export
• 25% of EUs gas demand in 2017
• 2 % of global oil demand
Photo by Martin Adams on Unsplash
Photo by Jason Balckeye on Unsplash
Photo from Norsk Petroleum

5. Final energy consumption in Norway
5
0
50
100
150
200
250
2000 2010 2015 2016 2017
Final energy demand, TWh
Electricity Coal Oil Natural gas Bio Waste District heat
53%
30%

6. 11.12.2019 6
?
Referanse: SSB 2018
‐
10
20
30
40
50
1990 2000 2017 2050
CO2 emissions, million ton/year
Unknown
Other
Transport
Industry
Oil and gas
A transition requires CO2 cuts in transport, industry, and oil
and gas

7. 7
• 2030: non‐ETS target
• Minimum 45% reduction in
2030 compared to 2005
• Minimum 31 % reduction in
2030 compared to 2017
• 2050: Climate neutrality
• 80‐95% reduction compared to
1990
• 1990: 51.2 Gton CO2 eq.
• 2017: 52.9 Gton CO2 eq.
Norwegian GHG emission targets
15
20
25
30
35
40
45
50
55
60
2005 2010 2015 2016 2017
Norwegian Emissions (Gton CO2 eq.)
ETS Non‐ETS

8. 8
• Biomass resources are limited and have multiple applications
Energy system
Biofuel
production
Transport
Industry
products
Charcoal
Heat Import?Export
Norwegian
forest
Other bioresources?
Todays harvest ≈ 22 TWh
2017: 52 TWh
~ 50 %
? TWh
~ 50 %
Potential harvest ≈ 50 TWh
Eff. ~ 50 %

9. 9
Norwegian petroleum sector
• Official production prognosis from Norwegian Petrolum: https://www.norskpetroleum.no/
• Erna Solberg, November 2018: «The person shutting down the Norwegian petroleum sector is not
yet born»

10. 10
Relationship between electricity use and GDP
0
1000
2000
3000
billion NOK
GDP
‐
50
100
150
TWh/ year
Electricity
consumption
0
500
1000
1500
kWh/GDP
Electricity intensity
Prod.tax. &
subs.
Other
Energy
intensive
industry
Oil & Gas

11. • PM17
Official Prognosis: 0.8 % GDP
growth per year and capita
• Constant
0 % GDP growth per year and
capita
• BNP‐2015
Replace GDP from oil and gas
11.12.2019
11
Power intensive industry cannot replace all welfare from oil & gas
0 1000 2000 3000 4000 5000
BNP‐2015
Constant
PM17
20152050
Electricity consumption, TWh/ yeat
Oil and gas Power intensive industry
Other Energy efficiency

12. 11.12.2019
12
Illustration of 500 TWh
Aluminium smelters
Current
New
Wind farms
Current
New
Kart: NVE

13. Part II – TIMES energy system pathways
Norwegian Energy Road Map 2050

14. • Norwegian pathways to a low‐carbon
energy system in 2050
• Presumption: Norwegian welfare is remained
with a phase‐out of petroleum sector
• New revenue from service and industry sector
• Impact of low carbon future on the energy
system, power sector and the overall
economy
• Energy system model: TIMES‐Norway
• Power market model: EMPS
• CGE model: REMES
Norwegian Energy Roadmap 2050
14
Figure: Adobe Stock

15. • Developed together with the Norwegian Water and
Resources Directorate
• Norwegian Spot price regions
• Detailed end‐use and power sector
• 260 time‐slices
• Currently converted to VEDA_FE from Answer
• Flexible temporal resolution
• High detailed demand sectors
• Ongoing research focus:
• Flexibility
• Transport and Buildings
TIMES‐Norway 2015‐2050
1
5

16. • Norwegian pathways to a low‐carbon
energy system in 2050
• Norwegian welfare level is remained
• Constant GDP per population
• Sensitivity
• 0.8 % increase in GDP per pop and
year
• Scenarios
• REFerence
• Petroleum activity according to official
prognosis
• No CO2‐limitation
Norwegian Energy Roadmap 2050
16
• INDustry
• Petroleum activity = 50% of current activity
• Income loss covered by
• New industry
• Hydrogen production NG with CCS
• Biofuels limited and high costs
• SERvice
• No petroleum activity
• Welfare loss covered by
• Highly increase in service sector
• High energy efficiency implementation
• Biofuels at current cost and unlimited

17. 17
Demand projections varies between
scenarios ‐ Change from 2015 to 2050
• REF
• Industry and buildings +7%
• Road transport +51%
• SER
• Industry and buildings ‐7%
• Road transport: 0%
• IND
• Industry and buildings +26%
• Road transport +51 %
• IND‐0.8%
• Industry og buildings +60%
Change from 2015 to 2050
‐20
‐10
‐
10
20
30
40
50
60
70
80
REF SER IND IND_0.8%
Change in demand, TWh/year
Industry Buildings

18. • Final energy demand 2050,
relative 2015
• REF 5%
• SER ‐22%
• IND ‐2%
• IND‐0.8% 18%
• Electricity share 2050
• REF 56%
• SER 63%
• IND 72%
• IND‐0.8% 71%
• (2015: 51%)
18
Results‐ Final energy demand 2030 & 2050 depends on end‐use demand
and technologies
‐ 50 100 150 200 250 300 350
2015
2030
2050
2030
2050
2030
2050
2030
2050
REF SER IND IND 0.8%
Final energy demand, TWh/year
Fossil Bio Electricity Hydrogen District heat Energy efficiency

19. 19
Results‐ Emission cuts is most challenging in Industry
0 20 40 60
2015
2015
2030
2050
2030
2050
2030
2050
2030
2050
REFSERINDIND 0.8%
Stat.TIMES
Mill. ton CO2 per year
Industry
Buildings
Transport
Energy supply
Agriculture and other
Oil and gas

20. 20
Results‐ Electricity consumption increases in all scenarios except
SERvice
‐
10
20
30
40
50
60
70
80
90
100
Industry Buildings Transport incl. H2‐prod.
Electricity consumption 2050, TWh/year
2015
REF
SER
IND 0%
IND 0.8%+9%
‐23%
+36%
+76%
+11%
‐5%
+3%
+24%
+13 TWh
+25 TWh

21. • Bio fuel share 2050
• REF 11%
• SER 75%
• IND 22%
• Electricity share 2050
• REF 18%
• SER 25%
• IND 32 %
• Hydrogen share 2050
• REF 0%
• SER 0%
• IND 46%
21
Results‐ Fuel use in transport sector is scenario dependent
‐ 20 40 60 80
2015
2030
2050
2030
2050
2030
2050
2030
2050
REF SER IND IND 0.8%
Fuel use, TWh/year
Fossil Bio fuels Electricity Hydrogen

22. 22
Results‐ Significant new wind power investments in all scenarios
130 150 170 190 210 230
2015
2030
2050
2030
2050
2030
2050
2030
2050
REF SERIND
IND‐
0.8%
Power generation, TWh/year
Hydropower Wind power PV Other
17 TWh
19 TWh
49 TWh
87 TWh
2 TWh

23. 23
Power generation INDustry scenario
depends on policy and technology
development
• IND1: Basis
• IND1E: No energy efficiency
• IND1T: 2017‐taxation
• IND1W: Onshore wind power <26 TWh
• IND1W2:W + increased grid fee 10
øre/kWh
• IND1W3: W + double grid fee
• IND1W4: W3 + cheaper PV
130 140 150 160 170 180 190 200 210
IND1
IND1E
IND1T
IND1W
IND1W2
IND1W3
IND1W4
Power generation (TWh/ year in 2050)
Hydro Wind onshore Wind offshore PV

24. • There are several transition pathways to a low‐carbon Norwegian energy
system
• Dependent on future revenue streams
• Technology development; e.g. hydrogen & sustainable biofuels
• A low‐carbon future requires considerably changes to the Norwegian
energy system
• More electrification/ H2 and use of biomass
• New power generation
• Actions are required today to facilitate a Norwegian transition to a
low‐carbon energy system
• Alternative revenue streams than oil and gas
• Infrastructure
Conclusions‐ Norwegian energy system pathways
24

25. Thank you
Dr. Pernille Seljom
Research Scientist
Pernille.Seljom@ife.no