Reshaping energy policy for sustainable development: Curbing Iran’s carbon emission monster via renewable energies

ABSTRACT

This paper formulates flow of energy from primary resources and import routes to different socio-economic sectors by making use of Long-Range Energy Alternatives Planning (LEAP) model. It presents a baseline of how Iran’s future production and consumption patterns evolve. It also seeks plausible scenario for renewable energies utilization and evaluates its mitigation potential and economic aspects. Model results indicate that exploitation of a “not-too-strict” package of renewable sources featuring 10 GW of wind and 19 GW of hydro by the end of 2035 will lead to CO₂ emissions to be reduced up to an amount of 190.7 million tons in the study period. By accounting for the opportunity costs different fossil fuels can have, and with a 22% discount rate, abatement of 1 ton of CO₂ costs about 7.5 $ (in 2005 constant prices) that declines to zero with a discount rate equal to 7.7%. The paper is concluded by discussing policy options for overcoming barriers hindering the development of renewable resources in the context of country-specific characteristics.

KEYWORDS:

• Climate change mitigation
• energy policy
• emission factor
• LEAP model
• renewable energy

Notes

¹ Typical capacity credit values of wind fields are in the range of 5–40% (IPCC 2012) depending on the degree of correlation between wind power output and electrical peak demand. A value of 25% in 2010 that is assumed to decline to 15% in year 2035 (when system reliant on wind energy has been more intense), was assigned to capacity credit of wind energy in RES.

² It is argued in (Ranami et al. 2008) that with country’s current infrastructure and with no dramatic decline in gas demand of neighboring countries, natural gas opportunity cost changes in the range of 18.5–21 ¢/m³ during 2006–2031.