Energy-system modelling of the EU strategy towards climate-neutrality

doi:10.1016/j.enpol.2019.110960

Energy Policy

Volume 134, November 2019, 110960

https://doi.org/10.1016/j.enpol.2019.110960 Get rights and content

Highlights

•
Climate-neutrality in the EU is possible using known technologies.
•
“No-regret” options include energy efficiency, renewables and electrification.
•
Disruptive changes are inevitable to achieve carbon-neutrality.
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Climate-neutral hydrogen and synthetic fuels enable sectoral integration.
•
The restructuring entails a reasonably moderate increase in energy costs and prices.

Abstract

We extend and use the PRIMES energy model to explore pathways towards climate-neutrality in the EU by 2050 and 2070 and analyse implications on energy demand, supply and costs. We draw on the modelling, data and scenario framework developed by the authors to support the European Commission's “Clean Planet for All” communication, released in November 2018. Based on model results for numerous scenarios and sensitivity runs, we analyse key issues to explore feasibility, uncertainties, costs and priorities for climate-neutrality strategy. We suggest that a sustainable climate-neutral energy system in the EU is feasible using known technologies. We emphasise that the EU's climate and energy package for 2030 currently in legislation is not sufficient to ensure climate neutrality by 2050. We characterise as of “no-regret” options promoting energy efficiency, renewables and electrification where cost-effective. However, carbon neutrality also necessitates alternative options of “disruptive” nature. Technologies supporting the disruptive options are not yet mature in industry. High uncertainty surrounds their learning potential. Their deployment heavily depends on policies facilitating investment. The system analysis based on the model illustrates the importance of sectoral integration. We argue that hydrogen, and to a certain extent synthetic carbon-neutral hydrocarbons, are critical elements among the disruptive options.

Introduction

In the context of the COP21 meeting in Paris in December 2015, the European Union committed itself¹ to limit GHG emissions as low as required to stay below a 2 °C rise in average global temperature. The EU has recently adopted (proposed by the European Commission in November 2016) an ambitious policy package entitled “Clean Energy for all Europeans”.² The adopted climate and energy targets include GHG emission reductions (40% less than 1990 levels), energy efficiency (32.5% less primary and final energy than projected in 2007 before the economic crisis) and renewable energy (32% as a share of gross final energy consumption) in the year 2030. The policy measures include several sectoral Directives for energy efficiency, renewables and the electricity market, as well as a reform of the Emission Trading Scheme (ETS),³ enhanced by the recent adoption of the Market Stability Reserve (MSR),⁴ which has already led to a significant rise in the prices of CO₂ emission allowances.

The EU has repeatedly confirmed its commitment to GHG emissions reduction of at least 80% by 2050, below 1990 levels. The Paris Agreement, on the other hand, mentions explicitly that best efforts should be made to limit the global temperature rise to 1.5 °C, with net zero GHG emissions in the second half of this century, that is, much earlier than considered for the 2 °C strategy (see Rogelj et al., 2015; Rogelj et al., 2018; Kriegler et al., 2018; van Vuuren et al., 2018). For this purpose, the European Commission proposed in November 2018 a long-term strategy, which includes scenarios targeting emissions reduction in 2050 at 95% GHG and more. Therefore, possible ways to reach net climate-neutrality in the EU energy system came up on the policy agenda.

Given the abovementioned considerations, a series of questions arise that this paper seeks to address:

Can the 2030 climate and energy framework deliver a decarbonised economy in the long term?
Is climate-neutrality by 2050 in the EU viable and sustainable in the long run?
Is it possible to reach carbon-neutrality solely with conventional fuels and technologies?
If not, what elements to promote in addition to conventional policies and technologies?
Is carbon-neutrality affordable?

We provide answers to the questions drawing from the PRIMES model⁵ results for a large number of scenario projections of the EU energy system quantified up to 2070. The projections formed part of the analytical material⁶ prepared by the authors to inform the European Commission's long-term strategy entitled “A Clean Planet for All”, released in November 2018.⁷

The views reflected in this paper are solely the ones of the authors. Moreover, the figures presented in the paper might slightly differ from the results published by the EC in the in-depth report accompanying the “A Clean Planet for All” communication.

Section 2 presents the concepts and data sources regarding the literature, while section 3 showcases the methodological approach. Section 4 presents the quantitative results and section 5 concludes the paper.

Section snippets

Concepts, data sources and review of literature

“Climate-neutrality” is equivalent to the net phase-out of all GHG emissions (Höhne et al., 2015). “GHG-neutrality” (net) has the same meaning, although it is more specific than climate-neutrality. “Carbon neutrality” (net) is a similar concept but only for CO₂ emissions. Climate-neutrality of a fuel or energy vector implies net zero GHG emissions over its entire lifecycle, considering that carbon sinks are naturally occurring during the formation of the raw feedstock used for its production.

Methodology

Modelling how the EU energy system can reach climate neutrality is challenging research. We had to enhance the modelling framework and the underlying data considerably, and also extend the time horizon until 2070. The model enhancements concerned both demand and supply modules. An overview of the main enhancements includes:

An extension of the industrial energy demand module to include direct uses of hydrogen in high-temperature applications (e.g. iron and steel for direct reduction of iron ore)

Can the 2030 climate and energy framework deliver a decarbonised economy in the long term?

To answer this question, we have developed a Baseline scenario which assumes full implementation of the EU energy and climate policy package for 2030, but no additional measures after 2030. We assume that the EU-ETS, enhanced by the market stability reserve regulation, continuous conveying high carbon price signals to the sectors subject to ETS, such as power generation. As a consequence, power generation decarbonises considerably.

However, despite the trends in the power sector after 2030, GHG

If not, what additional elements to promote in addition to conventional policies and technologies?

Based on a post-analysis of the scenario outcomes and the consulted literature, we classify the possible decarbonisation policy options considered in the analysis into two categories, as shown in Table 3. The “no-regret” category includes options that already exist in the 2030 climate and energy policy packages, should be upscaled in the period after 2030 and will unavoidably hold a significant role in the long-term transition; their presence was evident in all scenarios modelled. On the other

Conclusions

The quantitative analysis undertaken through the model confirmed that the decarbonisation of the EU economy by mid-century is viable both technically and economically, regardless of the ambition level (limit temperature increases to well below 2 °C or 1.5 °C compared to pre-industrial levels); the pursuit of a sustainable climate-neutral EU economy by 2050 is a plausible target. It has also confirmed the “no-regret” character of actions focusing, among others, on efficiency improvements –

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^☆: The authors acknowledge funding by the European Commission (EC) and declare that the paper reflects strictly personal opinions and may not represent the EC official position.

View full text

Energy-system modelling of the EU strategy towards climate-neutrality☆

Highlights

Abstract

Introduction

Section snippets

Concepts, data sources and review of literature

Methodology

Can the 2030 climate and energy framework deliver a decarbonised economy in the long term?

If not, what additional elements to promote in addition to conventional policies and technologies?

Conclusions

Int. J. Hydrogen Energy

Petroleum

J. Clean. Prod.

Renew. Sustain. Energy Rev.

Appl. Energy

Appl. Energy

Energy Policy

Energy Strategy Rev.

Energy Strategy Rev.

Energy Strategy Rev.

Sustain. Cities Soc.

Biomass Bioenergy

Renew. Sustain. Energy Rev.

Int. J. Hydrogen Energy

Energy Policy

Renew. Energy

Energy

Energy Procedia

Energy

Appl. Energy

Energy

Sustain. Cities Soc.

Appl. Energy

Energy

Int. J. Hydrogen Energy

Energy Policy

Transp. Res. Procedia

J. Energy Storage

Energy Convers. Manag.

Appl. Energy

Electr. Power Syst. Res.

J. Clean. Prod.

Appl. Energy

“A 100% Renewable Gas Mix in 2050?” Report by ADEME

“Integration of decentralized energy systems with utility-scale energy storage through underground hydrogen–natural gas Co-storage using the energy hub approach”

Ind. Eng. Chem. Res.

Study on hydrogen from renewable resources in the EU

“A standardized methodology for the techno-economic evaluation of alternative fuels – a case study”.

Fuel

Cost concepts for climate change mitigation

Clim. Change Econ.

“Technology Study: Low carbon energy and feedstock for European chemical industry”. DECHEMA Gesellschaft Für Chemische Technik und Biotechnologie

New Technologies that Could Transform How Industry Uses Energy

Net-zero emissions energy systems

Science

Life-cycle analysis of greenhouse gas emissions from renewable jet fuel production

Biotechnol. Biofuels