markal presentation p.r. shukla. market allocation model multi-period linear programming...
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MARKAL PRESENTATION
P.R. Shukla
MARKet ALlocation Model
Multi-period linear programming formulation Decision variables like,
Investment in technology capacities & their utilization
Energy consumption Emissions Electricity generation in different time periods
MARKAL Overall Functioning
Techno-economic Database
Economic Scenario
EmissionScenarioMARKAL
•Consumption and production of energy•Marginal ‘values’ of energy forms and emissions
•Introduction and abandonment of technologies
Bottom up View of the Energy-Economy-Environment System
MINING IMPORT COLLECTION RENEWABLE EXPORT
COALN. GAS
OILBIOMASSNUCLEAR
RENEWABLE
45
ENVIRONMENT
ELECTRICITY PRODUCTION
COAL GAS HYDRO
NUCLEAR SOLAR
ENERGY
FUEL PROCESSING
PETROLEUM REFINERY GAS PROCESSING
75
ENDUSE DEVICES
PUMP TRACTOR
FURNACE MOTOR
LIGHT BULB COOLER
BUS TRAIN
STOVE FAN
ECONOMY
AGRICULTURE
INDUSTRY
TRANSPORT
COMMERCIAL
RESIDENTIAL
35
90
TECHNOLOGY CAPITAL
EMISSIONS
Typical Reference Energy System
EXTRACTION
IMPORT
EXTRACTION
EXTRACTION
EXTRACTION
IMPORT
IMPORT
IMPORT
COAL BASED
GAS BASED
REFINERY 2
REFINERY 1
ELECTRIC TRAIN
DIESEL BUS
TRANSPORTEND USE
TECHNOLOGIES
ELECTRICITY GENERATION
PETROLEUM PROCESSING
S O
U R
C E
S
D E
M A
N D
Model Formulation
Objective FunctionTo minimize the discounted sum, over 40 yrs, of investment, operating and maintenance cost of all technologies plus the cost of energy imports and carbon tax
Subject to1. Demand Constraint (one for each end use demand)
Cig(t) >=
demandk (t)
i DMD G GRD
V k DM, t TWhere
DMD…end-use demand technologyGRD…set of grades technologies/energy sourcesDM….class of all end use demandsT…..set of time periodsCig(t)…capacity of technology i of grade G in period t
Model Formulation (cntd.)
1. Capacity transfer constraints
(to account for technology vintage carry over time periods)
2. Energy carrier balance constraints
(supply >= demand of fuel)
3. Cumulative reserve constraints
(fuel extraction <= total reserves)
Model Formulation (cntd.)
4. Electricity balance constraints
(day and night time modelling for electricity system)
5. Process technology capacity utilization constraints
(process activity <= available capacity)
6. Electricity production capacity constraints
(electricity generation <= available capacity)
Model Formulation (cntd.)
7. Electricity peaking constraints
(extra capacity to meet peak demand)
8. Total emissions constraints
(Carbon, SO2 etc)
Model Formulation (cntd.)
Software Configuration of the Indian MARKAL
ScenarioGenerator
MUSS
COMPILATION
ADAPTED TO IM
GAMSADAPTED TO IM
ANALYSIS
MUSS COMPATIBLE DATA
GAMS DEFINITIONS
TEXT OUTPUT
.DBF FILESFOXPRO
FOXPRO/LOTUS
SPREADSHEETS
TABLES GRAPHSWORDPERFECT DRAWPERFECT
LOTUS
DATA
FOXPRO/LOTUS
LEGENDSIM: INDIAN MARKALMUSS: MARKAL USERS SUPPORT SYSTEM
Modelling Non-linearities
Grades for:
Technologies Energy Resources
TECHNOLOGY DEPLOYMENT
A Probabilistic Approach
Pacific Northwest National LaboratoryBattelle Memorial Institute
`
Median CostTechnology 2
Market Price
TECHNOLOGY COMPETITION
A Probabilistic Approach
`
Median CostTechnology 1
Median CostTechnology 2
Median CostTechnology 3
Market Price
What are likely Future Energy Trends What are likely Future Energy Trends underunder Business-as-Usual (BAU)Business-as-Usual (BAU)
From 1995-2035
Energy Grows 3 times
Commercial Energy 4 times
Coal remains mainstay
High Oil/Gas Imports
Traditional Biomass Stagnates
0
10
20
30
40
50
1995 2005 2015 2025 2035Year
Exa
Jou
les
Coal Oil Gas HydroNuclear RenewablesBiomass
From 1995-2035
Industry & Residential Grow 3.5 times
Commercial Grows 9 times
Agriculture Stagnates
Transport Grows 5 times
Sectoral Energy consumption (EJ)
0
5
10
15
20
25
1995 2005 2015 2025 2035Year
Exa
Joul
es
AgricultureCommercialTransportResidentialIndustry
From 1995-2035
Industry share stagnates around 45%
Agriculture share declines from 28% to 10%
Commercial and Residential grow faster
Sectoral Electricity consumption (TWh)
0
500
1000
1500
2000
1995 2000 2005 2010 2015 2020 2025 2030 2035
Con
sum
ptio
n (T
Wh)
Industry Residential Commercial Agriculture Transport
From 1995-2035
Coal share declines from 63% to 45%
Gas share increases from 8% to 23%
Hydro stagnates around 20%
Electricity Generation Capacity (GW)
0
100
200
300
400
1995 2005 2015 2025 2035
Cap
acit
y (G
W)
Coal Gas Oil Hydro Nuclear Renewable
From 1995-2035
Coal share declines from 74% to 61%
Gas share increases from 7% to 19%
Hydro stagnates around 16%
Electricity Generation (TWh)
0
500
1000
1500
2000
2500
1995 2000 2005 2010 2015 2020 2025 2030 2035
Gen
erat
ion
(TW
h)
Coal Gas Oil Hydro Nuclear Renewable
Carbon Emissions (MT)
0
200
400
600
800
1995 2000 2005 2010 2015 2020 2025 2030 2035Year
Car
bon
(M
T)
212
730
Sectoral Carbon Emissions (MT)
0
200
400
600
800
1995 2005 2015 2025 2035Year
Mil
lion
Ton
s
Power Sector Industry TransportResidential Agriculture Commercial
Carbon Emissions
RESIDENTIAL COMMERCIAL INDUSTRY
TRANSPORT AGRICULTURE POWER SECTOR
RESIDENTIAL COMMERCIAL INDUSTRY
TRANSPORT AGRICULTURE POWER SECTOR
0%
28%
22%1%
2%
47%
0%
33%
18%2%
3%
44%5% 0%
14%1%
35%45%
1995 2010
2035
SO2 Emissions ('000 Tons)
0
1
2
3
4
5
6
7
1995 2000 2005 2010 2015 2020 2025 2030 2035
Year
Em
issi
ons
Power sector Industry Total
SO2 Kuznets Curve
20352020
0
2
4
6
8
10
0 2000 4000 6000 8000 10000 12000
GDP per Capita (PPP$)
SO2
Em
issi
ons
(Mill
ion
Ton
s)
High Base Low
2025
NOX Emissions (Million Tons)
0
2
4
6
8
10
1995 2000 2005 2010 2015 2020 2025 2030 2035
Year
Em
issi
ons
Power sector Transport Total
GDP, Energy and Electricity
0
500
1000
1500
2000
2500
3000
1975 1985 1995 2005 2015 2025 2035
Year
En
ergy
GDP Commercial energy Electricity
Marginal cost of electricity generation (Cents/kWh)
0
1
2
3
4
5
6
7
8
9
1995 2000 2005 2010 2015 2020 2025 2030 2035
Year
Cos
t
Peak Off-Peak Average
Mitigation ScenarioAnalysis
Marginal Cost of Carbon MitigationMarginal Cost of Carbon Mitigation(1995-2035)(1995-2035)
6 billion tons of mitigation below $25/ ton of carbon
0
10
20
30
40
50
60
1 2 3 4 5 6 7
Carbon abatement (billion ton)
Co
st (
$/T
on
of
Car
bo
n)
Coal Demand
0
4
8
12
16
20
1995 2005 2015 2025 2035
Exa
jou
les
Gas Demand
0
2
4
6
8
10
12
1995 2005 2015 2025 2035
Exa
jou
les
Reference 1 BT (5%) 2 BT (10%)
3 BT (15%) 4 BT (20%) 5 BT (25%)
Implications of Mitigation TargetsCoal to Gas Switch
Electricity Price under Mitigation Scenarios
Average LRMC
0
1
2
3
4
5
6
7
8
9
10
1995 2005 2015 2025 2035
ce
nts
pe
r k
Wh
Reference 1 BT (5%) 2 BT (10%)
3 BT (15%) 4 BT (20%) 5 BT (25%)
Electricity Price Rises with Mitigation
In 2035, price can more than double
Reference 1 BT (5%) 2 BT (10%)3 BT (15%) 4 BT (20%) 5 BT (25%)
Electricity Price under Mitigation Scenarios
Peak
0
3
6
9
12
15
1995 2005 2015 2025 2035
cen
ts p
er k
Wh
Off-Peak
0
3
6
9
12
15
1995 2005 2015 2025 2035ce
nts
per
kW
h
Renewable Electricity Capacity
0
20
40
60
80
100
120
1995 2005 2015 2025 2035
Gig
a W
att
Share of Renewable
0
5
10
15
20
25
30
1995 2005 2015 2025 2035
Per
cen
tag
e
Reference 5 % Mitigation15 % Mitigation 25 % Mitigation
Implications of Mitigation TargetsRenewable Electricity
Reference 5 % Mitigation
15 % Mitigation 25 % Mitigation
Implications of Mitigation TargetsWind and Small Hydro Power
0
4
8
12
16
20
1995 2005 2015 2025 2035
Cap
acit
y (G
W)
0
2
4
6
8
10
1995 2005 2015 2025 2035
Cap
acit
y (G
W)
Wind Small Hydro
Reference 5 % Mitigation15 % Mitigation 25 % Mitigation
Implications of Mitigation TargetsSolar PV and Biomass Power
0
10
20
30
40
50
60
1995 2005 2015 2025 2035C
apac
ity
(GW
)0
2
4
6
8
10
12
14
16
18
1995 2005 2015 2025 2035
Cap
acit
y (G
W)
Solar PV Biomass
Consumption Trends(Million Tons)
High Growth Medium Growth Low Growth
Oil Products Coal
0
300
600
900
1200
1500
1975 1985 1995 2005 2015 2025 2035
0
100
200
300
400
1975 1985 1995 2005 2015 2025 2035
Commercial Energy Demand and Intensity
0
200
400
600
800
1000
1200
1975 1985 1995 2005 2015 2025 2035
Mto
e
0
10
20
30
40
50
1975 1985 1995 2005 2015 2025 2035
toe
/ mill
ion
Rs.
High GrowthMedium Growth
Low GrowthLow efficiency
Commercial Energy IntensityCommercial Energy
0
5
10
15
20
25
30
35
40
45
50
1995 2005 2015 2025 2035
Exa
jou
les
High Growth5.5%
Medium Growth5%
Low Growth4.5%
Commercial Energy Demand
Economic Growth Drives Energy Demand
Gradual Efficiency Improvement
Limited Fuel Substitution
Coal and Oil Demand
Coal
0
200
400
600
800
1000
1200
1400
1995 2005 2015 2025 2035
Mil
lio
n T
on
s
Oil
0
50
100
150
200
250
300
350
1995 2005 2015 2025 2035
Mill
ion
To
ns
High Growth Medium Growth Low Growth
0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
0.8
1975 1985 1995 2005 2015 2025 2035
toe/
tho
usa
nd
$
High Growth Medium Growth
Low Growth Low efficiency
Energy Intensity
Energy Intensity improvement rate
1.5%
0
200
400
600
800
1000
1200
1995 2005 2015 2025 2035
Mill
ion
To
ns
High Growth Medium Growth Low Growth
Carbon Emissions
From 1995-2035
Under BAU, Carbon Emissions rise 360%
Rise can be 470% for high growth case
0.0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
0.8
0.9
1975 1985 1995 2005 2015 2025 2035
ton
s o
f ca
rbo
n/ t
ho
usa
nd
$
High Growth Medium Growth
Low Growth Low efficiency
Carbon Intensity
Carbon Intensity Improvement rate
1.8 %
Coal Demand
0
4
8
12
16
20
1995 2005 2015 2025 2035
Exa
jou
les
Gas Demand
0
2
4
6
8
10
12
1995 2005 2015 2025 2035
Exa
jou
les
Reference 1 BT (5%) 2 BT (10%)
3 BT (15%) 4 BT (20%) 5 BT (25%)
Implications of Mitigation TargetsCoal to Gas Switch
How Carbon Mitigation affects Production Cost?
20152035
0
50
100
150
200
250
Cos
t of
Alu
min
um
Pro
du
ctio
n
ALUMINUM
20152035
0
50
100
150
200
250
300
350
Cos
t of
Ste
el P
rod
uct
ion
STEEL
1 BT (5%) 3 BT (15%) 5 BT (25%)
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