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CO2 emissions accounting: Whether, how, and when different allocation methods should be used
KTH, School of Industrial Engineering and Management (ITM), Industrial Economics and Management (Dept.), Sustainability and Industrial Dynamics.ORCID iD: 0000-0001-7028-0624
2014 (English)In: Energy, ISSN 0360-5442, Vol. 68, 811-818 p.Article in journal (Refereed) Published
Abstract [en]

CO2 abatement and the transition to sustainable energy systems are of great concern, calling for investments in both old and new technologies. There are many perspectives on how to account for these emissions, not least when it comes to how the roles of different alternative energy production options should be emphasized. Confusion and conflicting interests regarding the appropriate accounting methods for allocating CO2 emissions interfere with effective energy policy and the efficient use of corporate and national resources. Possible investments in the Stockholm district heating network and how they interact with the electric power grid illustrate the influence of different accounting methods on alternative energy production options. The results indicate that, for several abatement options, performance in terms of reduced CO2 emissions might be either improved or degraded depending on whether or how alternative electricity production is accounted for. The results provide guidelines for whether, how, and when different allocation methods are appropriate, guidelines relevant to academia, industrial leaders, and policymakers in multiple areas related to power production and consumption.

Place, publisher, year, edition, pages
2014. Vol. 68, 811-818 p.
Keyword [en]
District heating, Emissions accounting, Power production
National Category
Energy Engineering Other Engineering and Technologies not elsewhere specified Business Administration
URN: urn:nbn:se:kth:diva-142659DOI: 10.1016/ 000335874300085ScopusID: 2-s2.0-84898039009OAI: diva2:704072
Investments in energy efficiency and climate change abatement: revising marginal cost curves as an optimization model
Swedish Energy Agency, 35894-1

QC 20140613

Available from: 2014-03-11 Created: 2014-03-11 Last updated: 2015-04-14Bibliographically approved
In thesis
1. Investments, system dynamics, energy management and policy: a solution to the metric problem of bottom-up supply curves
Open this publication in new window or tab >>Investments, system dynamics, energy management and policy: a solution to the metric problem of bottom-up supply curves
2015 (English)Doctoral thesis, comprehensive summary (Other academic)
Abstract [en]

Today, issues such as climate change and increased competition for scarce resources puts pressure on society and firms to transform. Change is not easily managed though, especially not when relating to production or consumption of energy carriers such as district heating or electric power. These systems do not only have strong dynamics internally, but dynamics between multiple technological systems must sometimes be considered to effectively manage response and strategies in relation to change.

During the early 1980s, an optimisation model founded on an expert-based approach was developed based on the partial equilibrium model to enable the evaluation of different actions to reach a target. This model — often referred to as marginal abatement cost curve (MACC) or conservation supply curve (CSC) — is used by academia, industry and policymakers globally. The model is applied for causes such as energy conservation and waste management, but also within the climate change context for optimising CO2 reductions and governmental policy. In this context, the model is used by actors such as the Intergovernmental Panel on Climate Change (IPCC), International Energy Agency (IEA) and World Bank, and by the consultancy firm McKinsey & Company, who use it extensively in different analysis.

This model has many drawbacks in relation to managing interdependencies between different options, but more specifically the metric used for ranking options with a negative marginal cost has a design flaw leading to biased results. As a solution Pareto optimisation has been suggested, but is problematic given the dynamics within and between energy systems.

The purpose of this compilation dissertation is to improve the ability for industry and policymakers to effectively manage change and reach set targets. In particular it develops our knowledge of how to account for option interdependency within and between technological systems. Furthermore, the ranking problem relating to expert-based least cost integrated planning is addressed.

This dissertation also provides policy and managerial implications relating to the issues of energy conservation, CO2 abatement, and SOx and NOx reduction in relation to the district heating system in Stockholm. Implications are also provided for the interaction with other systems such as the Nordic electric power system.

Abstract [sv]

Klimatfrågan och konkurrens om knappa resurser medför ett förändringstryck på nationer och företag. Att hantera förändringar har aldrig varit enkelt, vilket är tydligt bland företag inom energisektorn såsom el och fjärrvärmeproducenter. Energisystemen dessa företag är del av har stark intern dynamik, men även dynamik mellan olika energisystem är vanligt. Detta måste tas i beaktande när strategier och planer för att hantera förändring utformas.

Under början av 1980-talet skapades en optimeringsmodell baserad på den nationalekonomiska jämviktsmodellen för att kunna utvärdera olika specifika möjligheter att nå ett mål, t.ex. energibesparingar. Denna modell, som idag ofta benämns MACC (Marginal Abatement Cost Curves) eller CSC (Concervation Supply Curves), används idag av akademin, industrin och myndigheter inom områden så som energibesparingar, minskade CO2-utsläpp, sophantering och design av ekonomiska policyinstrument. De icke-akademiska användarna inkluderar FNs klimatorgan IPCC, IEA och Världsbanken. Även konsultfirman McKinsey&Company använder modellen regelbundet i olika studier.

Tyvärr har modellen många begräsningar när det kommer till att hantera dynamiker mellan de specifika åtgärder som identifierats för att nå ett mål. Den allvarligast begränsningen utgörs dock av ett optimeringsfel som leder till felaktiga slutsatser om prioriteringen mellan de åtgärder som har en negativ marginalkostnad. Som en lösning på detta problem har pareto-optimering föreslagits, vilket denna avhandling dock visar är problematiskt på grund av de dynamiker som finns inom och mellan energisystem.

Det övergripande syftet med denna avhandling är att förbättra möjligheten att hantera förändringar och nå uppsatta mål. Specifikt diskuteras hur beroenden mellan olika åtgärder för att nå det satta målet kan hanteras. Avhandlingen adresser även problemet att prioritera mellan åtgärder med negativ marginalkostnad.

Utöver detta bidrar avhandlingen med praktiska implikationer för politiker, myndigheter och företag involverade i fjärrvärmeproduktion i Stockholm. Slutsatser dras kring energibesparingar och minskade utsläpp av CO2, SOx och NOx. Praktiska implikationer ges även för hur system som detta fjärrvärmesystem samverkar och interagerar med det nordiska elsystemet.

Place, publisher, year, edition, pages
Stockholm: KTH Royal Institute of Technology, 2015. 56 p.
TRITA-IEO, ISSN 1100-7982 ; 2015:03
Investments, Energy Management, Policy, MACC, CSC climate change abatement, energy efficiency and conservation, system dynamics
National Category
Business Administration Economics Energy Engineering
Research subject
Industrial Engineering and Management
urn:nbn:se:kth:diva-161904 (URN)978-91-7595-483-7 (ISBN)
Public defence
2015-05-08, E3, Osquarsbacke 14, KTH, Stockholm, 14:30 (English)
Investments in energy efficiency and climate change abatement: revising marginal cost curves as an optimization model
Swedish Energy Agency, 35894-1

QC 20150414

Available from: 2015-04-14 Created: 2015-03-18 Last updated: 2015-04-14Bibliographically approved

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