Low emissions development pathways of the Macedonian energy sector

In this paper MARKAL integrated energy system model is applied to explore the impacts and opportunities for low emissions energy system development in Macedonia, identifying CO2 emission reduction policies and the cost of taking action. Two scenarios with different reduction target have been examined: higher ambition scenario where emissions are restricted to 10% above 1990 levels in 2021 and 2.5% in 2030, and moderate ambition scenario where emissions are restricted to 25% above 1990 levels in 2021 and 15% in 2030. In order to provide insights into the optimal timing of emission reductions, both of these cases have also been run under cumulative constraints, that is, rather than having the specified annual targets, there is a carbon “budget” set for 2015-2030 (44 Mt and 26 Mt for higher and moderate ambition cases, respectively), reflecting the same ambition as the above cases but providing flexibility to reduce emissions in the most cost-optimal way. The results show that most of the CO2 reductions are in the power generation sector, which is not surprising as this tends to be the most carbon intensive sector. The higher ambition case is considerably more expensive than the reference case, with costs 1.9% higher, while the increase under the moderate ambition case is 1%. Under a cumulative constraint, the additional costs are reduced to 1.5% and 0.6% respectively, highlighting the importance of the timing of action.