New report explores implications of electrification on energy system

24.05.2018

The Centre on Regulation in Europe (CERRE), a Brussels-based think tank, releases a new report ‘Gas and the electrification of heating & transport: scenarios for 2050’. The report identifies impacts on the energy system, as well as on CO2 emissions and social costs associated with electrification scenarios towards 2050.

The EU has shown its eagerness to lead the fight against climate change. The European climate policy aims at reducing CO2 emissions by 80-95% by 2050 compared to 1990 levels. Many European member states envisage the electrification of road transport and domestic heating as one option to reduce CO2 emissions. Looking at Austria, Belgium, France, Germany and the Netherlands, this report considers possible electrification paths towards 2050 and their implications. It sheds light on consequent challenges and options for policy makers and the energy sector.

The report concludes that, as EU member states progressively electrify the housing and transport sectors, gas demand will increase. This can be explained by the ever increasing demand for power, coupled with the phase-out of coal and reduction of nuclear generation planned by some EU member states, as well as the still too limited increase in the share of renewables. In a full electrification scenario, the volatility of renewable sources makes other energy sources, such as gas, necessary for reliability of supply.

Finally, the report notes that a significant increase in power generation and gas consumption, envisaged in a full electrification scenario, could even require a costly resizing of the transmission and distribution networks.

“We observe that while the electrification of the residential and road transport sectors will reduce CO2 emissions, most countries will not meet their decarbonisation goals with full electrification by 2050, unless renewable capacities are significantly expanded” concludes the CERRE research team.

The report and case studies can be accessed here.

FACTS & FIGURES

  • With full electrification, gas-fired power plant capacity in BE, FR, DE and NL should be around 3 to 4 times the current capacity, to ensure appropriate reliability of power supply.
  • The model results show that the social costs of a full electrification scenario by 2050 vary significantly, ranging from 0.5% of GDP in FR to nearly 7% in NL, 2% in AT, 4% in DE and 4,5% in BE.
  • In 2050, under full electrification the CO2 emissions from the residential, road transport and electricity sectors together are expected to decrease by 62% in AT, 70% in DE, 48% in FR, and 40% in NL compared to 1990 levels. In Belgium, the reduction would be limited to 11% due to the closure of nuclear plants and the electricity sector becoming more fossil-fuel based.
  • The estimated cost per ton of CO2 reduction in a full electrification scenario would be 250€ for NL, 146€ for BE, 142€ for DE, 78€ for FR and 54€ for AT.

CERRE RESEARCH TEAM

  • (Coordinator) Professor José Luis Moraga, CERRE & Vrije Universiteit Amsterdam
  • Professor Chloé Le Coq, CERRE and Stockholm School of Economics
  • Professor Machiel Mulder, University of Groningen
  • Professor Sebastian Schwenen, CERRE and Technical University Munich

NOTE

The views expressed in this report are attributable only to the authors in a personal capacity and not to any institution with which they are associated, neither to CERRE, nor to any sponsor or (other) member of CERRE.

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