Depletion of fossil fuels (coal, oil and natural gas) and uranium is simulated on the assumption that resources can be represented by a long-term supply cost curve, consisting of different resource categories with increasing cost levels. The model assumes that the cheapest deposits will be exploited first. For each region, there are 12 resource categories for oil, gas and nuclear fuels, and 14 categories for coal. A key input for each of the fossil fuel and uranium supply submodules is fuel demand (fuel used in final energy and conversion processes). Additional input includes conversion losses in refining, liquefaction, conversion, and energy use in the energy system . These submodules indicate how demand can be met by supply in a region and other regions through interregional trade.
Table 3.1: Main assumptions on fossil fuel resources (Rogner, 1997; Mulders et al., 2006)
Fossil fuel resources are aggregated to five resource categories for each fuel (see table above). Each category has typical production costs. The resource estimates for oil and natural gas imply that for conventional resources supply is limited to only two to eight times the 1970--2005 production level. Production estimates for unconventional resources are much larger, albeit very speculative. Recently, some of the occurrences of these unconventional resources have become competitive such as shale gas and tar sands. For coal, even current reserves amount to almost ten times the production level of the last three decades. For all fuels, the model assumes that, if prices increase, or if there is further technology development, the energy could be produced in the higher cost resource categories. The values presented in the table above represent medium estimates in the model, which can also use higher or lower estimates in the scenarios. The final production costs in each region are determined by the combined effect of resource depletion and learning-by-doing.
The structure of the biomass submodule is similar to that for fossil fuel supply, but with the following differences (Hoogwijk, 2004):
The production costs for bioenergy are represented by the costs of feedstock and conversion. Feedstock costs increase with actual production as a result of depletion, while conversion costs decrease with cumulative production as a result of learning by doing. Feedstock costs include the costs of land, labour and capital, while conversion costs include capital, O&M and energy use in this process. For both steps, the associated greenhouse gas emissions (related to deforestation, N2O from fertilisers, energy) are estimated, and are subject to carbon tax, where relevant.
Potential supply of renewable energy (wind, solar and bioenergy) is estimated generically as follows (Hoogwijk, 2004; De Vries et al., 2007):
A brief overview is presented here, for more information see the IMAGE 3.0 web page.