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New Energy Externalities Developments for Sustainability (NEEDS)

Funding Organisation: European Commission, DG Research

Cooperation: There are more than 60 partners from all over Europe involved in NEEDS.

      Key partners (research stream leaders) are

• Istituto di Studi per l’Integrazione dei Sistemi (ISIS) (Co-ordinator);
• Institute of Technical Thermodynamics, German Aerospace Center (DLR);
• University of Stuttgart (IER);
• Fraunhofer FHG/ISI;
• Istituto di Metodologie per l’Analisi Ambientale (IMAA-CNR);
• Observatoire Méditerranéen de l’Energie (OME);
• Paul Scherrer Institut (PSI);

Project duration: September 2004 to August 2008 (completed 2009)

Contact: Dr. Wolfram Krewitt

Overall objectives of NEEDS

The ultimate objective of the NEEDS Integrated Project is to evaluate the full costs and benefits (i.e. direct + external) of energy policies and of future energy systems, both at the level of individual countries and for the enlarged EU as a whole.

From the scientific and technological viewpoint, this entails major advancements in the current state of knowledge in the three main areas of:

• Life Cycle Assessment (LCA) of energy technologies
• monetary valuation of externalities associated to energy production, transport, conversion and use
• integration of LCA and externalities information into policy formulation and scenario building.

Based on current state-of-the-art, achieving such advancements requires a sizeable innovation effort in a number of research fields, including:

• the analysis of new energy technologies options (e.g. fuel cells and other hydrogen-based technologies, advanced fossil fuels, advanced nuclear, etc.), and, in general, of renewable energy technologies for which the current LCA knowledge is insufficient (e.g. offshore wind, photovoltaics, bioelectricity, etc.)
• the development of new and improved tools for the monetary valuation of externalities of energy, targeting major innovation at several stages of the Impact Pathway Approach (IPA), in terms of: (i) methods (e.g. valuation of mortality and morbidity, estimation of uncertainties, accounting for the precautionary principle, dynamic valuation of externalities, etc.), of (ii) impacts so far insufficiently addressed (e.g. loss of biodiversity, water and soil pathways, indoor combustion sources, oil spills, etc.), and of (iii) the availability and reliability of quantitative evidence (improved Exposure/Response functions, extension of the geographical coverage of available externality data, etc.)
• the development of a consistent and robust analytical platform allowing to integrate the full range of information and data on LCA and external costs into a Pan-European modelling framework, and to build scenarios of future energy equilibria that must also reflect the foreseeable evolution of energy supply and technology uptake.

The Integrated Project is built as a series of “streams”, each addressing a specific area of research. Innovation and S&T advancement lie both within each stream and in their overall integration:

Research Stream Integration:

Ultimately, NEEDS will allow to calculate full (direct + external) cost / benefit equilibrium solutions of future energy systems, for the EU as a whole as well as for each individual MS/NAS, where the trade-offs among “cradle to grave” energy security, global and local environment protection, full economic costs are balanced. This stream has therefore been primarily designed to target the integration of analytical methods for full cost assessment. This will be achieved by integrating three well established quantitative methodologies into a new single framework to be widely diffused among researchers and policy analysts:

• ExternE, which calculates the external costs associated to the supply of electricity and heat based on the most relevant – both current and future - technological options;
• Life Cycle Analysis (LCA), which calculates “cradle to grave” energy, environment, material and economic resources used by the most relevant power supply options;
• The Integrated MARKAL- EFOM System (TIMES), which generates technology rich partial equilibrium solutions for the long term development of energy - environment systems.

Research Stream 1a: Life cycle approaches to assess emerging energy technologies

Research Stream will provide data on costs and life cycle inventories (material and energy flows from the entire life cycle, and resulting environmental interventions like emissions, land use, etc.) for emerging energy technologies, with a strong focus on long term technical developments (time horizon 2050). A new methodological framework for Life Cycle Assessment (LCA) of future technologies is developed by combining prospective methods that are used to reflect technological change (like Technology Foresight and Experience Curves) with the traditional LCA approach. The direct link to scenario modelling will allow a direct feedback between changes in the overall energy system and the life cycle inventories of specific technologies (dynamic LCA).

Research Stream 1b: Development and improvement of a methodology to estimate external costs of energy

Objective is to further develop, improve and extend the methodology for calculating energy externalities, and in particular:

• To analyse new impact pathways (e.g. soil, water, etc.)
• To analyse new impacts (e.g. loss of biodiversity, hemispheric impacts, impacts from indoor sources, etc.)
• To improve current methods, tools and datasets (e.g. Exposure/Response functions, exposure patterns, valuation of mortality and morbidity, transport of atmospheric pollutants, etc.)
• To reduce current uncertainties and close existing knowledge gaps

Research Stream 1c: New externalities associated to the extraction and transport of energy

The objective of this stream is to assess the externalities associated with the initial stages of fuel cycles that provide energy for final use. This includes extraction of oil and gas, as well as transport of oil (including oil spills), gas, electricity and other energy vectors such as hydrogen.

Research Stream 1d: Extension of the geographical coverage

This research stream mainly aims at bringing additional countries up to par with those (mainly EU) for which the current state of knowledge on energy externalities is more advanced, primarily as the result of the ExternE work.

The Countries targeted here a group of NAC (Newly Associated Countries, and other Central and Eastern European Countries) and of MPC (Mediterranean Partner Countries)

The main aim is to present scientifically sound and reasonable economic instruments for environmental protection and sustainable development, with significant focus on the environmental fiscal/tax reform in particular that will lead to more efficient and sustainable economies.

Research Stream 2a: Energy systems modelling and internalisation strategies, including scenarios building

This stream aims at generating via The Integrated MARKAL- EFOM System (TIMES)[1] partial equilibrium technology rich economic models of each MS/NAC and of the EU as a whole including, in their long term development, the most important emissions, materials, and damage functions used by LCA and ExternE.

Using the key base data received from the other streams, for each energy security, environment protection and economic development target, this stream calculates equilibrium quantities and prices and provides them to the other streams iteratively, till compatible values are reached.

Research Stream 2b: Energy technology roadmap and stakeholders perspective

The general objectives of this Research Stream (RS) are: (1) To identify, discuss and analyse the terms and conditions (including barriers and enablers) for an effective formulation and implementation of long term strategies based on the internalisation of external costs; (2) To broaden the basis for decision support beyond the assessment of external costs by examining the robustness of results under various stakeholder perspectives. From the technical point of view the stream should also contribute to the integration of results generated by other analytical tasks within the project.

The specific objectives are:

• To address and evaluate sustainability of the candidate technologies and/or technology mixes taking into account their performance under economic, environmental and social criteria.
• To investigate the sensitivity of results of sustainability assessment to specific patterns in stakeholder preferences.
• To explore to what extent the stakeholders accept the assessed external costs as the basis for internalisation.
• To examine possible differences in the ranking of options established by employing alternative approaches to the evaluation.
• To identify most robust technological options and prioritised developments for the promising but less robust ones.

Research Stream 3a: Transferability and generalisation

The overall objective of this Research Stream is to develop a simple way of calculating, transferring and present the uncertainty of default values for average/aggregate external costs, that can be used for energy modelling, assessing different technologies and energy systems, LCA (especially for renewable energy characterised by direct aesthetic and ecosystem/biodiversity impacts), cost-benefit analyses, green accounting and other policy advice. Full energy chains need to be considered in line with the scope of external cost assessment.

[1] This tool is being developed by the Energy Technology Systems Analysis Programme, which is an Implementing Agreement of the International Energy Agency in Paris, to which the majority of EU member states participates.