The European power sector could be fully decarbonised ahead of the 2050 targets set in the Paris Agreement if enough effort is put into electrification and deployment of renewable energy, according to a Eurelectric study.
The latest output from Eurelectric’s Decarbonisation Pathways study said increased investment in renewables and grids will be necessary to beat the 2050 target, but that as renewables become more cost-competitive it should be possible to decarbonise five years sooner than the Paris Agreement deadline, by 2045.
The study is due to be presented at a high-level event in Brussels on 27 November featuring EU vice president Maroš Šefčovič, IEA chief Fatih Birol and several prominent power sector chief executives.
According to the study, cost-effective pathways to 2045 will depend on four key elements. The first is that 80% of electricity supply should come from renewables; the second is diversification of power sources to ensure system reliability and flexibility; third is the changing role of conventional generation, which will provide back-up energy while gradually being less used for energy production; and fourth is the maturity of CO2 offset and power-to-gas technology, such as producing green hydrogen via electrolysis, using electricity from renewable energy.
“Higher investment in renewables and infrastructure are required to reach full decarbonisation while simultaneously meeting higher power demand stemming from increased electrification,” Eurelectric said.
The study shows that, despite growing investment, the overall cost of electricity supply in a fully decarbonised system is lower than estimated due to the rapid cost reduction in renewables.
“By 2045, wholesale power prices are expected to reach €70-75 per MWh, which is significantly lower than other existing projections, such as the €105 per MWh estimated by the European Commission,” Eurelectric said.
Eurelectric president and chief executive of Enel, Francesco Starace 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.
Eurelectric said an increasing share of renewables in EU generation mix will require greater system flexibility, calling for the build-out of interconnectors, reinforcement and digitalisation of distribution grids, as well as the scale-up of 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.