Energy

Submitted by Michael Rastall | published 29th Nov 2012 | last updated 3rd Dec 2012


Key Messages

  • Temperature is one of the major drivers of energy demand in Europe, affecting summer cooling and winter heating, for both the residential and service sectors. While cooling is predominantly powered by electricity, heating uses a wider mix of energy sources.
  • Climate change will have negative and positive effects on future energy demand, increasing summer cooling but reducing winter heating. These responses are largely autonomous, and can therefore be considered as an impact or an adaptation. These future changes also need to be seen in the context of other socio-economic drivers and energy/mitigation policy.
  • The ClimateCost study has assessed the potential impacts and economic costs of climate change on energy demand in Europe for two scenarios. A medium-high emission scenario (A1B) and a low emission mitigation scenario (E1), the latter consistent with the 2 degree stabilisation target. The study has considered uncertainty by considering a large range of climate model outputs for each of these scenarios. The study has used the POLES model, and considered future socio-economic change and future climate change together, as well as the change due to climate change alone. This takes account of growth and the effects of mitigation policy on overall energy demand and energy/generation mix.
  • The study has first assessed the increase in cooling demand in the residential and service sectors. Future cooling demand is expected to increase in the future, even without climate change, with EU27 electricity use for cooling increasing (on average) by around 3% per year during the century (A1B scenario).
  • Under a medium-high emission baseline (A1B), with no mitigation or adaptation, demand for cooling in the EU27 is expected to increase to a total of 145 Million tonne of oil equivalent (Mtoe) per year by 2050 and 269 Mtoe/year by 2100 from the combined effect of socioeconomic and climate change together (ensemble mean). Of this, the estimated increase in cooling due to climate change alone (above the A1B baseline without climate change) is 16 Mtoe/year by 2050 and 53 Mtoe/year by 2100. There is a strong distributional pattern of changes across Europe, with a much higher increase in cooling demand in Southern Europe.
  • There is a wide range around these central (mean) estimates, representing the range of results from different climate models. The study considered around ten alternative climate models and these reveal that the potential costs vary considerably: as an example, in the residential sector, cooling demand varies by +/-25% for the A1B scenario (2100).
  • Under an E1 stabilisation scenario, broadly equivalent to the EU 2 degrees target, with no adaptation, cooling demand is lower at around 113 Mtoe/year by 2050 and 139 Mtoe/year by 2100 (EU27, ensemble mean, combined effect of socio-economic and climate change), with around 10 Mtoe/year of this being due to climate change (ensemble mean). There is therefore a significant benefit compared to the A1B scenario. However, consideration of the range of climate models show that the increase in cooling could still be significant under this mitigation scenario, with high increases projected from the warmer models.
  • The additional costs of climate change alone – from the additional electricity consumption for more air conditioning due to higher temperatures - is estimated at around €22 billion/year in EU27 by 2050 rising to €89 billion/year under the A1B scenario (current values, undiscounted). However, this only reflects energy use, and the cost of investment costs of new air conditioners needs to be added to these values, estimated at an additional €8 billion by 2050 and € 20 billion/year by 2100, giving a total of € 30 billion/year and €109 billion/year in 2050 and 2100 respectively (current values, undiscounted). Under the E1 scenario, the total costs due to climate change (alone) are around € 20 billion/year across the period 2050 - 2100).
  • The study has also assessed the decrease in heating demand in Europe (a benefit) from climate change. The reduction in heating demand from climate change alone – on top of the baseline change – is estimated at -28 Mtoe/year by 2050 rising to -65 Mtoe/year by 2100. This is approximately a 10% and 20% reduction respectively on the future heating demand baseline. Under the E1 scenario, the reduction in heating demand is lower, estimated at -11 Mtoe/year by 2050 and -13 Mtoe/year by 2100. Again, there are large variations across the suite of climate models considered also large differences across regions of Europe, with the largest reductions in Western Europe.
  • While the physical energy reductions are higher than the increase in cooling demand, the relative costs are closer (as cooling is more expensive than heating). When considered in economic terms, the reduction in total heating demand (from climate change alone) is estimated at €34 billion/year in 2050 and €121 billion/year in 2100 for the EU27 under the A1B scenario (current prices, undiscounted) – about the same as the increase in cooling demand.
  • The study has also looked at the potential for planned adaptation, and the costs and benefits of possible measures or strategies for energy demand. This can include specific measures for addressing cooling or heating, or options that address both, notably low- and very low-energy consumption buildings, which reduce energy requirements. While these have the potential to be no regret, the analysis finds the benefits vary strongly across the range of climate projections, and with the assumptions on capital costs versus operating savings.
  • Climate change may also affect energy demand by changing water availability. Currently around 3.5% of electricity consumption in the EU is used for water supply and treatment. An initial analysis indicates that climate change could increase energy demand associated with water by 5% in 2050 and 12% in 2100 on average in the A1B scenario, with costs of €1.5 billion/year and €5 billion/year respectively (ensemble mean, undiscounted current prices). These increases are significantly reduced under the E1 scenario.
  • Climate change will also have effects on energy supply, notably on hydro-electric generation, but also potentially on thermal power (nuclear and fossil) plants and on other renewables. The scale of these effects has been considered using POLES.
  • Hydropower plants are affected by climate change by effects on precipitation and other factors. The impacts of climate change on hydro generation varies strongly according to the scenario and the climate models, and alternative models project very different levels of precipitation change, even in terms of the sign of change. Using an initial POLES analysis, the climate change associated with the A1B scenario (ensemble mean) is estimated to decrease European hydro generation by around -3% in 2050 and -8% in 2100, compared to the future baseline. The impacts are lower for E1 scenario at -2% and -3% respectively (ensemble mean). However, there is considerable uncertainty over these central estimates. There are also varying patterns across Europe, with the potential for decreasing discharge volumes for southern and east-central Europe, but potential rises for northern European, though this does not take annual variability into account.
  • Finally, higher temperatures from climate change may potentially affect power plant cooling and potentially reduce efficiency for thermal power plants (nuclear and fossil). Indicative results estimate that thermal and nuclear power generation could be reduced by up to 2-3% (thermal) and 4-5% per year (nuclear) for current plant under the A1B scenario. While changes in plant design and anticipatory action could reduce these significantly, the potential size of these effects indicates that further investigation is needed.

Citation

Citation. Mima S, Criqui P, and Watkiss P (2011). The Impacts and Economic Costs of Climate Change on Enery in Europe. Summary of Results from the EC RTD ClimateCost Project. In Watkiss, P (Editor), 2011. The ClimateCost Project. Final Report. Volume 1: Europe. Published by the Stockholm Environment Institute, Sweden, 2011. ISBN 978-91-86125-35-6.