We have co-authored the article City Energy Planning: Modeling Long-Term Strategies under System Uncertainties. The article was published in Energy Strategy Reviews, Volume 56, November 2024.
The study explores the role of city energy plans on future cost-efficient energy systems. A technology-rich cost-optimization model was developed using TIMES with intra-sectoral and inter-sectoral interactions and applied to the Gothenburg energy system.
The model outcomes are investigated with the application of policy-driven scenarios. The model is further tested under system uncertainties and price sensitivities identified using a participatory approach.
Collaborators: Professor Erik Ahlgren, Department of Space, Earth, and Environment, and PhD student Kushagra Gupta, Chalmers University of Technology, Sweden
Cities account for about 66 pct. of the total final energy consumption and more than 75pct. of global CO2 emissions. Subsequently, the green transition of city energy systems is key to reaching climate targets. We are supervising a PhD project focusing on city energy planning and modelling the Gothenburg city energy system as a case study.
The PhD is entitled “Policy-driven long-term development of city energy systems” and written by Kushagra Gupta at Chalmers University of Technology, Sweden.
The objectives of the research
To investigate how the city’s energy plans drive the long-term development of the city’s energy system.
To explore how the city energy plans coordinate with the national climate targets from a long-term perspective.
To identify optimal pathways for allocating resources to competing sectors during the transition.
Methodology
We have built a tailored energy systems model, the TIMES-NE city model. The model allows us to investigate the impact of the city energy plan on the long-term energy systems development.
The model represents a Northern European city setting. It’s based on the TIMES modeling framework developed and maintained by the IEA-ETSAP (International Energy Agency – The Energy Technology Systems Analysis Program).
The model has a representation of developments in the supply and demand side of the heating, electricity, and transportation sectors. The time horizon is from 2018-2050. The temporal resolution of the model is 12*24 to incorporate seasonal and hourly variations. The spatial boundary covers the area within the control of the municipal authorities. The city is further divided into multiple segments based on demographics.
Novelty of the study
The novelty of the study lies in adopting an integrated model approach. This approach allows for exploring intra- and inter-sectorial linkages.
Furthermore, this study explores the supply and demand side whereas most studies focus on either the supply or demand side. Subsequently, it enables us to account for the competition of resources among sectors.
Another important characteristic of this modelling study is the inclusion of customer perspective in investment decisions.
Scenarios
We are developing four scenarios for our analysis:
1) The reference scenario (REF) extends the base year model over the modelling time horizon. Already adopted national policy instruments such as energy and carbon tax, reduction obligations for the transport sector are included in the reference scenario. No additional policy measures or system improvements take place. Historical trends are projected into the future to evaluate the demands and shape a reference energy system.
2) The City Energy Plan scenario (CEP), in which the main goals identified under the Gothenburg Energy Plan 2021-2030 are applied and tested.
3) Integrated National Energy and Climate Plan (INEP), in which the national climate targets for Sweden are translated into targets for the city.
4) EU-Effort Sharing regulation (EU-ESR), Similar to INEP, in this scenario, Sweden’s commitment to EU-ESR is translated into climate targets for the city.
Gothenburg Energy Plan
The purpose of the energy plan is to promote the implementation of measures that lead to the city of Gothenburg reaching the environmental goal for the climate in the City’s Environmental and Climate Program 2021-2030.
The environmental and climate program 2021-2030 is the starting point for the energy plan. The plan describes how the City of Gothenburg will work to achieve the energy-related goals in the program.
Within the Gothenburg energy plan, the city has interim goals for the climate:
· The city of Gothenburg reduces energy use in homes and premises.
· The City of Gothenburg only produces energy from renewable sources.
· The city of Gothenburg reduces the climate impact of transport.
· The City of Gothenburg reduces the climate impact of purchasing.
The plans cover the energy produced or used within the municipal geographic area, the energy produced by the city of Gothenburg, and the energy used by municipality employees when traveling outside.
Institution: Chalmers University of Technology, Sweden
University Supervisor: Professor Erik Ahlgren, Department of Space, Earth and Environment
We have made a quantitative impact assessment related to load distribution for Varmelast. The impact assessment is part of the project Load Distribution based on Contract Prices. The aim of the project is improving the competitiveness of district heating.
Varmelast handles load dispatching of heat production in the greater Copenhagen area. Varmelast is organized as a cooperation between the three largest municipally owned heating companies in the Copenhagen metropolitan area: CTR, VEKS, and HOFOR.
Varmelast has published the EML report on Varmelast.dk.
One fundamental way of improving the competitiveness of district heating is to reform the load distribution system to ensure the lowest possible heating prices. Our analysis focused on the pricing of load distribution, comparing the advantages of different pricing systems.
Comparing load distribution systems
We based the assessment on the model TIMES-Varmelast. TIMES-Varmelast is an optimization model we built and tailored based on the internationally recognized TIMES modelling framework.
In the model, a load distribution system based on the contract prices is tested and compared with the existing system load distribution system based on minimizing the total costs of running the plants (e.g., fuel costs and revenue from the sale of electricity which are not part of the heating contract).
The analysis examines the total variable heat payment in 2030 under the two load distribution systems. The purpose was to contribute to understanding how changes in load distribution, and design of future contracts can affect the future heat price and production. Likewise, we also wished to gain insights into how electricity price assumptions and fuel price assumptions can affect future heat prices and production.
The TIMES-Varmelast model
The TIMES-Varmelast model is solved on an hourly level (8760 hours). We equipped it with a detailed representation of the greater Copenhagen district heating area. The model features 98 regions representing relevant district heating supply, transmission, and demand areas.
TIMES-Varmelast was developed from scratch within a few weeks by EML. The successful result has demonstrated the strength and flexibility of the TIMES modelling framework. Furthermore, we confirmed our ability to apply the TIMES framework quickly to any complex energy system case.
Key takeaways
Adopting the format of price-based contracts for load distribution results in substantial reductions in the costs and lower prices of district heating compared to cost-based load distribution.
Operating the format of price-based contracts for load distribution results in using the cheapest production plant at any given time.
Using the format of price-based contracts for load distribution results in considerable change in the district heating production. The impact includes decreased production from thermal plants while production from heat pumps and electric boilers increases.
The format of price-based contracts for load distribution is more robust to changes in electricity prices.
Modelling
We used the TIMES modelling framework to build the TIMES-Varmelast model for load distribution with different pricing systems, hourly time resolution, and detailed representation of the Greater Copenhagen district heating area.
Scenarios
We developed scenarios comparing price-based contracts for load distribution to the existing load distribution system (based on total costs) and ran sensitivity analyses.
Viet Nam Energy Outlook Report 2023 shows that the country is working steadfastly to reach net zero by 2050. Simultaneously, the country faces the challenge of a fast-growing economy and a huge increase in electricity demand.
One of the keys to this successful development is strategic energy planning. Subsequently, the Vietnamese government uses the TIMES-Vietnam energy systems model and the Balmorel-Vietnam for decision-making.
We have supported the development of the TIMES-Vietnam model for almost 10 years through our engagements in the Partnership Programme between Viet Nam and Denmark, headed by the Danish Energy Agency.
Regarding the Outlook Report, we have developed scenarios for the analyses. We have also assisted the Vietnamese authorities in building up their planning capacities. To this end, we have updated the technology catalog. The catalog has been integrated into the TIMES-VNM model. It includes technologies not yet being used in Viet Nam.
Some of the key takeaways of the Viet Nam Energy Outlook Report are
• The green energy transition is cost-efficient for Viet Nam • A steady increase in renewable energy investments is required from today • Energy efficiency is a cost-effective option to reach the net-zero target
We have developed an innovative model enabling the planning of an optimal energy island. The model makes it possible to generate scenarios and explore how to plan for the maximum economic returns for investors and developers. By analyzing various scenarios we can assess how differing conditions might affect the island’s operations, capacity, investment, and profitability.
Correspondingly, the model can generate scenarios showing the optimal scale of production of various e-fuels such as hydrogen, ammonia, methanol, and kerosene. Likewise, we can probe the most cost-efficient solutions for the management of electricity transmission.
The model is the result of a master’s thesis that we have supervised. It’s developed using the TIMES modelling framework and diverges from the prevalent demand-driven approach by adopting a price-driven strategy.
North Sea Energy Island
As a case study, the master’s thesis explores the strategic development and optimization of a North Sea Energy Island. The Danish government is planning for several energy islands in the North Sea. The Energy Island project directly addresses the European Union’s imperative to boost energy security and diminish its dependence on fossil fuel imports amidst evolving geopolitical and energy market dynamics.
The model employs an hourly resolution. It thus provides a detailed understanding of the island’s configuration and operations, enhancing the reliability of the results.
The developed model tool has proven reliable although some simplifications concerning the electricity market and transport operations were necessary. It can be integrated with other demand-driven studies to determine optimal operational strategies and future projections.
Results
The findings indicate that Germany and Denmark are the most viable markets for exporting the island’s electricity. However, producing hydrogen for export to the Netherlands and Belgium appears to be the most lucrative option, given the high industrial demand and pricing in these regions.
The study also notes that producing other e-fuels on the island would be economically feasible only under specific conditions with sufficiently high prices. These results suggest that the island’s most effective role may be as a hydrogen hub.
Furthermore, using an hourly resolution has proven instrumental in understanding storage operations on the island and achieving more dependable outcomes.
Modelling
We have developed a model of a North Sea energy island using the TIMES modelling framework.
Scenarios
We have generated various scenarios and assessed how differing conditions might affect the island’s operations, capacity, investment, and profitability.
Publication
The research is part of a master’s thesis at Danish Technical University.
We are hosting and supervising PhD student Daniele Mosso for one year. Daniele Mosso is doing his PhD at Politecnico di Torino. He is focusing on developing tools to modelling the water-energy-food nexus. The objective is to answer the following question: To what extent can energy be produced without significantly harming natural resources and related sectors?
Daniele Mosso spent the initial period of his PhD examining the major factors affecting the sustainability of energy systems. He concluded that land use, or the consumption of natural resources, is a major issue.
Limitations of existing models
Meanwhile, the existing Energy System Optimization Models (ESOMs) have limitations concerning sustainability and environmental aspects. The limitations can be overcome in several ways. Based on his initial research, Daniele Mosso opted to develop a tool to represent the sectors of agriculture, forestry, and land use (AFOLU) in an ESOM. The tool should make it possible to account for land and water consumption and related emissions.
Subsequently, the research of Daniele Mosso is in line with a new research project Energy Modelling Lab launched recently. The aim is to develop a prototype module representing the AFOLU sector for the TIMES modelling framework. The TIMES model is an energy system optimization model.
Exploring a soft-linking methodology
Furthermore, Daniele Mosso plans to devote the last part of his PhD to exploring a soft-linking methodology. One possibility is direct coupling with an integrated assessment model (IAM) representing natural resources.
At Politecnico di Torino, Daniele Mosso is a member of the MAHTEP Group (Modeling of Advanced Heat Transfer and Energy Problems). It’s a research team established at the end of 2019.
Modelling
We will develop a prototype module representing the AFOLU sector for the TIMES modelling framework.
Scenarios
We will test scenarios of the impacts of energy consumption of the AFOLU sector.
Publication
The research is part of a PhD to be finalized in 2026.
We are contributing to a project designating low-carbon solutions for Azerbaijan. The project result should be a Roadmap recommending relevant policies and technologies. The full title is “Low-Carbon Solutions in the Electric Power Sector of Azerbaijan Technical Assistance Project”.
Azerbaijan relies heavily on oil and gas, which has brought significant economic growth over the years. Oil, gas, and related petroleum products accounted for 91 percent of Azerbaijan’s total exports in 2022 and almost 48 percent of its GDP. Likewise, in 2021, natural gas dominated the electricity generation mix (94 percent). It was followed by hydropower (4.6 percent), waste and biomass incineration (0.7 percent), and solar and wind (0.5 percent).
Meanwhile, there is a vast potential for solar and wind power that investors have already begun to develop.
TIMES-Azerbaijan
Energy Modelling Lab carries out part of the energy systems modelling work for the project. Subsequently, we are updating and tailoring the TIMES-Azerbaijan model we have developed for the EU Commission in 2021. We are using the model to create three scenarios:
A Business As Usual (BAU) scenario reflects current and planned policies concerning low carbon penetration.
One scenario assumes high economic growth and targets carbon neutrality by 2050.
One scenario assumes low economic growth and targets carbon neutrality by 2050.
Stakeholder engagement
We have also been assigned to design and take charge of stakeholder engagement, consultation, and communications. The aim is to foster an understanding of the modelling approaches. The key stakeholders should reach and maintain agreement on scenario assumptions, and we should obtain the necessary feedback. The overall objective is to ensure the full capacity of ownership of the key stakeholders. Additionally, the Roadmap should be credible, robust, and functional.
Energy Modelling Lab has been subcontracted for the project by Tetra Tech. The project is implemented within the Memorandum of Understanding between the Ministry of Energy of Azerbaijan and the European Bank for Reconstruction and Development EBRD on technical support related to the development of the electric power sector of the Republic of Azerbaijan.
Modelling
We are updating and tailoring the TIMES-Azerbaijan model using the TIMES energy systems modelling framework.
Scenarios
We are creating a business as usual (BAU) scenario and two scenarios targeting net zero for the energy sector by 2050.
Stakeholder engagement
We are taking charge of designing the consultation and communications to ensure the full ownership of key stakeholders.
The study aims to identify the policy instruments needed to accelerate the uptake of hydrogen fuel cells for the shipping industries in Denmark, Norway, and Sweden.
Hydrogen fuel cells are promising for reducing emissions from shipping. However, their adoption is limited by high costs, lack of regulations, and lack of infrastructure. This is why there is a need for policies that spur investments in hydrogen fuel cells.
The three policy packages
Together with our fellow researchers, we tested three policy packages with different degrees of ambition (low, medium, and high). Our findings indicated that the proposed taxes on CO2 emissions and fossil fuels can help drive the transition away from fossil fuels. Meanwhile, the complete transition requires a ban on the use of fossil fuels.
The three policy packages were formulated based on discussions during workshops with key stakeholders from Nordic Shipping. During the workshops, we also learned that the participants are paying high attention to a “chicken and egg” paradox: Without the demand for green hydrogen, no supply, and vice versa. This has not been reflected in previous studies.
Correspondingly, a coordinated regional approach and cross-sector and cross-industry collaboration are needed. Otherwise, we cannot overcome the paradox and help balance the supply and demand for Nordic shipping
Modelling
MODEL
We used the TIMES-NEU model, an economic model generator for energy systems, to evaluate the three different policy packages. EML has developed the TIMES-NEU model.
SCENARIOS
Estimated total fuel consumption in PJ/year; CO2 emissions by fuel in thousand tons of CO2 emissions/year; revenue from the tax on fossil fuels in million Euros/year; ferry segment fuel consumption in PJ/year.
RESULTS
The main finding was that policies are needed to spur investments. Meanwhile, it’s necessary to ban fossil fuels to complete the green transition of shipping.
Other scenarios included in the study show estimated CAPEX and OPEX in million Euros/year, estimated CAPEX and OPEX for the ferry segment in million, and estimated CAPEX and OPEX of the mandate of ferries to use hydrogen in comparison to the policy packages in million Euros/year.
We will be collaborating with Danish, Swedish, Norwegian, and Finnish partners on a major research project entitled SpeedLocal. The aim is to speeding up the Nordic green transition. Together we will develop guidance tools for addressing the “not in my backyard” complexities and the challenges of integrating energy planning on the national level with implementation on the local level.
The research project is a transdisciplinary initiative. It engages experts in stakeholder engagement, policy analysis, landscape analysis, participatory processes, and energy system modelling. The final guidance tools will also reflect the results from three case studies: the Norwegian municipality of Trondelag, the Swedish municipality of Skaraborg, and the Danish municipality of Bornholm.
Emphasis on local values
In these places, the local authorities are in the process of implementing national energy policies. EML will focus on adapting the TIMES-Nordic energy system model to work on municipality levels. Also, we will work on the case study of Bornholm. Working closely together with Bornholm municipality, we will identify the barriers to green transition and strategies to overcome them.
An important dimension of the project is the emphasis on the values of local nature and landscapes. An overarching aim is thus to find ways to integrate local insights and considerations into the broader national and Nordic energy planning analyses. By doing so, the legitimacy and policy relevance could improve.
Modelling
The TIMES-Nordic model will be adapted for local cases and integrate specific constraints
Analysis
The analysis of the results will be translated into a Strategy Kit that contains instructions and guidance.
Results
The Strategy Kit can be utilized to formulate evidence-based policy recommendations.
At present, the agricultural and forestry sectors’ emissions account for almost 20% of the total global emissions. Even so, these two sectors are largely neglected in the existing energy system modelling frameworks. There is simply no available data module to enable analyses. Meanwhile, we expect that our new research project will remedy this.
The research project is named Agriculture, Forestry, and Other Land Use Sector Modeling in TIMES (AFOLU). The result should be a demo model of a new data module. The demo model will be standardized and flexible. Thus, it will enable energy system modellers to properly model factors such as the forest capacity of CO2 uptake. Other important factors could be the consequences of replacing crops for biofuel production or optimizing irrigation systems for instance.
Energy Modelling Lab will carry out the research project together with four partners: E4SMA, the Institute for Energy Technology (IFE), University College Cork (UCC), and VITO. We expect to finalize the new module in 2025. We are receiving funding from The Energy Technology Systems Analysis Program, IEA-ETSAP.
Transformative step
Our project builds on ongoing work by Energy Modelling Lab and E4SMA to develop a demo version of the AFOLU module. The primary objective is to consolidate knowledge from various partners and create a standardized, flexible AFOLU module that can seamlessly integrate with any TIMES model.
The new module will enable the ETSAP community to conduct a more integrated, holistic scenario analysis. It will be possible to consider the dynamic interactions between energy systems and the AFOLU sector. Moreover, we see it as a transformative step toward enabling energy system modellers to address climate change impacts and designate pathways to sustainable, net-zero economies.
Duration: 2023-2025
Client: The Energy Technology Systems Analysis Program, IEA-ETSAP
