Optimising carbon reductions

In December 2019, Ursula von der Leyen, President of the European Commission, officially launched the European Green Deal that aims to make Europe the first carbon-neutral continent by 2050. Is this a realistic goal? “Decarbonizing Central Western Europe”, an ENGIE study conducted in several countries in 2019, provides some answers to the question. It analyses the shift in energy production toward clean sources of energy from an economic viewpoint. More specifically, it aims to test the feasibility of making Western Europe’s electricity, heating and transport sectors carbon neutral by 2050 and  to identify the optimal path for the economy taking the advantages of each energy vector into consideration.

In addition to the electricity sector, which is familiar territory when it comes to creating energy models, other energy uses such as industrial and residential heat production, transport and agriculture were the subject of simulations in order to work out the effects of different substitutions, which are an inherent part of climate change mitigation. The aim is to find the optimal mix of energy sources (electricity, biogas, hydrogen and biomass) in terms of usage.

For reasons of public acceptability and the question of site availability, carbon capture and storage (CCS) was not taken into account. We did however consider all the other energy technologies, including storage systems and solutions to facilitate flexibility (such as vehicle-to-grid), which contribute to meeting the goal of a zero carbon system. It is worth noting that in order to reach this objective, ambitious efforts will be required in terms of energy efficiency that will lead to a reduction in final energy demand of almost 41% by 2050.

Compared to most of the available studies that simulate annual figures, or just the final picture in 2050, or only focus on one sub-sector, this study represents a decisive step forward as it considers a combined optimal mix for all energy uses with a hourly granularity analysis. Thanks to this study, we can now see the real impact of technical and economic constraints, such as seasonal variations in energy consumption and production, peaks in consumption and the economic interdependence of production sources.

Five different scenarios were modelled. Let’s take a look at the two most representative one amongst those that ensure a successful energy transition: an early adoption of electrification and multivector energy integration. In the first scenario, Europe would mainly replace elements of its current energy mix with green electricity, relying solely on domestic resources to remain energy independent and rapidly and massively electrifying end-uses. This scenario implies an intense programme of electrification to meet more than 60% of energy needs, compared to just 25% today.

In the second scenario, Europe promotes the development of green electricity and green gases (biomethane, green hydrogen etc.) and imports green gas from certain trading partners as required. Even in this scenario that allows for imports, the energy independence of the zone of Europe under consideration would be much greater than today (82% in 2050 compared to 17% today).

Both scenarios analyse the flexibility of the power system that results from the optimal use of resources, from battery storage to thermal power stations fuelled by green gas. Contrary to the situation today, critical voltage is no longer the time of absolute peak demand, but the period when the difference between demand and the contribution of intermittent renewable resources is greatest, for example several consecutive days without wind during the winter. Such factors have a greater effect on the electrification scenario and, as a result, more flexibility resources need to be deployed to cope with them.

What are the main results and what lessons have been learned? First of all, the reassuring news is that several scenarios with varying amounts of electrification will allow us to achieve carbon neutrality. In every case, a successful energy transition rests on three pillars: energy efficiency, the massive development of renewable electricity and the optimised allocation of different energy vectors to meet the various uses. This last point implies the use of gas (natural and then renewable) whenever it is more competitive and harder to substitute.

A question of cost

Another lesson is that moving toward zero emissions in the context of a multi-vector energy scenario is less costly (see figure below) than electrification. The difference in cost based on the net present value of the entire energy system amounts to 650 billion euros.

What are the reasons for this extra cost? 

In fact the multi-vector energy scenario does away with the need to increase power system flexibility and to dramatically increase the size of the electricity transmission and distribution network in order to cope with a more distributed power capacity in location and time. The study also shows that European biomethane resources are used in full in every scenario, in association with 500 terawatthours of green hydrogen, which is slightly higher than the current French consumption of natural gas. The complement would either come from green gas imports (in the multivector energy scenario), or by additional hydrogen production in Europe (in the electrification scenario). In Europe,

France has a competitive advantage in terms of renewable resources (wind and solar power, biomass) and will have to call upon all of them. Relying on only two of the three resources would lead to an unnecessary increase in the size of Europe’s power system, in addition to the annual development needs for renewable capacities that already amount to 44 gigawatts (27 for solar and 17 for wind) over a 30-yearperiod, which is a major challenge both in terms of investment and acceptability.

At the end of the day switching to electricity for certain end-uses is indispensable, but if we go too far along the avenue of electrification, it could be at the risk of an excessively abrupt energy transition from a technical standpoint and one which would not be beneficial for the environment. When the effects are measured throughout the value chain - and not just in terms of energy production and consumption - making full use of the various low carbon energy vectors (including green gases) allows for a more resilient and less expensive energy transition.

The European Commission should take note!

Written by:

Hugues de Peufeilhoux, Gauthier de Maere d’Aertrycke and Pierre-Laurent Lucille, ENGIE