The European power sector can be fully decarbonized ahead of the Paris Agreement 2050 climate targets through strong electrification of key economic sectors, according to a new study by energy trade group Eurelectric.
The study was presented at a high-level event in Brussels today attended by EU Vice-President Maroš Šefčovič, International Energy Agency chief Fatih Birol and other power sector bosses.
The study states that a cost-effective pathway to the mid-century will depend on four key elements: electricity supply with over 80 per cent from renewables; diversification of power sources to ensure system reliability and flexibility; changing role of conventional generation, which will provide back-up energy while gradually being less used for energy production; and maturity of CO2 offset and power-to-gas technologies.
A previous report from Eurelectric said that at least 60 per cent of the EU’s economy should be electrified by 2050 to achieve 95 per cent GHG emissions reduction against 1990 levels. It added that annual average investments of between €89bn and €111bn will be required to decarbonize the power sector and other segments of the EU economy such as transport, building and industry. Investments will also be needed to strengthen electricity network interconnections across Europe and reinforce distribution grids.
Now this week’s study states that, despite this massive ramping up of investments, “the overall cost of electricity supply in a fully decarbonized system is lower than estimated due to the rapid cost-reduction trend of renewable technologies. By 2045, wholesale power prices are expected to reach 70-75 euros per MWh, which is significantly lower than other existing projections, such as the 105 euros per MWh estimated by the European Commission.”
Eurelectric president Francesco Starace, who is also chief executive of energy company Enel, said: “Renewable energy is increasingly cost-effective, easier to develop as well as to build and as such it is playing a key role in the energy transition. The transformation requires a change in the energy mix of the power sector, which is achievable through the implementation of predictable regulatory frameworks and clear long-term price signals to unlock the necessary private capital.”
“The concerted effort of the power sector together with society as a whole has already allowed for significant progress on our electrification pathways, bringing full decarbonization within reach. Let’s go forward decisively to seize all the opportunities it presents.”
The study states that an increasing share of renewables in the EU’s generation mix will require greater system flexibility, calling for the build-out of interconnectors, reinforcement and digitalization of distribution grids, as well as the scale-up of energy storage systems and demand-side response services. In addition, a fleet of conventional back-up plants will still be needed to provide reliability in a more variable power system.
“Accelerating the energy transition requires new forms of cross-societal cooperation, speeding up the electrification of other sectors and engaging them more actively in system balancing,” it notes. “In addition, engagement with authorities and customers is key to driving the demand and public acceptance of low-carbon solutions.”
The study shows that each European country has its own path and investment requirements to reach full decarbonisation due to their different existing electricity mixes and available resources. The commercial availability of key transition technologies and the allocation of dedicated EU funding will be required to ensure a just energy transition in those Member States facing a more difficult starting point.
“At this speed and scale, the transformation will require unprecedented cross-sector cooperation, public acceptance and consumer engagement.” said Kristian Ruby, Eurelectric Secretary General, who added: “We must also pay due consideration to the different starting points of the various Member States and ensure a just transition where no region in Europe is left behind.”