Climate Task Force Carbon Neutrality 2050 and Mitigation
Task Force "Carbon neutrality 2050 and mitigation in the energy sector"
On March 29th 2023, at the Berlin Energy Transition Dialogue, the Chilean Minister of Energy, Dr. Diego Pardow Lorenzo, and the German Minister of Economics and Climate Action, Dr. Robert Habeck, signed a joint declaration to deepen their cooperation in a context of increasing global climate crisis.
Both sides share a growing interest in strengthening cooperation in this field and creating a specific platform focused on achieving their ambitious national climate targets. Germany should achieve carbon neutrality by 2045. While Chile must be carbon neutral by 2050 at the latest, according to the Framework Law on Climate Change enacted in 2022. This law puts Chile in the position to be one of the first countries that directly links climate action with the energy sector.
First meeting
The first task force meeting took place on may 9th, 2023, in Santiago. Both sides pointed out that decarbonization would not be possible withouth a solid energy transmission and storage system. At the current moment both countries are in a similar second stage of their energy transition and decarbonization process, which also offer the opportunity to jointly review the efficiency of their mitigation instruments. Both parts were talking about their updated energy transition laws aswell as their action plans for adaptation and mitigation.
The Chilean side was represented by Juan Pedro Searle, head of the Climate Change Unit of the Ministry of Energy, and his department, as well as Loreta Lancelotti from the International Relations Office. While the German side was represented by Dr. Georg Maue, head of Energy Partnerships with Latin America of the BMWK (Federal Ministry for Economic Affairs and Climate Action), together with the Energy Partnership team, Silja Dressel, senior policy advisor of the ‘Global EP Team’ Germany and George Cristodorescu, Coordinator of the Energy Cluster of GIZ Chile.
Task force will organise a new meeting for 2023 to define their joint work on the four strategic axes: modelling and strategic planification for carbon neutrality, mitigation and enabling instruments, energy sector resilience to climate change and exchange of knowledge and experiences in policy development.
“Climate Neutrality 2050 and mitigation in the energy sector” Second Meeting
2nd Meeting Carbon Pricing and Mitigation Planning
The second Task Force meeting was held on 5 september 2023 in Santiago and online (hybrid format) where mainly topics like carbon pricing and the European Emission Trading System (EU-ETS) as well as the planning of mitigation actions. From the German side an input about climate regulations in Germany and the EU was given about the Climate Change Act (Klimaschutzgesetz) as a framework of mechanics of political actions for monitoring and actions to reach the ambitous climate targets of achieving carbon neutrality by 2045, which includes a pathway of a more or less linear CO2 reduction over the next years. That´s why sector specific goals are needed for areas like the energy sector as well as transport and housing sector. While previously each year each sector was evaluated and eventually called for immediate actions, the emphasis now is to look at the upcoming years and the estimated projections of emissions in a more general and broad way, which includes a monitoring system based on the evaluation of the past years emissions as well as the set targets for the upcoming years until 2030. Some of the German sectors such the fuel combustion in the energy sector is already almost completly covered by the European Emission Trading System, while CO2 reduction of about 50% is also reached in combination with a German national emission trading system. The revenues go to a national climate and transformation fund that support for exable energy efficient building refurbishment, decarbonization of the industry o expansion of renewables.
With its Climate Change Act from the Ministry of Environment (Contribución Determinada a Nivel Nacional (NDC)) which was enacted in 2022, Chile has set its goal to achieve carbon neutrality until 2050 the latest. The Chilean law includes several measures and management instruments with sectoral goals and mitigation measures as well as a carbon budget system. In Chile almost 80% of the emissions are originated in energy which includes the power sector, transport and industry. 11 sector plans are already elaborated to adapt and reduce emissions in addition to 16 regional plans. Furthermore they are connected to other laws such as the General Electric service law and are aligned with their long-term plannings, which are updated every five years. The first Chilean carbon neutrality pathway is based on 4 main pillars: energy efficiency, renewable energy, electromobility and green hydrogen.
Part of the chilean policy arount climate mitigation is a Green/Carbon tax which taxs air emissions such as NOx, SO2 and CO2. In addition, Chile discusses a Emission Trading System together with the Parntership for marked implementation (PMI), where Germany is also a donor. That´s why technical assistance might be interested to see where an ETS can go.
But on both sides there are further topics to discuss since carbon pricing is not addressing for example investment desitions and a carbon tax only might not be enough inventive to reduce emissions. That´s why it might be more effective to establish a combination of several measures. This meeting, as it showed the comon points to be discussed, can be decidered as a starting point of the discourse arount the measures for Carbon Neutrality.
“Climate Neutrality 2050 and mitigation in the energy sector” Third Meeting
The third meeting of the Task Force was held on 18th October 2023 to discuss mainly questions around critical infrastructure and energy security focussing on actions needed to ensure system resilience of critically important energy infrastructure in the face of more extreme climate conditions such as extrem weather events like storms and floods that threaten critical infrastructure such as energy and water supply but also transport and information and comunication technology. Regarding the energy transition it needs to be highlighted that a very high share of renewable energy needs a robust energy system, including resilient transmission systems and storage. On the other hand, introducing more renewable energy into the grid may be part of the way to render the energy system more resilient to climate change which means that the process of adaptation is as important as the process for mitigation.
Isabella Villanueva, (MEN) introduces some regulatory aspects of decarbonization in Chile: The main threats to the energy sector because of climate change are more intense floods and wildfires. Regarding the energy transition Chile has potential for energy sources spread all over the country, but the demand for energy and electricity is concenctrated in the middle of the country which challenges the design for the transmissional and interconnection line systems as well as energy storage in the centre regions of Chile. This requires also the coordination in between the regions regarding infrastructure and risk managment. Through sectorial adapation strategies and risk management the approach of the chilean energy sector is to set adaptation and resilience as enablers on the way to carbon neutrality. Several related studies have been elaborated (Have a look below) to gain deeper understanding and enhance adequate management.
From part of the European Commission, represented by Ricardo Tavares de Costa, offerend insights about the European strategy on ensuring energy security and adaptation actions. Mostly higher average temperatures and more precipitations, droughts, wildfires and storms are challenging the operational conditions of European critical energy infrastructure, such as energy transmission and distribution, fuel storage tanks and exposed pipelines. It´s necessary to increase resilience of the energy system through adaptation actions to reduce risks, but also to reduce emissions on the way to descarbonizing the energy sector. While the decarbonization process is to be based on the 5 pillars of rethinking processes, energy efficiency, implementing clean technologies, offset and control emissions, the conclusion of the European report about climate impacts on the energy systems is the need of developing energy and climate strategies which on one hand ensures the operation of energy systems but at the same time enhancing disaste preparedness, inclusing the development of early warning systems.
On an European level there has to be mentioned some of the legal frameworks such as the European Green Deal, the European Climate Law between other strategies that are for example focussing on the promotion of solar energy, storage systems and more.
Regarding the German perspective, Nico Heinemann (Division System Safety, BMWK) pointed out the need for a rapid expansion of renewable energy sources like PV and wind energy, focussing furthermore on the need for an extension of the power grid. The German approach included a broad participation process to get an idea of the different needs and focusses to be addressed.
The German national adaptation strategy entered in operation in 2008 and is updated every 4 -5 years. It includes a regular monitoring report and an Climate impact and risks analysis which are published every 4 to 6 years, however the adaptation strategy is not yet binding while European regulations have a more binding character. Also in Germany measurable targets are being developed currently. But till now the tendency of installing adaptation measures in Germany are often reactive ones since the the power supply system continues to be very reliant, however, the need for preventive measures is getting more and more obvious. Some of the mitigation targets are linked to the diversification of electricity generation.
Regarding the climate risk assessment which is reevaluated every six years is currently focussing on diverse necessities and recently identified 31 direct impacts of climate change that require urgend actions.The most important ones between them are climate risks from heat for health in urban areas, droughts and low water as well as heavy rain falls end flash floods.
In conclusion both countries have more topics in common even though each country is acting in a different context.
Study on new quantitative indicators to measure climate crisis impacts on Chile's national energy system
Climate change introduces significant challenges on the Chilean energy sector, increasing the vulnerability of the system due to phenomena such as intense heat waves, prolonged droughts and more frequent extreme weather events. These challenges affect the production and availability of resources, distribution and security of energy supply, highlighting the need to strengthening the resilience of the sector.
This is why, in the framework of the Chile-Germany Energy Partnership and in cooperation with the Ministry of Energy, this report was prepared, which on the one hand analyses and establishes quantitative indicators to assess the impacts of the climate crisis on the Chilean national energy system and on the other hand analyses new sub-sectors of the energy sector such as non-conventional renewable energies, energy storage and the green hydrogen industry, which improve the accuracy of the data and enables further assessments.
These indicators present a tool to determine the resilience of the energy system to external impacts that may be exacerbated by climate change. Contributing to Chile's long-term sustainability and energy security, these indicators also help to analyse critical areas as well as to take informed decisions for planning and implementing adaptation and mitigation actions.
The development this new set of indicators that measure the energy system's capacity for adaptation and resilience to climate impacts are classified into energy supply indicators, which include both, energy resources and energy generation, transport indicators (electricity and hydrocarbon infrastructure), and demand indicators (residential, commercial and industrial demand sectors).
The study contains a cost-benefit analysis of palliative measures to assess their effectiveness in mitigating climate impacts on energy infrastructure as well as recommendations for informed decision making. In conclusion, the study provides a framework to a deeper understanding of the challenges posed by climate change on the Chilean energy sector, as well as to address them, which contribute to long-term sustainability and energy security.
Estudio que perfecciona el sistema de índices cuantitativos de impactos de la crisis climática en el sistema energético nacional chileno
Authors:
SCL Econometrics LTDA
Marcelo Villena, Juan Carlos Villena, Samuel Varas