Climate change mitigation and electrification

Climate change mitigation and electrification

Energy Policy 44 (2012) 464–468 Contents lists available at SciVerse ScienceDirect Energy Policy journal homepage: www.elsevier.com/locate/enpol Co...

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Energy Policy 44 (2012) 464–468

Contents lists available at SciVerse ScienceDirect

Energy Policy journal homepage: www.elsevier.com/locate/enpol

Communication

Climate change mitigation and electrification Masahiro Sugiyama n Central Research Institute of Electric Power Industry, Socio-Economic Research Center, 1-6-1 Ohtemachi, Chiyoda-ku, Tokyo 100-8126, Japan

a r t i c l e i n f o

a b s t r a c t

Article history: Received 27 September 2011 Accepted 13 January 2012 Available online 13 February 2012

An increasing number of mitigation scenarios with deep cuts in greenhouse gas emissions have focused on expanded use of demand-side electric technologies, including battery electric vehicles, plug-in hybrid vehicles, and heat pumps. Here we review such ‘‘electricity scenarios’’ to explore commonalities and differences. Newer scenarios are produced by various interests, ranging from environmental organizations to industry to an international organization, and represent a variety of carbon-free power generation technologies on the supply side. The reviewed studies reveal that the electrification rate, defined here as the ratio of electricity to final energy demand, rises in baseline scenarios, and that its increase is accelerated under climate policy. The prospect of electrification differs from sector to sector, and is the most robust for the buildings sector. The degree of transport electrification differs among studies because of different treatment and assumptions about technology. Industry does not show an appreciable change in the electrification rate. Relative to a baseline scenario, an increase in the electrification rate often implies an increase in electricity demand but does not guarantee it. & 2012 Elsevier Ltd. All rights reserved.

Keywords: Global warming Mitigation Electrification

1. Introduction Drastic reductions in greenhouse gas emissions are called for in order to reduce the possibility of dangerous climate change. A number of mitigation scenarios have been produced to examine the possible future pathways for deep cuts in emissions, which may be classified by the main demand-side energy carrier: hydrogen, bioenergy, and electricity. Though electricity can play a vital role in mitigating climate change, the literature on electricity scenarios has been sketchy. Electricity can be produced carbon-free by various means, including nuclear, renewables, and fossil fuel-fired power plants with carbon capture and storage (CCS). In addition, electric technologies can efficiently meet various forms of energy service demands. In fact, as early as in 1992, Manne and Richels (1992) noted importance of electrification: ‘‘y More electrification is also an alternative. For example, if electric vehicles were charged with power from carbon-free electric generating facilities, CO2 emissions could be reduced significantly’’ (p. 47). ‘‘y residential oil burners may be replaced by gas burners, but they may also be replaced by electric heat pumps. y From 2020 on, electrification provides an economical way to reduce the energy system’s reliance on carbon’’ (pp. 52–53). n

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Relatively few scenario studies, however, focused on electricity, in contrast with hydrogen (McDowall and Eames, 2006, for review) and bioenergy (Berndes et al., 2003; Chum et al., 2011, for review). It is true that a number of studies examined the supply side of electricity from various aspects, as electricity must be decarbonized to achieve a stringent climate target. But these scenario studies are relatively silent about the role of electricity at the demand side. Technological progress has brought to the market some of the demand-side electric technologies, such as heat pumps for space heating and hot water, and electric vehicles (battery electric vehicles, BEVs, and plug-in hybrid vehicles, PHEVs). Newer studies have reflected on this market trend, incorporating enduse electric technologies in their scenarios. This brief study aims at reviewing the recent literature with a focus on demand-side electric technologies, analyzing the commonalities and differences across scenarios. Needless to say, many analyses examined the emissions reduction potentials of electric technologies (e.g., EPRI, 2009; Nishio and Hoshino, 2010). Mitigation scenarios, nonetheless, deserve a special scrutiny as they provide comprehensive visions of the socio-economic system and often serve as the currency of policy discussions. Some caution on terminology is in order. By electrification, we mean expanding the use of electricity at the point of energy service demand. This is different from usage in fields like development economics, in which (rural) electrification signifies providing electricity to a village or town without prior access to the electrical grid.

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2. Overview of reviewed studies Table 1 lists the studies reviewed in this paper. The listing was compiled on an ad-hoc basis by gathering recent publications. We tried searching for papers in a formal way, using a bibliographic database like Scopus but could not obtain meaningful results from plausible entries (e.g., electrification and ‘‘global warming’’). Although the list is not exhaustive, we see an increase in the number of such scenarios. Studies vary in scope (global vs. regional) and methods (bottom-up calculations vs. optimization models). Scenarios also exhibit a wide range of carbon-free electricity supplies. For example, Teske et al. (2011) and WWF International et al. (2011) heavily emphasize energy efficiency and renewables, while MacKay (2009) presents many alternatives for energy mix, from a nuclear-centric mix to all renewables. Some temporal trends are evident. First, the methodology, particularly the representation of end-use technologies in a model, has improved considerably. Manne and Richels’s (1992) pioneering model does not have a module for end-use technologies. In contrast, recent studies such as IEA (2010) Energy Technology Perspectives have detailed representation of heat pumps and electric vehicles. Second, new studies are represented by a variety of interests. Older studies came from researchers funded by, or affiliated with, electric utilities (Manne and Richels, 1992; Sugiyama, 2000; Edmonds et al., 2006). But newer analyses are produced by a multitude of interests, including not only an industry group (Eurelectric, 2010) but also an environmental organization (WWF International et al., 2011) and an international organization (IEA, 2008, 2010).

3. Electrification and mitigation There are several possible metrics to elucidate the role of electricity and end-use electric technologies. Although it is feasible to analyze contributions of each technology to emissions

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reductions (e.g., IEA, 2010), a simple metric that allows for a broad comparison is desirable. Edmonds et al. (2006) examined two such metrics: (1) the ratio of energy used for electricity generation to primary energy and (2) the ratio of electricity to final energy demand (as tabulated in the energy balance). Here we focus on the latter, as it is concerned with the demand side, and hereafter refer to it as electrification rate. Unfortunately, even though the electrification rate is straightforward to calculate, studies do not necessarily report the electricity consumption and final energy demand. We have excluded from our review some of recent scenarios which do not provide these two factors, which made the list in Table 1 rather short. Fig. 1 compares the electrification rates for the global economy in 2050 in the reviewed studies. The abscissa indicates the stabilization target of the CO2 concentration (not greenhouse gas concentration) for each scenario and is based on the categories used by IPCC (2007) (see their Table SPM 5). We have combined some of their categories to simplify the classification. The reduction targets are simply taken from each paper without standardization across studies. The figure also shows the historical electrification rates from the IEA energy balance. Studies that do not have non-intervention scenarios are represented by symbols without lines. The thin lines surrounding the Edmonds et al. (2006) results indicate the range due to assumptions on supply-side technologies and timing of mitigation. We do not plot the results from Manne and Richels (1992) since they reported the fraction of the primary energy used for electricity generation, a metric different from our main focus. Also, IEA (2008, 2010) and Sugiyama and Imanaka (2011) show the results of their sensitivity analyses but these are excluded from this figure. This graph demonstrates that the electrification rates in models increase by 2050 in baseline cases, and that the increases are amplified under climate policy. Moreover, there is a general tendency for the electrification rate to increase with stringency of mitigation targets.

Table 1 List of studies reviewed in this paper. Study

Analytical methods, with an emphasis on the demand side

Global Manne and Richels (1992) Top-down, global, energy-economic model. Demand-side modeling is fairly abstract and only considers electricity and non-electric energy. Analyzes the case of the United States in detail. Sugiyama (2000) Bottom-up technology model of the global energy systems. Substitution among energy carriers, rather than end-use devices is considered. Edmonds et al. (2006) Energy-economic model for the supply side. Details on modeling of the demand side are not described. IEA (2008, 2010) Based on the International Energy Agency (IEA) Energy Technologies Perspectives (ETP) model. For the buildings sector, IEA considers direct combustion technologies, heat pumps, and solar water heater, among others. For transport, it considers BEVs and PHEVs. Industrial electrification and heat pumps are briefly mentioned but its effects on scenarios are not quantified. Eurelectric (2010) The global scenario is based on the Prometheus world energy model, which distinguishes several passenger car technologies (including BEVs and PHEVs) but does not include heat pumps (Energy, Economics and Environment Modeling Laboratory, 2006). In addition to a global analysis, this study presents a detailed analysis on the EU (European Union) region. An energy-economic model, the PRIMES model, is used for the analysis of the EU and includes heat pumps and BEVs and PHEVs. Sugiyama and Imanaka Bottom-up technology model of the global energy systems. The buildings sector component includes direct combustion technologies, heat (2011) pumps, and co-generation. The transport module incorporates BEVs and PHEVs. The study also includes industrial heat pumps for lowtemperature heating. Teske et al. (2011) Demand-side devices are prescribed, with electric vehicles considered. An underlying study does not emphasize heat pumps for space heating and hot water (Graus and Blomen, 2008). Industrial electrification (e.g., process heat) is considered. The supply of energy is calculated using the PlanNet model, which does not involve optimization. WWF International et al. Demand-side device choices are prescribed. It considers electrification of both the buildings and transport sectors. (2011) Regional Sugiyama and Imanaka Japan’s energy scenarios based on simple bottom-up calculations. For the policy scenario, high degrees of electrification are assumed for (2007) the buildings and transport sectors. Heat pumps (including industrial ones), BEVs, and PHEVs are considered. MacKay (2009) The United Kingdom’s energy scenarios based on simple bottom-up calculations. High degrees of electrification are assumed for the buildings and transport sectors, with heat pumps and electric vehicles considered. Lists various supply-side options, ranging from a nuclear-centric option to a 100% renewable option. Suzuki et al. (2010) A bottom-up technology model of the energy system, MARKAL-JAPAN-MRI, has been used (MARKAL stands for MARKet ALlocation). It includes BEVs, PHEVs, and heat pumps. EC (2011) This study is primarily concerned with the EU policy, although it also considers the global aspect. An energy-economic model called PRIMES model is used for modeling the EU energy system, which includes heat pumps, BEVs, and PHEVs.

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Electrification rate (2050, global)

60% 50%

Sugiyama (2000) Edmonds et al. (2006)

40%

IEA (2008) IEA (2010)

30%

Eurelectric (2010) 20%

Sugiyama and Imanaka (2011)

2007 2000 1990 1980

10%

Teske et al. (2011) WWF International et al. (2011)

0% <485 ppm

485-570 ppm

570-660 ppm

>660 ppm Historical

Fig. 1. Global electrification rates from the historical data (IEA World Energy Balance) and the reviewed scenario studies. Colored lines and points depict global electrification rates in 2050 from each of the reviewed studies, which are indicated in the legend. The rightmost column shows the historical data for 1980, 1990, 2000, and 2007.

Electrification rate (2050, regional) 80%

UK in 2008 MacKay (2009)

60% Japan in 2007 Sugiyama and Imanaka (2007)

40%

Suzuki et al. (2011) EU27 in 2005

20%

Eurelectric (2010) EC (2011)

0% >80%

>60% >40% >20% Historical Emissions reduction target

Fig. 2. Regional electrification rates from the reviewed studies. Colored lines and points depict regional electrification rates in 2050 from each of the studies, as indicated in the legend. The rightmost column shows the historical values.

There is nonetheless a significant scatter, both in the reference and policy cases. For example, in the category ‘‘ o485 ppm’’, IEA (2010) suggests a rate slightly above 30% whereas Eurelectric (2010) implies an electrification rate of  55%. Alongside with electrification, we see substantial decarbonization of electricity generation in these studies. For example, WWF International et al. (2011) and Teske et al. (2011) feature a power mix of  100% renewables. IEA (2010) indicates substantial expansion of nuclear, renewables, and CCS, and Sugiyama and Imanaka (2011) find a growing role of nuclear. Regional studies also reveal the same general tendency. Fig. 2 shows electrification rates for three regions: the United Kingdom, Japan, and the European Union. For EC (2011), only the results from the reference scenario (without oil shock) and a scenario with global action and effective technologies are shown. The ‘‘gas shift’’ scenario in Sugiyama and Imanaka (2007) is excluded, which is discussed below. Each study has a different reference year: 2008 for MacKay (2009); 2005 for Suzuki et al. (2010); 2007 for Sugiyama and Imanaka (2007); and 2005 for EC (2011) and Eurelectric (2010). For EC (2011), reduction levels actually represent those of greenhouse gas emissions, not just CO2. The future electrification rate is projected to be higher than at the present, and the electrification rate tends to increase with the reduction level (Fig. 2). MacKay (2009) is rather exceptional, both in the reduction target (  100% reductions) and electrification

rate (over 70%), as he mainly investigated technical viability without much consideration of policy costs. As with global studies, the regional studies also exhibit significant decarbonization of electricity generation. Eurelectric (2010), for example, shows a  95% reduction in 2050 (relative to the the 1990 levels) in CO2 intensity of power generation with renewables, CCS, and nuclear, all making important contributions. Next we turn to electrification at the sector level. Fig. 3 examines electrification rates by sector for a subset of the global studies. The buildings sector has the highest rates of electrification. In the baseline scenarios, the steady increase of electricity usage due to appliances and information technologies has probably contributed to the larger electricity demand in this sector. This is accelerated under policy cases partly by substitution of heating devices with heat pumps, which are already mature in some markets. There is however some variation. WWF International et al. (2011) and Sugiyama and Imanaka (2011) exhibit very high rates of electrification for policy scenarios, whereas IEA (2010) and Teske et al. (2011) show only mild increases. This is partly because of the role of different technologies. For example, IEA (2010) shows an increased penetration of solar thermal for space and water heating. Teske et al. (2011) indicate an expanded role of district heating with renewable resources. Note that for Teske et al. (2011), the results for other sectors are shown as the values for the buildings sector are not available

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467

Electrification rate by sector (2050, global)

Sugiyama & Imanaka ('11) 485-570ppm

Transport

Sugiyama & Imanaka ('11) 570-660ppm Sugiyama & Imanaka ('11) >660ppm WWF International et al. (2011) <485ppm Buildings Teske et al. (2011) <485ppm IEA (2010) <485ppm IEA (2010) >660ppm World in 2007 (IEA energy balance)

Industry

0%

20%

40%

60%

80%

100%

Fig. 3. Electrification rates by sector.

Eurelectric (2010) IEA (2010) Sugiyama and Imanaka (2011) Teske et al. (2011)

Δln(E/D) -Δln(D) Δln(E)

WWF International et al. (2011) -0.6

-0.4

-0.2

0

0.2

0.4

0.6

0.8

1

1.2

1.4

1.6

Eurelectric (2010) IEA (2010) Δln(E/D) -Δln(D) Δln(E)

Sugiyama and Imanaka (2011) -0.6

-0.4

-0.2

0

0.2

0.4

0.6

0.8

1

1.2

1.4

1.6

Fig. 4. Differences of logarithms of electricity demand (D ln E), final energy demand (D ln D), and electrification rate (D lnðE=DÞÞ. (A) Differences between the 2050 policy scenarios and reference years. (B) Differences between the policy scenarios and baseline cases in 2050.

and other sectors are dominated by the buildings (  90% in 2007, for example). For transport, IEA (2010) and WWF International et al. (2011) report moderate electrification, but Sugiyama and Imanaka (2011) cases do not show such changes. Such differences can be attributed to technology assumptions or treatment of vehicle technologies. Sugiyama and Imanaka (2011) have performed a sensitivity analysis on the costs of electric vehicles, in which a much larger share of passenger cars is electrified. Also note that WWF International et al. (2011) essentially specified the electricity demand, rather than seeking a modeled optimal solution. Other studies also report electrification of the road transport. For example, in EC’s (2011) study, the 39% of the final demand for the road transport is electricity under the policy scenario. Eurelectric (2010) goes even further, noting that electricity accounts for about 90% of the passenger vehicle fuel mix in 2050 in their policy scenario.

Industry does not exhibit an appreciable change in the degree of electrification, probably because some industrial processes are not amenable to electrification. IEA (2010) reports two policy scenarios (‘‘high’’ and ‘‘low’’) for the industry, and the ‘‘low’’ scenario is reported here, although the difference in electrification rate is small. Non-energy use such as feedstock for chemical industry is treated differently in different studies. IEA (2010) and Sugiyama and Imanaka (2011) include non-energy use in their analysis while WWF International et al. (2011) do not. Teske et al. (2011) data allow us to calculate the value with/without non-energy use, and we present the results that include non-energy use. The data for the world in 2007 also include it (so do the ones in Fig. 1). Including non-energy use decreases the level of electrification by up to several percentage points (by altering the final energy demand), particularly in the industry sector. The electrification rate is composed of two factors, electricity demand and total final energy demand. What is the relative

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contribution of each factor? Fig. 4 decomposes the rates of electrification in the four studies into the two components as:

D lnðE=DÞ ¼ D ln ED ln D: Here, E is the electricity demand, D is the total final energy demand, and D refers to a difference. We examine differences between the reference years and 2050 policy cases, and those between the 2050 policy cases and 2050 baselines. The reference years are as follows: 2010 for Eurelectric (2010), Sugiyama and Imanaka (2011), WWF International et al. (2011); and 2007 for IEA (2010) and Teske et al. (2011). The increases in electrification rates in 2050 are accompanied by electricity demand increases in all cases (Fig. 4A). The final energy demand does not necessarily exhibit an increase. Teske et al. (2011) show a small increase and WWF International et al. (2011) imply a reduction, thanks to strict energy efficiency measures. On the other hand, Eurelectric (2010), IEA (2010), and Sugiyama and Imanaka (2011) all point to sizable increases in final energy demand. Comparing the baseline and policy scenarios in the three studies illustrates that climate policy leads to reduced final energy demand, but that its effect on electricity demand is ambiguous (Fig. 4B). In the IEA (2010) study, the electricity demand declines alongside with the final energy demand, but the net effect is an increase in the electrification rate.

4. Discussions and conclusions We have reviewed some recent mitigation studies that have focused on electric technologies. We have analyzed the rate of electrification, defined as the ratio of electricity to final energy demand. The more ambitious the mitigation target is, the larger the share of electricity in the final energy demand is. The future prospect of electrification differs significantly across sectors. The buildings sector holds the greatest promise. Heat pump technologies, which are already proven and mature, play some role in this. The reviewed studies do not agree on the future level of transport electrification, as studies differ in treatment of, and assumptions on, electric vehicles. Studies also show that the industry’s level of electrification does not change. While all of the reviewed studies demonstrate a tendency toward expanded electrification, this finding is certainly dependent on the choice of scenarios. Indeed, even our set of scenarios show that for small reductions in emissions, the electrification rate could decrease, rather than increase. For example, Manne and Richels (1992) note that in the short run, the electricity fraction of the primary energy slightly declines in the United States while it rises in the long run. In a similar vein, Sugiyama and Imanaka (2007) have created a policy scenario for Japan with expanded use of natural gas, in which the electrification rate somewhat decreases. In order to explore electrification in a more formal way, the next step is to analyze a larger set of scenarios. This paper has attempted to examine electrification across various scenario studies, but many issues remain unaddressed. Such issues include (1) the relationship between electrification and policy cost, (2) the interplay among major energy carriers (electricity, hydrogen, and bioenergy), and (3) the sensitivity of electrification to technology assumptions, both on the supply and demand sides. Given the potential role of electricity in mitigating climate change, investigating these issues more fully would contribute to a better understanding of climate policy at large. In this brief review, we have shown that electricity can play a vital role in mitigating climate change. Accelerating the historical trend of electrification along with decarbonizing sources of electricity is a promising policy option. There remain barriers to

electrification, particularly in the transport and industry sectors. For the transport, policy measures such as research and development are needed to reduce the cost of electric vehicles before substantial electrification occurs.

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