From Vision to Reality: leading the charge on Europe's path to net zero
The consequences of climate change are having devastating effects on global communities. Wildfires, floods, and hurricanes have posed a threat not only to our infrastructure but to the health and safety of millions. On top of that, we are going through a period characterised by increased geopolitical tensions, aggressive industrial competition and supply chain disruptions. These are the worrying signs of our time.
Such challenges have highlighted now more than ever the crucial importance for Europe to continuing its journey to net zero with decisive action on the ground. But what path is the most efficient and effective for reaching climate neutrality in Europe? Our new study on Decarbonisation Speedways will guide you right through it, but before going into our scenarios for 2040 and 2050 let’s start with understanding what we mean by net zero.
What does “net zero” mean?
In the context of greenhouse gas emissions, the Cambridge dictionary defines a state of net zero as “the point at which a country, industry, company, etc. removes as many emissions - namely gases that cause the earth to warm up greenhouse gasses (GHGs) - as it produces.”
How do we identify net zero targets?
The last decade has seen increased public awareness around pressing climate issues and fostered a number of landmark policy agreements including the European Green Deal and the Paris Agreement. These are some of the first climate change agreements that hold countries legally responsible for delivering on crucial climate goals.
One of the key objectives defined in the European Green Deal is setting a net zero target for Europe’s economy by the year 2050. Recently, the European Commission also presented the REPowerEU plan, seeking to end the EU’s dependence on Russian fossil fuels in response to Russia’s invasion of Ukraine, while still maintaining their target for net zero through rapid GHG removals.
The REPowerEU plan builds upon existing policy packages, including the Fit for 55 plan, which aims to accelerate decarbonisation and achieve power security. Both plans set a target for a 55% reduction in emissions by the year 2030 compared to emissions levels in 1990.
Notable changes made in the REPowerEU plan, however, involved setting higher efficiency gain targets and increasing the rate of renewables deployment, including a doubling of solar photovoltaic (PV) capacity by 2025. Other goals included a doubling of the rate of heat pump deployment, acceleration of permitting for renewables projects, and an increase in the production of biofuels and low-carbon hydrogen.
How do we deliver on net zero targets?
Since the industrial revolution human-driven activities have contributed to global warming of more than 1°C. The effects of this climate change have already proven detrimental to our environment, across land and water ecosystems. Studies based on the science of global warming have shown that a warming of 2°C would cause irreversible damage to our planet, also the basis for the Paris Agreement. For this reason, it is vital that we react by rapidly cutting our emissions.
Achieving a net zero economy requires a rapid shift to low or zero GHG emissions technologies across multiple sectors including buildings, transportation and industry. This requires an evolution of the energy system in Europe calling for immediate action.
Eurelectric’s Decarbonisation Speedways report highlights three scenarios that set to achieve a net zero target. The Fit for 55 inspired and REPowerEU inspired scenarios build on previous policy packages, aiming to achieve a net zero economy by 2050 with some emissions sub-targets for 2030. The Radical Action scenario sets a more accelerated scenario to achieve net zero targets by 2040.
The study gives prominence to the REPowerEU scenario as it sets an ambitious yet realistic framework to achieve the goals laid out by the Commission and provides a summary of some of the benefits that a net zero economy could provide on a national and global level.
In the report, direct electrification is identified as the most effective way to decarbonise at the speed and scale needed for our energy transition to reach net zero targets.
Why is direct electrification so important?
Electrification is the most direct, efficient, and effective way to achieve the society's decarbonisation goal, as it reduces emissions in three ways: switching to carbon-neutral power generation, reducing total energy demand, and replacing fossil-based inputs to industrial processes.
Direct electrification plays a vital role in buildings and transport especially, as internal combustion engines will be replaced with battery-powered electric engines, and fossil fuel-based power boilers will be replaced by electric heat pumps for space heating.
There is huge potential for efficiency gains in these two sectors especially and the right electrification strategy could lead to a total energy demand decrease of 13,507 – 8,292 Terrawatt hours (TWh) from 2015-2050, at roughly a 40% increase in energy efficiency. However, the right strategy for implementing direct electrification requires a perfect storm of multiple enabling factors.
What are the enablers for a net zero energy system?
A market design fit for net zero
An electricity market design must provide both national governments and companies with the right signals for investment. Creating the right market design is important for setting the foundations to plan for a rapid transition of the system.
Improved financial frameworks:
Investments must happen quickly and must be incentivised by the government through legislation. Having a solid framework set in place will catalyse investments for innovation in new technologies for decarbonised power generation as we try to meet our net zero target.
Strengthen distribution grid:
Proper investment serves as the water for the sprouting of much needed grid infrastructure. To account for the rapid electrification of our economy and meet the integration of renewable energy sources (RES), making investments in the grid, especially at a distribution level, is crucial. Expanding the grid is important, but modernising outdated infrastructure is equally important in making the grid resilient.
Between 2020 and 2030, investment in the distribution grid must reach €38 billion per year, all the way to €69 billion per year from 2030 to 2050. Anticipatory investments can serve as a catalyst in this process.
Accelerated Permitting:
For build-out of renewable power generation capacities and grids, land use policies as well as permitting must be accelerated.
Industrial policy:
To ensure that Europe stays industrially competitive in leading the way for new technologies for the supply of raw materials and improving our supply chains, we need a cohesive industrial policy as a support mechanism.
Skills and training:
Technology development and maintenance requires investment in trained and qualified personnel.
In summary, all enabling factors greatly contribute to the widespread integration of high renewable capacity in the coming decades, but managing this input requires sufficient flexibility to match.
What do we mean by flexibility?
Flexibility refers to an electricity system’s ability to respond to variations in electricity supply and demand. Renewables inevitably come with a certain degree of variability in both supply and demand, over short and long periods. This variability can derive from changing weather patterns over time. There will be periods in the year when the sun might not shine, and the wind may not blow. Variability can also happen in a matter of seconds, in the case of a wind turbine suddenly tripping out for example. For the scenarios outlined in the report, we need flexibility to assist in increasing or decreasing supply or demand characteristics in a controlled manner.
How do we provide flexibility for a net zero economy?
To provide the significant amount of flexibility needed for the grid – ranging from 531 TWh to 782 TWh by 2050 – a mix of technologies is required in electricity supply, demand, and storage. Finding the right mix, however, is a very precise science.
Supply:
Flexibility electricity generation comes from sources like hydropower plants, via turbines and pump storages, gas-powered generation plants fuelled by low-carbon hydrogen, and other biofuels.
Storage:
Implementing storage technologies will be key in providing adequate flexibility to the system. Here there are significant opportunities for technological developments in long-term energy storage. Storage offerings come in the form of vehicle-to-grid (V2G) electric vehicles, which communicate interactively with the grid and even return electricity to the grid to meet energy demand. Storage flexibility also relies on the technological developments in prosumer and utility-scale batteries, further increasing efficiency.
Demand:
Demand-side flexibility means being able to control or change the demand in the system for specific durations via system operators. The transition will involve increased implementation of heat pumps and a rapid roll-out of smart-charging infrastructure in the buildings and transport sector, contributing a significant amount of flexibility on the demand side. It is crucial however that demand is matched in real-time through Demand Side Response (DSR) in industrial sectors for example. But Intelligent energy use will increase efficiency across all sectors and account for a significant increase in flexibility.
We have been able to target electrification as the most efficient route to decarbonisation, but how does it translate into different sectors of Europe's economy?
How do we transition to a net zero energy system in Europe?
Decarbonisation speedways vary by country in Europe and there is not a one-size-fits-all solution to reaching net zero. European governments all rely on a different makeup of power generation for their respective economies. Therefore, our long-term approach needs to be holistic and help find the right electricity generation mix for each country.
We need to consider factors such as geographical advantages or disadvantages and the share of heavy industry to find achievable solutions and logical next steps at the state level. In many countries, this means that clean generation technologies such as nuclear will play a complementary role in the short term. Then in the heavy industry sector, companies’ use of clean hydrogen and other low-carbon fuels will also be needed in countries with higher shares in heavy industry.
Decarbonising our economy requires a rapid transition to direct electrification, especially in transport and buildings. It also requires low-carbon alternatives in hard-to-reach sectors such as heavy industry. If immediate action is taken and enabling factors are set in place, a decarbonised economy and net zero energy system will come with substantial benefits.
What are the benefits of decarbonisation?
Sustainability and Climate Benefits:
A net zero power system can fuel European and global economies for decades. Not only will it help in combatting climate change, but also in increasing the sustainability of our society’s practices.
Decarbonising our economy in the long term can lead to €22-27 billion in annual CO2 savings and significant reduction of greenhouse gas emissions into the atmosphere. This new model could result in €40-140 billion in annual savings in health spending and contribute to 58,000 premature deaths avoided. It will lower the carbon footprint of European products and assist preservation efforts for ecosystems and biodiversity that have already been impacted by the climate crisis. A net zero economy will also help to ensure higher food and water security.
Economic benefits:
We could see €30-35 billion of annual revenues for EU companies for manufacturers and service providers and over 400k quality jobs created per year at the distribution level alone.
For households, the transition will result in lower energy bills thanks to the efficiency of direct electrification in contrast to burning fossil fuels. These efficiency gains could contribute to €28-37 billion saved in average electricity cost for residential homes and companies. Relying on electrification also cuts the necessity for importing fuels, saving an additional €175 billion annually and pushing Europe’s government into a more competitive position and paving the way for clean technologies.
