Today, issues such as climate change and increased competition for scarce resources puts pressure on society and firms to transform. Change is not easily managed though, especially not when relating to production or consumption of energy carriers such as district heating or electric power. These systems do not only have strong dynamics internally, but dynamics between multiple technological systems must sometimes be considered to effectively manage response and strategies in relation to change. During the early 1980s, an optimisation model founded on an expert-based approach was developed based on the partial equilibrium model to enable the evaluation of different actions to reach a target. This model — often referred to as marginal abatement cost curve (MACC) or conservation supply curve (CSC) — is used by academia, industry and policymakers globally. The model is applied for causes such as energy conservation and waste management, but also within the climate change context for optimising CO2 reductions and governmental policy. In this context, the model is used by actors such as the Intergovernmental Panel on Climate Change (IPCC), International Energy Agency (IEA) and World Bank, and by the consultancy firm McKinsey &amp; Company, who use it extensively in different analysis. This model has many drawbacks in relation to managing interdependencies between different options, but more specifically the metric used for ranking options with a negative marginal cost has a design flaw leading to biased results. As a solution Pareto optimisation has been suggested, but is problematic given the dynamics within and between energy systems. The purpose of this compilation dissertation is to improve the ability for industry and policymakers to effectively manage change and reach set targets. In particular it develops our knowledge of how to account for option interdependency within and between technological systems. Furthermore, the ranking problem relating to expert-based least cost integrated planning is addressed. This dissertation also provides policy and managerial implications relating to the issues of energy conservation, CO2 abatement, and SOx and NOx reduction in relation to the district heating system in Stockholm. Implications are also provided for the interaction with other systems such as the Nordic electric power system. / Klimatfrågan och konkurrens om knappa resurser medför ett förändringstryck på nationer och företag. Att hantera förändringar har aldrig varit enkelt, vilket är tydligt bland företag inom energisektorn såsom el och fjärrvärmeproducenter. Energisystemen dessa företag är del av har stark intern dynamik, men även dynamik mellan olika energisystem är vanligt. Detta måste tas i beaktande när strategier och planer för att hantera förändring utformas. Under början av 1980-talet skapades en optimeringsmodell baserad på den nationalekonomiska jämviktsmodellen för att kunna utvärdera olika specifika möjligheter att nå ett mål, t.ex. energibesparingar. Denna modell, som idag ofta benämns MACC (Marginal Abatement Cost Curves) eller CSC (Concervation Supply Curves), används idag av akademin, industrin och myndigheter inom områden så som energibesparingar, minskade CO2-utsläpp, sophantering och design av ekonomiska policyinstrument. De icke-akademiska användarna inkluderar FNs klimatorgan IPCC, IEA och Världsbanken. Även konsultfirman McKinsey&amp;Company använder modellen regelbundet i olika studier. Tyvärr har modellen många begräsningar när det kommer till att hantera dynamiker mellan de specifika åtgärder som identifierats för att nå ett mål. Den allvarligast begränsningen utgörs dock av ett optimeringsfel som leder till felaktiga slutsatser om prioriteringen mellan de åtgärder som har en negativ marginalkostnad. Som en lösning på detta problem har pareto-optimering föreslagits, vilket denna avhandling dock visar är problematiskt på grund av de dynamiker som finns inom och mellan energisystem. Det övergripande syftet med denna avhandling är att förbättra möjligheten att hantera förändringar och nå uppsatta mål. Specifikt diskuteras hur beroenden mellan olika åtgärder för att nå det satta målet kan hanteras. Avhandlingen adresser även problemet att prioritera mellan åtgärder med negativ marginalkostnad. Utöver detta bidrar avhandlingen med praktiska implikationer för politiker, myndigheter och företag involverade i fjärrvärmeproduktion i Stockholm. Slutsatser dras kring energibesparingar och minskade utsläpp av CO2, SOx och NOx. Praktiska implikationer ges även för hur system som detta fjärrvärmesystem samverkar och interagerar med det nordiska elsystemet. / <p>QC 20150414</p> / Investments in energy efficiency and climate change abatement: revising marginal cost curves as an optimization model

The combination of Biomass Energy with Carbon Capture and Storage (BECCS) can reduce the level of CO2 in the atmosphere. It is, therefore, seen as an interesting tool in the CO2 abatement portfolio. In a Swedish context, BECCS could contribute to the goal of CO2 neutrality by 2045. This thesis aims to investigate the application of BECCS in the district heating system of Stockholm region with a case study at the energy utility Fortum Värme. The focus of the study is the technical and economic feasibility of such an application. The applicability of Fortum Värme´s plants to implement carbon capture is investigated together with costs and technical implications on each applicable plant and the district heating system as a whole. Three plants are deemed feasible for carbon capture with a cost of about 45€/tonne of captured CO2 (not including transport or storage). A model for transport of CO2 to promising storage sites in Sweden, Norway, and Denmark is constructed for transport by pipeline and ship. Ship transport is estimated to be the most cost-efficient option in all scenarios. The total cost for BECCS is calculated at 70-100€/tonne depending on size of emissions and distance to storage locations. Furthermore, the total cost is calculated to decrease by 10-25% if some current promising technologies for carbon capture reach maturity, a market for transport services of CO2 evolves, and a number of actors are sharing the costs for storage.Calculated costs are on a similar price level as other CO2 abatement strategies such as CCS in industries, biogas, and biodiesel in the vehicle fleet. If the cost is applied directly to the heat price, without any subsidies, it would increase the price of heat by 14-21%.The major challenge of BECCS in combined heat and power production, compared to other studies based on power production, is the seasonality of heat demand. The capacity of the carbon capture system will be oversized during the summer, or undersized during the winter. This is an optimization challenge which has to be further studied.