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A thoroughly modern energy system model

Dr Adam Hawkes at his desk in front of computer screen

Adjacent Oil & Gas finds out what it takes to develop a new energy system model from Dr Adam Hawkes, Deputy Director of the Sustainable Gas Institute (SGI) at Imperial College London…

Energy system modelling is a fast-evolving field, and one that is increasingly important in a world attempting to mitigate climate change and its effects. An energy system model can be a useful tool to assess the relationship between the energy system, the economy, technology and the environment, but the vast number of variables means such tools are hugely difficult to develop with any level of reliability.

At the Sustainable Gas Institute (SGI) at Imperial College London, researchers are challenging some of the core assumptions used in traditional energy system models as they build a new one. Their vision is of an energy system model with the nuance to accommodate different approaches to investment decision-making across countries. As the Paris Agreement solidifies into specific national actions, this type of modelling will be crucial to underpinning those actions and may well provide the next generation of evidence to support negotiations.

Dr Adam Hawkes, deputy director of SGI and Senior Lecturer in Energy Systems at the Centre for Process Systems Engineering, tells Adjacent Oil & Gas that the model tries to embody the main principles of simplicity, transparency, and flexibility.

What are some of the limitations of existing energy system modelling tools?

Arguably, energy system modelling has not really been a science, to date. There are only a few existing models whose methodology has been subject to rigorous peer review. Another key limitation at the moment is transparency – the models need to be more transparent.

They make assumptions about how investment choices are made, what drives investment, and what factors will lead to certain decisions. Often, we feel, those assumptions are not appropriate and could be improved or made specific to particular sectors or applications.

It’s also worth mentioning in the context of oil and gas that the focus in these models is generally downstream. They tend to focus on conversion of energy to other forms, on end use and consumption. Energy supply is quite simplistic in some of the models; we feel that this is a limitation we can do something about.

How can the model you have developed provide better insights on upstream activities for oil and gas firms?

The modelling we’re doing has detailed characterisation of upstream activity that does not exist in other models. We are able to look at the engineering or economic characteristics of upstream technologies across oil and gas, and how their changing performance influences the case for investment in those technologies. We can build an R&D investment case around developing better or lower cost systems in particular areas, or we can ask, what are the key technologies across the upstream that would lead to cleaner production of oil and gas?

Sustainability is increasingly important upstream; this means being able to produce oil and gas in the most environmentally friendly way possible, but also in a way that is economically competitive.

There’s also a strategic view which is quite useful for upstream. There are questions around which investments might be more exposed to the issue of unburnable carbon, for example, and why this is so. This model will be able to make those trade-offs, look at potential futures, and inform the board level of oil and gas companies on the soundest strategy.

What does the model reveal about the potential role of natural gas in sustainable energy systems?

This model is under development, so you’ll have to wait and see, but there are some things we can say about that. As we transition to a very low carbon energy system, gas is a useful energy vector and it is often presented as a transition fuel. This is because there are great opportunities for switching from more CO2-intensive options towards gas, particularly from coal to gas in the power sector, but also in industry and potentially other areas.

What’s also becoming clear is that in the long term, all fossil fuels are extremely challenged in terms of their role in sustainable energy systems; that is to say, energy systems where global warming is limited to 2 degrees Celsius or even lower (1.5 degrees). The long term modelling usually suggests negative CO2 emissions will be necessary globally by the latter half of this century. This makes for a really challenging situation for gas, oil and coal, and points to the need for very low carbon options for the use of these fossil fuels.

How does the energy system model accommodate new technologies, research and development?

It’s really hard to predict new technology. Imagine a hundred years ago trying to predict the technologies we have today. You’d have no chance, right? First and foremost, we try using conventional methods to understand future technologies, future costs and performances. This involves a great deal of horizon-scanning for data, and talking to experts including those at Imperial College about specific technologies, trying to understand where we’re going. That’s one way to do it.

But there’s another way which I think may be more important. Because we really don’t know the potential of some technologies, we use the model to pose ‘what if?’ questions.

We say, what if we had a technology with this performance and this cost and it could fulfil this function in the energy system? We can add that technology to the model, then run the model again to see what difference it makes in terms of reducing the total system costs or otherwise enabling a low carbon future. It turns the question around. You can ask, for example, what cost target would this technology have to hit in order to be competitive? The information then feeds into the R&D process for that technology.

We do incorporate technical learning in the model. This is a relationship between the aggregate capacity installed or the aggregate energy production over a long time period, with the cost of that technology. As you double the capacity of solar energy, for example, its price goes down by 15-20%. We can actually model that kind of relationship and see the feedback in the model.

How likely is it that carbon capture and storage (CCS) will have a significant impact in the near future, given the decisions made in the UK to halt pilot projects?

The UK is one specific case, but still the decision to halt the pilot projects does not seem helpful to me. Our modelling certainly suggests CCS is an absolutely crucial technology for achieving sustainability in the energy system. Almost all the models agree on this.

The IPCC’s Fifth Assessment Report showed that without CCS the cost of mitigation increases dramatically. It is an extremely important technology.

I would also say that the space around CCS – the technology, its performance, its cost – has not been explored to a sufficient degree yet. I think there are a lot of interesting questions in relation to CCS that could materially impact the unburnable carbon question. This is the topic of the next white paper from the SGI, which will be released in May.

Globally, CCS is important and there are projects going on worldwide showing that it is possible. There are a lot of challenges, obviously. One of the big questions coming up is likely to be, how do you create a sustainable market for CCS? What is the market driver that makes this happen? Pilot projects with investment from government are one thing, but really that’s just the first step. It’s a very interesting question and not an easy one to answer.

How do you see the model evolving over the coming years with the implementation of new climate measures and so on?

An internal beta version of our model will be ready in the next month. This is proof of concept and includes about half of the global economy models. We’re looking to have a version one by the end of the year. But it’s not a case of building the model and that’s it. It’s a continuous process of improvement.

This is an ongoing research activity in the SGI and Imperial College. We have a dedicated team and we will continue to build up and improve the model over time until we feel we have the most robust representation of energy system change possible. ■

Dr Adam Hawkes

Deputy Director

Sustainable Gas Institute

@SGI_London

SGI@imperial.ac.uk

 

From Adjacent Oil & Gas 3, May 2016

28/04/16

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