EU "Energy Roadmap 2050"

Rising electricity prices through 2030, and a key role for both renewable sources and nuclear energy, are foreseen in the European Commission’s “Energy Roadmap 2050”, which was presented last week and examines the ways in which the EU can ensure safe, secure, sustainable and affordable energy in the coming decades.

The document explores future challenges to achieving the EU’s target of reducing greenhouse gas emissions to 80-95% below 1990 levels by 2050, and analyses the possible solutions.

Context

The Roadmap follows two other Strategy Papers presented earlier this year: the “Roadmap” for moving to a competitive low-carbon economy in 2050 and the “Roadmap” to a “Single European Transport Area”. Together, these three papers lay out the strategy for achieving the EU’s decarbonisation objective. The Energy Roadmap focuses in particular on security of energy supply and competitiveness.

Scenarios

The Energy Roadmap analyses a number of possible future scenarios that might occur as Europe moves towards 2050. These scenarios are designed to take into account various future uncertainties such as oil peaks, the viability of shale gas and whether carbon capture and storage (CCS) will become commercially successful.

Reference Scenario

The reference scenario uses current trends and long-term projections on economic development. Slightly lower and higher GDP growth rates, along with energy import price fluctuations, are taken into account.

Current Policy Initiatives

This scenario takes into account the adoption of measures envisaged in the Energy 2020 Strategy, including the Energy Efficiency Plan and the new Energy Taxation Directive.

High Energy Efficiency

The High Energy Efficiency scenario foresees high energy savings by including stringent minimum requirements for appliances and new buildings, high renovation rates of existing buildings and setting out energy savings obligations on energy utilities. This scenario would lead to a decrease in energy demand of 41% by 2050 compared to the peaks in 2005-2006.

Diversified Supply Technologies

In this scenario, decarbonisation is driven by carbon pricing, and assumes public acceptance of both nuclear power and CCS.

High Renewable Energy Sources

This scenario anticipates strong support measures for renewable energy sources leading to a share of 75% renewables in gross final energy consumption and a share of renewables in electricity consumption of 97% by 2050.

Delayed CCS

This scenario is similar to the Diversified Supply Technologies scenario but assumes that CCS is delayed, leading to higher shares for nuclear energy. Decarbonisation would therefore be driven by carbon prices rather that advancements in technology.

Low Nuclear

The Low Nuclear scenario assumes that no new nuclear reactors will be built, resulting in a higher penetration of CCS of around 32% in power generation.

Scenario Conclusions

Drawing from these different scenarios, the Commission has come up with the following conclusions as regards the future of the energy sector:

Likely structural energy changes:

  • Decarbonisation is possible and can be less costly than current policies in the long-run, which reflects a significant shift of the role energy plays in society.
  • Electricity will play an increasing role, almost doubling its share in final energy demand to 36-39% in 2050 and will contribute to the decarbonisation of transport and heating/cooling.
  • Most scenarios suggest that electricity prices will rise around 2030 and decline thereafter.
  • Energy savings throughout the system are crucial to reach the decarbonisation objectives for 2050.
  • Share of renewable energy will rise substantially, reaching at least 55% of gross final energy consumption in 2050.
  • CCS, if commercialised, will have to contribute significantly in most scenarios and play a key role in system transformation.
  • Nuclear energy will significantly contribute to the energy transformation process in Member States using this source of energy and will remain a key source of low carbon electricity generation.
  • Centralised large-scale systems and decentralised systems will increasingly have to work together.

Opportunities identified

  • The main priority in all scenarios remains energy efficiency. A key area identified in the Roadmap for improving energy efficiency is the buildings sector, where nearly zero energy buildings should soon become the norm.
  • The analysis of all scenarios shows that the biggest share of energy supply technologies in 2050 will come from renewables. All the decarbonisation scenarios suggest growing shares of renewables of around 30% in gross final energy consumption by 2030. The role of renewable heating and cooling and biomass will be vital for the decarbonisation.
  • The substitution of coal and oil with gas in the short and medium term could help reduce emissions with existing technologies until at least 2030 or 2035.
    The role of fossil fuels will change in the upcoming decades. With the development of CCS and other emerging clean technologies, coal could continue to play an important role in sustainable and secure supply in the future.
  • Nuclear energy will also in the future contribute to lower system costs and electricity prices. As a large scale low-carbon option, nuclear energy will remain in the EU power generation mix. The Commission will work towards ensuring nuclear safety.
  • All the scenarios analysed show that fuel mixes could change significantly over time. Much depends on the acceleration of technological development. Technology is an essential part of the solution to the decarbonisation challenge, yielding significant cost reductions and economic benefits.

Rethinking energy markets

One of the challenges identified concerns the need for flexible resources in the power system, for example flexible generation, storage and demand management as the contribution of intermittent renewable generation increases. This will have an impact on wholesale market prices. The Commission will continue to build on the 3rd internal energy market package to ensure that the regulatory framework stimulates market integration.

With electricity trade and share of renewables growing under almost all scenarios up to 2050, adequate infrastructure for distribution, interconnection and long-distance transmission will be a matter of urgency. The Commission intends to eliminate energy islands by 2015.

Mobilising investors

A wide-scale replacement of infrastructure and capital goods throughout the economy, including consumer goods in people’s homes, will be necessary. The Commission anticipates that very substantial upfront investments will be needed, with return over a long period of time. Accordingly, the Commission calls for Research and Innovation efforts to be put in place quickly.

Engaging the public

The social dimension has also been considered, since energy developments will affect employment and jobs, require education and training and lead to strong social dialogue. In order to efficiently manage the changes ahead, the Commission calls for the involvement of social partners at all levels.

The international level

Finally, conclusions on the international dimension of energy policy have been developed. The Commission believes that the EU needs to secure and diversify its supply of fossil fuels, while at the same time develop cooperation to build international partnerships on a broader basis. Closer partnerships with EU energy partners, including Norway, Russia, Ukraine and Azerbaijan, will be required.

Next Steps

The Communication will now be sent to the European Parliament and the Council for examination. The European Parliament is likely to prepare an own initiative resolution in reply to the Commission Strategy, and the Council will also probably adopt conclusions on the initiative.

The Commission plans to follow up with further policy initiatives on specific energy policy areas in the coming years, starting with proposals on the internal market, renewable energy and nuclear safety next year.