NewEnergyNews: TODAY’S STUDY: Using New Energy To Electrify Europe

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  • TODAY AT NewEnergyNews, December 10:

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    Tuesday, November 20, 2018

    TODAY’S STUDY: Using New Energy To Electrify Europe

    Breaking New Ground; Wind Energy and the Electrification of Europe’s Energy System

    September 2018 (WindEurope)

    Executive Summary

    Europe has long spearheaded the global fight against climate change. Now Europe is examining its 2050 decarbonisation strategy. This includes pathways to net zero Greenhouse Gas Emissions (GHG) in 2050.

    Such a transition represents a formidable challenge, but it is also a remarkable opportunity for the European economy. Renewables-based electrification is key to the decarbonisation of Europe’s energy system. If EU policymakers make a clear choice for renewables-based electrification, Europe will hold the key to a successful decarbonisation strategy while ensuring it retains its competitive edge in key climate mitigation technologies. In the process, Europe will make its energy system more resilient, drastically cutting dependence on imported fossil fuels, improving Europeans’ living standards by limiting air pollution and cutting the energy bills of citizens and businesses.

    This report sets out two scenarios to decarbonise the EU economy:

    • an accelerated electrification scenario, which speeds up the effects of current policies by envisaging their impeccable implementation; and

    • a Paris-compatible scenario, which would ensure global temperature rises are well below 2 degrees, and thus requires more ambitious policies.

    The report also analyses the policy levers that will drive electrification and addresses the challenges related to the electrification of three sectors: industrial processes, transport and buildings. Crucially, the report also spells out the implications of shifting to a renewables-based energy system for both infrastructure and system integration.

    With the right policies it is technically and economically possible to increase the share of electricity in energy from 24% today to 62% in 2050, 78% of which would be coming from renewables. And thanks to its cost-competitiveness and scalability, wind energy is uniquely placed to make a central contribution to this transition.

    Key findings

    Europe’s energy future is electric

    • With ambitious Paris-compatible policies, Europe’s electricity share in energy use could reach 62% in 2050.

    • By contrast, even an impeccable implementation of current policies up to 2030 would yield only 51% of electricity share in energy use by 2050.

    • Pursuing a Paris-compatible trajectory would reduce Europe’s energy-related emissions by 90% by 2050.

    • By contrast, an impeccable implementation of current policies up to 2030 would reduce Europe’s energy related emissions by only 74% by 2050.

    • Integrating transport and heating into a renewablesbased power system is the next frontier that will shape the future of Europe’s energy system.

    Renewables-based electrification benefits Europe

    • It would both decarbonise and boost the European economy.

    • It would reduce dangerous air pollutants from cars, industry and homes.

    • It would strengthen energy security by decreasing the amount of fuel imports from foreign countries.

    • It would improve energy efficiency and reduce final energy demand.

    • It would accelerate digitalisation, allowing customers to take control of their energy bill.

    An ambitious electrification is affordable

    • Energy expenditure in the Paris-compatible scenario would be 2.7% of Europe’s annual GDP to 2050, only 0.5 percentage points more than the accelerated electrification scenario.

    • The Paris-compatible scenario would reduce the costs of climate change mitigation. These costs would amount to 0.86% of Europe's annual GDP. By contrast, not implementing this scenario would carry costs amounting to 1.2% of Europe's annual GDP.

    Renewables-based electrification drives down energy consumption

    • The Paris-compatible scenario means 33% in overall energy savings to 2050. Energy demand in industrial processes would fall 36%, 18% in buildings and 46% in transport.

    • By contrast, the accelerated electrification scenario means only 30% in overall energy savings to 2050. Energy demand in industrial process would fall 36%, only 7% in buildings and 51% in transport.

    Industrial processes are key to meeting the Paris Agreement

    • The Paris-compatible scenario means reaching an 86% share of electricity in industrial processes by 2050.

    • But the accelerated electrification scenario only delivers a 62% share of electricity in industrial processes by 2050.

    • The Paris-compatible scenario would reduce 88% energy-related emissions from industrial processes by 2050. But the accelerated electrification scenario would only reduce emissions by 70%.

    Heat pumps in buildings to drive breakthrough

    • The use of electric heat pumps will drive energy savings and emissions reductions. Although they represent only 2% of today’s final energy demand for heating and cooling, they are quickly spreading.

    • In the Paris-compatible scenario, electrification in commercial buildings would be 78% by 2050. By contrast, under the accelerated electrification scenario, this would be only 62%.

    • In the Paris-compatible scenario, electrification in household buildings would be 59% by 2050. By contrast, under the accelerated electrification scenario, this would be only 39%.

    • The Paris-compatible scenario would reduce 70% energy-related emissions from buildings by 2050. But the accelerated electrification scenario would only reduce emissions by 50%.

    The mass uptake of electric transport will take place under all foreseeable scenarios, but needs policies to sustain it

    • Sales of passenger vehicles with internal combustion engines will peak in 2025 under current policies.

    • According to both the Paris-compatible and the accelerated electrification scenarios, electric cars should account for 95% of new sales by 2035.

    • According to both the Paris-compatible and the accelerated electrification scenarios, rail transport should be 90% electric by 2030.

    • According to the Paris-compatible scenario, hydrogen demand could be up to 426 TWh/year - equivalent to 4.8% of energy demand in 2050 - mainly to heat buildings and as a fuel for road transport.

    • The uptake of hydrogen cars, however, requires further policy ambition.

    Wind energy at the heart of electrification in Paris compatibility

    • Wind energy could install more than 20 GW/year from 2030-2050.

    • At this rate, wind energy would generate 2,223 TWh of electricity by 2050, equivalent of 36% of Europe’s power generation.

    • Renewables would then account for 66% of Europe’s final energy demand, significantly contributing to a 90% reduction of CO2 emissions.

    • Investment costs for onshore wind would average €1.1m/MW by 2050, a decrease of 30% from today. Offshore costs would be €2.2m/MW, a 23% decrease.

    Electrification is essential for the optimal integration of variable renewables

    • The massive uptake of electric batteries for passenger vehicles would provide enough short-term storage capacity for managing high shares of wind and solar PV, even assuming that only 10% of EV battery capacity is made available to the grid.

    • For longer timeframes, power-to-X development would provide the required seasonal storage capacity and will become an important source of flexibility.

    • Managing the future energy system requires a paradigm change in the use of digital technologies.

    Power grids deployment is a no regret option

    • Developing more and stronger power grids is a precondition of any electrification and decarbonisation pathway in Europe.

    • Europe would need 12,000 GW-km/year of new power lines by 2050.

    • Significant development of DC technologies and LV power lines will drive the expansion.

    Policy Recommendations

    Europe must make a clear choice in favour of the renewables-based electrification of industrial processes, buildings and transport as the key driver of its decarbonisation strategy.

    • The EU should ramp up its emissions reduction objective for 2030 to 45% now and use the 2023 ratchet-up mechanism to adjust its emissions reduction trajectory to its long-term decarbonisation objective.

    • Member States should adjust their energy tax regimes for electricity and fossil fuels to incentivise decarbonised energy use.

    • Market design rules should enable the use of dynamic electricity pricing contracts and time responsive grid tariffs to incentivise demandside flexibility.

    • Market design rules should avoid market exit barriers for the most carbon intensive power generation assets.

    • ENTSO-E’s 10 Year Network Development Plan should reflect the infrastructure needs of the Paris-compatible scenario and accelerate the roll out of smart low voltage grid.

    • The EU’s Connecting Europe Facility should prioritise electricity projects and the deployment of ultra-fast vehicle charging infrastructure.

    • The EU and Member States should adopt zeroemissions vehicle sales targets as part of the post-2020 CO2 standards for passenger cars and light commercial vehicles.

    • To unlock the massive potential of renewablespowered green hydrogen, Horizon Europe and national R&D programmes should prioritise R&D funding for electrolysers. Governments should also adopt network charge exemptions that enable electrolysers to benefit system operations.

    • Member States should spell out electrification measures as part of the National Energy and Climate Plans to 2030 notably for industrial processes and buildings.

    • The EU should mainstream the electrification of industrial processes as part of its strategy for a smart, innovative and sustainable industry

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