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Update green hydrogen cost and tax parameterization and near-term bounds for electrolysis and CCU technologies #1882

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Nov 20, 2024
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Update green hydrogen cost and tax parameterization and near-term bounds for electrolysis and CCU technologies #1882

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23eb16d
Merge branch 'develop' of https://github.com/remindmodel/remind into …
Nov 5, 2024
3a6c0ec
update initialization of learning curve for electrolysis, higher CAPE…
Sep 9, 2024
e512635
add upper and lower bounds for 2025 electrolysis capacities based on …
Nov 11, 2024
f9e7893
clean up bounds in CCU module and insert bounds for near-term capacit…
Nov 11, 2024
c825f9e
set slower default ramp-up of electrolysis tax for EU regions
Nov 13, 2024
2b59623
set higher flexibility subsidy for electrolysis by default to better …
Nov 13, 2024
13e6cda
remove trailing white spaces
Nov 13, 2024
7b95a91
formating changes required by code check
Nov 13, 2024
6470188
enhance documentation of electrolysis in generisdata_tech.prn
Nov 15, 2024
7ae165a
adapt electrolysis parameter also in generisdata_tech_SSP1.prn and ge…
Nov 15, 2024
1d4d02b
update changelog
Nov 15, 2024
1e11a73
Merge branch 'develop' of https://github.com/remindmodel/remind into …
Nov 20, 2024
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3 changes: 3 additions & 0 deletions CHANGELOG.md
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Expand Up @@ -30,6 +30,9 @@ The format is based on [Keep a Changelog](https://keepachangelog.com/en/1.0.0/).
- **core** changed adjustment cost of geohe (central heat pumps), elh2 (electrolysis), MeOH (FT-Synthesis: H2-to-Liquids)
and h22ch4 (methanation: H2-to-Gas) to better reflect upscaling dynamics
[[#1823](https://github.com/remindmodel/remind/pull/1823)]
- **core** increase electrolysis CAPEX and slightly adjust default setting for electrolysis taxation and flexibility benefit,
add near-term bounds for electrolysis and synthetic fuel deployment
[[#1882](https://github.com/remindmodel/remind/pull/1882)]

### added
- **32_power** increase minimum required dispatchable back-up capacity for VRE integration
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14 changes: 14 additions & 0 deletions core/bounds.gms
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Expand Up @@ -288,6 +288,20 @@ loop(te$(sameas(te,"ngcc") OR sameas(te,"ngt") OR sameas(te,"gaschp")),
vm_cap.lo("2020",regi,te,"1")$pm_histCap("2020",regi,te) = 0.95 * pm_histCap("2020",regi,te);
);


*** bounds on near-term electrolysis capacities
*' set lower and upper bounds for 2025 based on projects annoucements
*' from IEA Hydryogen project database:
*' https://www.iea.org/data-and-statistics/data-product/hydrogen-production-and-infrastructure-projects-database
*' distribute to regions via GDP share
*' in future this should be differentiated by region based on regionalized input data of project announcements
*' 2 GW(el) at least globally in 2025, about operational capacity as of 2023
vm_cap.lo("2025",regi,"elh2","1")= 2 * pm_eta_conv("2025",regi,"elh2")*pm_gdp("2025",regi)
/ sum(regi2,pm_gdp("2025",regi2)) * 1e-3;
*' 10 GW(el) at maximum globally in 2025
vm_cap.up("2025",regi,"elh2","1")= 10 * pm_eta_conv("2025",regi,"elh2")*pm_gdp("2025",regi)
/ sum(regi2,pm_gdp("2025",regi2)) * 1e-3;

*** fix capacities for advanced bio carbon capture technologies to zero in 2020 (i.e. no BECCS in 2020)
vm_cap.fx("2020",regi,te,rlf)$(teBio(te) AND teCCS(te)) = 0;

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2 changes: 1 addition & 1 deletion core/declarations.gms
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Expand Up @@ -416,7 +416,7 @@ vm_costAddTeInv(tall,all_regi,all_te,emi_sectors) "additional sector-specific

vm_co2CCS(ttot,all_regi,all_enty,all_enty,all_te,rlf) "all different ccs. [GtC/a]"

vm_co2capture(ttot,all_regi,all_enty,all_enty,all_te,rlf) "all captured CO2. [GtC/a]"
v_co2capture(ttot,all_regi,all_enty,all_enty,all_te,rlf) "all captured CO2. [GtC/a]"
v_co2capturevalve(ttot,all_regi) "CO2 emitted right after capture [GtC/a] (in q_balCCUvsCCS to account for different lifetimes of capture and CCU/CCS te and capacities)"

v_prodUe (ttot,all_regi,all_enty,all_enty,all_te) "Useful energy production [TWa]"
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6 changes: 3 additions & 3 deletions core/equations.gms
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Expand Up @@ -744,7 +744,7 @@ q_emiCdrAll(t,regi)..
)
* ( !! scaled by the fraction that gets stored geologically
sum(teCCS2rlf(te, rlf), vm_co2CCS(t, regi, "cco2", "ico2", te, rlf))
/ (sum(teCCS2rlf(te, rlf), vm_co2capture(t, regi, "cco2", "ico2", "ccsinje", rlf)) + sm_eps)
/ (sum(teCCS2rlf(te, rlf), v_co2capture(t, regi, "cco2", "ico2", "ccsinje", rlf)) + sm_eps)
)
!! net negative emissions from co2luc
- p_macBaseMagpieNegCo2(t,regi)
Expand Down Expand Up @@ -829,7 +829,7 @@ q_budgetCO2eqGlob$(cm_emiscen=6)..
*' Definition of carbon capture :
***---------------------------------------------------------------------------
q_balcapture(t,regi,ccs2te(ccsCo2(enty),enty2,te)) ..
sum(teCCS2rlf(te,rlf), vm_co2capture(t,regi,enty,enty2,te,rlf))
sum(teCCS2rlf(te,rlf), v_co2capture(t,regi,enty,enty2,te,rlf))
=e=
!! carbon captured in energy sector
sum(emi2te(enty3,enty4,te2,enty),
Expand All @@ -852,7 +852,7 @@ q_balcapture(t,regi,ccs2te(ccsCo2(enty),enty2,te)) ..
*' atmosphere)
***---------------------------------------------------------------------------
q_balCCUvsCCS(t,regi) ..
sum(teCCS2rlf(te,rlf), vm_co2capture(t,regi,"cco2","ico2",te,rlf))
sum(teCCS2rlf(te,rlf), v_co2capture(t,regi,"cco2","ico2",te,rlf))
=e=
sum(teCCS2rlf(te,rlf), vm_co2CCS(t,regi,"cco2","ico2",te,rlf))
+ sum(teCCU2rlf(te,rlf), vm_co2CCUshort(t,regi,"cco2","ccuco2short",te,rlf))
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23 changes: 11 additions & 12 deletions core/input/generisdata_tech.prn
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Expand Up @@ -69,16 +69,16 @@ luse


+ elh2 dot dhp h2turb h2curt h2turbVRE elh2VRE h22ch4 MeOH
tech_stat 4 5 5 5 3 3
inco0 1350 480 360 510 700 510 0.1 700 1300
tech_stat 3 5 5 5 3 3
inco0 3500 480 360 510 700 510 0.1 700 1300
constrTme 2 2 1 2 2 2 1 2 2
mix0
eta 0.73 0.30 0.80 0.40 0.62 0.40 0.73 0.8 0.7
omf 0.05 0.03 0.03 0.03 0.05 0.03 0.00 0.04 0.05
omv 3 12 12 24 0 24 3 25
lifetime 30 25 25 30 30 30 30 30 30
incolearn 1200
ccap0 0.0065
incolearn 3370
ccap0 0.00077
learn 0.15


Expand Down Expand Up @@ -188,14 +188,13 @@ Explanations:

Electrolysis - elh2
learning parameterization:
Assume that 10 GW(el) electrolysis installed globally and CAPEX of 800 EUR/kW(el) in 2025
(slightly optimistic due to recent policies, e.g. EU Hydrogen Bank and US Inflation Reduction Act)
(Odenweller et al. (2022), https://doi.org/10.1038/s41560-022-01097-4,
Ueckerdt et al. (2021), https://doi.org/10.1038/s41558-021-01032-7, Fig. S3).
10 GW(el) * 0.65 (elh2 efficiency) * 1e-3 ~ 0.0065 TW(H2) = ccap0
800 EUR/kW(el) / 0.65 (elh2 efficiency) * 1.1 (EUR to USD, 2015) ~ 1350 USD/kW(H2) = inco0
Assume floor cost: 100 EUR/kW(el)
100 EUR/kW(el) / 0.75 (long-term elh2 efficiency) * 1.1 (EUR to USD, 2015) ~ 150 USD/kW(H2) -> incolearn = 1200
Initialize learning curve for electrolysis at 0.5 GW(el) installed globally at CAPEX of 2300 USD/kW(el) in 2020.
Based on Ramboll 2023, https://energycentral.com/system/files/ece/nodes/658117/ghpp.pdf
and IEA 2024 Hydrogen Review, https://www.iea.org/reports/global-hydrogen-review-2024
0.5 GW(el) * 0.65 (elh2 efficiency) * 1e-3 ~ 0.00077 TW(H2) = ccap0 (for 2020)
2300 USD/kW(el) / 0.65 (elh2 efficiency) ~ 3500 USD/kW(H2) = inco0 (for 2020)
Assume floor cost: 100 USD/kW(el)
100 USD/kW(el) / 0.75 (long-term elh2 efficiency) ~ 133 USD/kW(H2) -> incolearn = 3370

Direct Air Capture - dac
learning parameterization:
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8 changes: 4 additions & 4 deletions core/input/generisdata_tech_SSP1.prn
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Expand Up @@ -68,16 +68,16 @@ learn 0.108 0.12 0
luse 0.09 0.021

+ elh2 dot dhp h2turb h2curt h2turbVRE elh2VRE h22ch4 MeOH
tech_stat 4 5 5 5 3 3
inco0 2000 480 360 510 700 510 0.1 700 800
tech_stat 3 5 5 5 3 3
inco0 3500 480 360 510 700 510 0.1 700 800
constrTme 2 2 1 2 2 1 1 2 2
mix0
eta 0.73 0.30 0.80 0.40 0.62 0.40 0.73 0.8 0.7
omf 0.05 0.03 0.03 0.03 0.05 0.00 0.00 0.03 0.03
omv 3 12 12 24 0 3 12
lifetime 30 25 25 30 30 30 30 30 30
incolearn 1500
ccap0 0.013
incolearn 3370
ccap0 0.00077
learn 0.15

+ tdels tdbiogas tdfosgas tdbiohos tdfoshos tdh2s tdh2t
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8 changes: 4 additions & 4 deletions core/input/generisdata_tech_SSP5.prn
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Expand Up @@ -67,16 +67,16 @@ learn 0.084 0.096
luse 0.09 0.021

+ elh2 dot dhp h2turb h2curt h2turbVRE elh2VRE h22ch4 MeOH
tech_stat 4 5 5 5 3 3
inco0 2000 480 360 510 700 510 0.1 700 800
tech_stat 3 5 5 5 3 3
inco0 3500 480 360 510 700 510 0.1 700 800
constrTme 2 2 1 2 2 1 1 2 2
mix0
eta 0.73 0.30 0.80 0.40 0.62 0.40 0.73 0.8 0.7
omf 0.05 0.03 0.03 0.03 0.05 0.00 0.00 0.03 0.03
omv 3 12 12 24 0 3 12
lifetime 30 25 25 30 30 30 30 30 30
incolearn 1500
ccap0 0.013
incolearn 3370
ccap0 0.00077
learn 0.15

+ tdels tdbiogas tdfosgas tdbiohos tdfoshos tdh2s tdh2t
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4 changes: 2 additions & 2 deletions core/postsolve.gms
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Expand Up @@ -581,7 +581,7 @@ pm_PEPrice(ttot,regi,entyPe)$(abs (qm_budget.m(ttot,regi)) gt sm_eps) =
q_balPe.m(ttot,regi,entyPe) / qm_budget.m(ttot,regi);

*** calculate share of stored CO2 from captured CO2
pm_share_CCS_CCO2(t,regi) = sum(teCCS2rlf(te,rlf), vm_co2CCS.l(t,regi,"cco2","ico2",te,rlf)) / (sum(teCCS2rlf(te,rlf), vm_co2capture.l(t,regi,"cco2","ico2",te,rlf))+sm_eps);
pm_share_CCS_CCO2(t,regi) = sum(teCCS2rlf(te,rlf), vm_co2CCS.l(t,regi,"cco2","ico2",te,rlf)) / (sum(teCCS2rlf(te,rlf), v_co2capture.l(t,regi,"cco2","ico2",te,rlf))+sm_eps);

*** emissions reporting helper parameters
o_emissions_bunkers(ttot,regi,emi)$(ttot.val ge 2005) =
Expand Down Expand Up @@ -732,7 +732,7 @@ o_emissions_other(ttot,regi,emi)$(ttot.val ge 2005) =
***Carbon Management|Carbon Capture (Mt CO2/yr)
o_capture(ttot,regi,"co2")$(ttot.val ge 2005) =
sum(teCCS2rlf(te,rlf),
vm_co2capture.l(ttot,regi,"cco2","ico2","ccsinje",rlf)
v_co2capture.l(ttot,regi,"cco2","ico2","ccsinje",rlf)
)*o_emi_conv("co2");

***Carbon Management|Carbon Capture|Process|Energy (Mt CO2/yr)
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26 changes: 17 additions & 9 deletions main.gms
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Expand Up @@ -371,14 +371,14 @@ $setglobal emicapregi none !! def = none
*'
*' This module defines the carbon price pm_taxCO2eq, with behaviour across regions governed by similar principles (e.g. global targets, or all following NDC or NPi policies).
*'
*' * (diffExp2Lin) and (diffLin2Lin): standard carbonprice realizations for ambitious climate policy scenarios [REMIND default for peak budget runs: diffLin2Lin in combination with iterative_target_adj = 9],
*' * (diffExp2Lin) and (diffLin2Lin): standard carbonprice realizations for ambitious climate policy scenarios [REMIND default for peak budget runs: diffLin2Lin in combination with iterative_target_adj = 9],
*' * three main design choices:
*' * [diff]: level of regional carbonprice differentiation in 2030 determined by cm_co2_tax_spread (default = 10); quadratic phase-in to reach globally uniform carbonprices in cm_CO2priceRegConvEndYr
*' * [Exp or Lin]: functional form of carbonprice path for developed regions:
*' * [Exp]: exponential increase with rate given by cm_co2_tax_growth, (initial) value in cm_startyear is given by cm_co2_tax_startyear
*' * [Lin]: linear increase starting at historical level given by cm_co2_tax_hist in year cm_year_co2_tax_hist, (initial) value in cm_startyear set by cm_co2_tax_startyear
*' * [2Lin]: post-peak behaviour depending on cm_iterative_target_adj
*' * [9]: after the (endogenously adjusted) peak year, carbonprice path increases linearly with fixed annual increase given by cm_taxCO2inc_after_peakBudgYr (default = 0, i.e. constant)
*' * [9]: after the (endogenously adjusted) peak year, carbonprice path increases linearly with fixed annual increase given by cm_taxCO2inc_after_peakBudgYr (default = 0, i.e. constant)
*' * [5]: no adaptation of carbonprice path after peak year
*' * [0]: after the (exogenously fixed) peak year, carbonprice path increases linearly with fixed annual increase given by cm_taxCO2inc_after_peakBudgYr (default = 0, i.e. constant);
*' * choose cm_peakBudgYr = 2110 for no adaptation of carbonprice path until end of century
Expand All @@ -389,7 +389,7 @@ $setglobal emicapregi none !! def = none
*' * (NPi): National Policies Implemented, extrapolation of historical (until 2020) carbon prices
*' * (none): no tax policy (combined with all emiscens except emiscen = 9)

*** (exponential) is superseded by (diffExp2Lin): For a globally uniform, exponentially increasing carbonprice path until end of century [in combination with cm_iterative_target_adj = 0 or 5], set cm_co2_tax_spread = 1, set cm_peakBudgYr = 2110, and choose the initial carbonprice in cm_startyear via cm_co2_tax_startyear.
*** (exponential) is superseded by (diffExp2Lin): For a globally uniform, exponentially increasing carbonprice path until end of century [in combination with cm_iterative_target_adj = 0 or 5], set cm_co2_tax_spread = 1, set cm_peakBudgYr = 2110, and choose the initial carbonprice in cm_startyear via cm_co2_tax_startyear.
*** (linear) is superseded by (diffLin2Lin): For a globally uniform, linearly increasing carbonprice path until end of century [in combination with cm_iterative_target_adj = 0 or 5], set cm_co2_tax_spread = 1, set cm_peakBudgYr = 2110, and choose the initial carbonprice in cm_startyear via cm_co2_tax_startyear. [Adjust historical reference point (cm_year_co2_tax_hist, cm_co2_tax_hist) if needed.]

$setglobal carbonprice none !! def = none
Expand Down Expand Up @@ -911,7 +911,7 @@ parameter
;
cm_33_EW_upScalingRateLimit = 0.2; !! def = 20% !! regexp = is.nonnegative

parameter
parameter
cm_33_EW_shortTermLimit "Limit on 2030 potential for enhanced weathering, defined as % of land on which EW is applied. Default 0.5% of land"
;
cm_33_EW_shortTermLimit = 0.005; !! def = 0.5% !! regexp = is.nonnegative
Expand Down Expand Up @@ -1504,9 +1504,12 @@ $setGlobal cm_import_EU off !! def off
*** (off) no ARIADNE-specific H2 imports for Germany
$setGlobal cm_import_ariadne off !! def off
*** cm_PriceDurSlope_elh2, slope of price duration curve for electrolysis (increase means more flexibility subsidy for electrolysis H2)
*** It parameterizes how much the electricity price for electrolysis is reduced relative to the annual average electricity price
*** This switch only has an effect if the flexibility tax is on by cm_flex_tax set to 1
*** Default value is based on data from German Langfristszenarien (see ./modules/32_power/IntC/datainput.gms).
$setGlobal cm_PriceDurSlope_elh2 GLO 15 !! def = GLO 15
*** Default value is based on data from German Langfristszenarien derived by the power system model Enertile.
*** It is derived by fitting a linear function to capture the relation between electrolysis electricity price and electrolysis share in total electricity demand
*** See https://github.com/remindmodel/development_issues/issues/404 for details.
$setGlobal cm_PriceDurSlope_elh2 GLO 20 !! def = GLO 20
*** cm_trade_SE_exog
*** set exogenous SE trade scenarios (requires se_trade realization of modul 24 to be active)
*** e.g. "2030.2050.MEA.DEU.seh2 0.5", means import of SE hydrogen from MEA to Germany from 2050 onwards of 0.5 EJ/yr,
Expand All @@ -1518,14 +1521,19 @@ $setGlobal cm_PriceDurSlope_elh2 GLO 15 !! def = GLO 15
$setGlobal cm_trade_SE_exog off !! def off
*** This allows to manually adjust the ramp-up curve of the SE tax on electricity. It is mainly used for taxing electricity going into electrolysis for green hydrogen production.
*** The ramp-up curve is a logistic function that determines how fast taxes increase with increasing share of technology in total power demand.
*** This essentially makes an assumption about to what extend the power demand of electrolysis will be taxed and how much tax exemptions there will be at low shares of green hydrogen production.
*** This essentially makes an assumption about to what extend the power demand of electrolysis will be taxed and how much tax exemptions there will be at low shares of green hydrogen production
*** The parameter a defines how fast the tax increases with increasing share, with 4/a being the percentage point range over which the tax value increases from 12% to 88%
*** The parameter b defines at which share the tax is halfway between the value at 0 share and the maximum value (defined by a region's electricity tax and the electricity grid cost) that it converges to for high shares.
*** The parameter b defines at which share the tax is halfway between the value at 0 share and
*** the maximum value (defined by a region's electricity tax and the electricity grid cost) that it converges to for high shares.
*** Example use:
*** cm_SEtaxRampUpParam = "GLO.elh2.a 0.2, GLO.elh2.b 20" sets the logistic function parameter values a=0.2 and b=20 for electrolysis (elh2) to all model regions (GLO).
*** cm_SEtaxRampUpParam = "off" disables v21_tau_SE_tax
*** Default:
*** cm_SEtaxRampUpParam = "GLO.elh2.a 0.2, GLO.elh2.b 20, EUR_regi.elh2.a 0.15, EUR_regi.elh2.b 40"
*** This means that electrolysis tax is at half of electricity taxation at 40% electrolysis share in power demand for European regions, and half at 20% share for the rest of the world.
*** We anticipate this lower taxation share in Europe, because Europe has particularly high electricity taxes compared to the rest of the world.
*** For details, please see ./modules/21_tax/on/equations.gms.
$setGlobal cm_SEtaxRampUpParam GLO.elh2.a 0.2, GLO.elh2.b 20 !! def = GLO.elh2.a 0.2, GLO.elh2.b 20
$setGlobal cm_SEtaxRampUpParam GLO.elh2.a 0.2, GLO.elh2.b 20, EUR_regi.elh2.a 0.15, EUR_regi.elh2.b 40 !! def = GLO.elh2.a 0.2, GLO.elh2.b 20, EUR_regi.elh2.a 0.15, EUR_regi.elh2.b 40
*** cm_EnSecScen "switch for running an ARIADNE energy security scenario, introducing a tax on PE fossil energy in Germany"
*** switch on energy security scenario for Germany (used in ARIADNE project), sets tax on fossil PE
*** switch to activate energy security scenario assumptions for Germany including additional tax on gas/oil
Expand Down
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