In light of climate change and the war in Ukraine, the European energy system is facing an unprecedented transformation. How can this succeed?
Michael Jesberger is the COO of TransnetBW.
Suppose we are in 2050 and the Green Deal is a success. We live in a climate-neutral Europe where renewable energy sources are everywhere. It’s a fantastic vision – but to get there, we have to start from today’s reality and work hard. There is a goal and several possible paths to get there.
It’s no secret that the task would be very difficult under any circumstances. But the Russian invasion of Ukraine has upended existing perceptions about the future of Europe’s energy system in a climate-neutral world and brought the challenges to a new level. Before the invasion, it was commonly accepted that Europe could support its transition by maintaining its external energy trade relations. This view is now obsolete.
Climate neutrality combined with a resilient energy system – how can Europe achieve this goal? As an electricity transmission system operator, it is crucial for TransnetBW to understand the consequences of these decisions, to anticipate the design of the system and to implement concrete projects in order to be able to achieve these objectives while ensuring security of supply.
In our new studyEnergy system 2050 – Towards a carbon-free Europe”, TransnetBW sheds light on the above question. We assume the European Green Deal as a given in 2050 and compare two central scenarios: “Global Markets” (GM), where hydrogen imports outside Europe are expected, and “Energy Resilient Europe” (ERE), which considers a fully European hydrogen production. We highlight five crucial elements that support the 2050 vision: renewable energy, grid infrastructure, sector coupling, hydrogen technology and joint action at European level.
Renewable energies: the power of a more independent Europe
The basis of a climate-neutral energy system is the expansion of renewable energy in the electricity sector. Onshore and offshore wind turbines as well as rooftop and utility-scale photovoltaics need to be significantly expanded. Our most cost-optimal path to achieving the Green Deal targets considers that installed wind energy capacity should be increased up to 5.5 times in EU27 countries compared to current generation capacity . So we need an expansion rate of at least 23-27 GW per year from today to 2050.
At the same time, the installed capacity of photovoltaic (PV) systems is to increase up to 17.8 times the current installed capacity, with an expansion rate of at least 69-80 GW per year. This makes PV the most important energy source, which confirms the importance of the EU Solar Strategy, recently published in combination with the REPowerEU plan. To achieve this goal, we need to start building this capacity now. All Member States will have to agree to allocate significant parts of their territory to the production of renewable energy.
Due to the increasing electrification of the energy system and the expansion of renewable power plants, the energy transition will reduce European energy dependence. By comparing the results of our study for 2050 with the values for 2020, we observe that the oil demand is around 72% lower and gas demand 63% to 83% lower, depending on the scenario.
Grid infrastructure: because renewable energy must be transported to where it is needed
Renewable energy is rarely produced where it is consumed. So this energy must be transported to where it is needed. The transmission network infrastructure becomes essential to transport this green electricity over long distances. The grid infrastructure outlined in ENTSO-E’s latest ten-year grid development plan is only the first step in the grid extension requirement for a successful energy transition. In fact, the the planned 2035 network will not meet the significant transmission needs of the 2050 targets in any of the countries included in the study. The system will be severely affected by network congestions across Europe and therefore the power supply system in 2050 requires further development of the transmission network. In order to meet the electricity demand of a carbon-neutral market, the EU must increase the size of the current electrical interconnection capacity by 2.8. Interestingly, this is true for both of our scenarios. This expansion will be accompanied by the development of cross-border electricity exchanges, which will contribute to putting pressure on energy prices. France, the Netherlands, Poland and Spain will become the largest net exporters while Germany and Italy will become the largest importers of electricity.
Hydrogen: the crucial development of a market and its infrastructures
There is no doubt that hydrogen will play a major role in the climate-neutral energy system of 2050. It will be used intensively as an energy carrier or raw material in industrial processes and as a fuel for the transport sector. In addition, hydrogen will be used as an input for the synthesis of hydrogen derivatives such as synthetic fuels.
But where will hydrogen production ultimately take place? In our global market scenario, 57% of hydrogen production takes place in Europe (specifically in Denmark, Poland, Greece and the Netherlands) while the remaining 43% is imported from countries outside Europe through H2– the pipes. In the Energy Resilient Europe scenario, 100% of hydrogen production is located in Europe; no imports would therefore be necessary from outside the EU.
In contrast to electricity infrastructure, depending on the route taken, the hydrogen infrastructure capacity needed in Europe differs quite starkly: if Europe is to become energy resilient, 46% more hydrogen interconnection capacity is needed and 50 % more electrolyser capacity need to be built, when comparing with the world market scenario. To produce the extra hydrogen in Europe, we also need 15% more renewable energy capacity.
In any case, the EU must build a reliable hydrogen system almost from scratch. There is a long way to go. This is why planning for the construction of a European hydrogen production and network infrastructure must start now.
Coupling of sectors: because we have to think about electricity differently
The idea that “demand determines production” no longer applies in a variable renewable energy system. Temporal flexibility must therefore be guaranteed by storage and demand management in all related sectors (electricity, heating, transport or industry). Price volatility could be a key aspect to boost flexibility and efficiency and could therefore be an important element to take into account in the current discussions on a market design suitable for the future.
Joint action at European level: no single country, company or technology will achieve the Green Deal objectives
For the 2050 vision to become a reality, immediate action is just as necessary as pragmatic solutions to the obstacles we face. Most of the required technologies are already available. What hinders the implementation of the energy transition are local authorizations and opposition.
With its RePowerEU plan, the European Commission has shown the right way: we urgently need to push forward the expansion of renewables and energy infrastructure as a whole. The objectives are widely agreed and understood. Their rapid implementation, however, remains the greatest challenge. A major obstacle to rapid progress remains the permitting procedures. Here, the EU must bring regions and municipalities together with its Member States.
European climate neutrality is possible, but only achievable in time if it is done collectively, by involving citizens in this inevitable transition, so that communities are proud to be part of the change, whether it takes place on their roofs or in their Classes.