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Electricity production, transmission and storage – challenges for the future European electricity system

Executive summary

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Even if energy consumption in Europe is decreasing through energy efficiency, total European electricity usage is increasing due to new markets and uses, for example IT, and also by the perceived increase in electrification in the heating and transport sectors. An increased electrification of the energy system is a trend across the globe and the growth in electricity demand and capability has the potential of transforming both energy supply and end use.
Electricity has historically been generated by mainly fossil fuels together with hydropower and nuclear power. An increased electrification requires further measures to reduce the share of fossil fuels in the future electricity production system. A growth in electricity demand and change in character of the electricity supply system require increasingly strategic approaches to balance supply and demand. The future electricity generation system is expected to be composed of a combination of central power plants and numerous small decentralized plants.
Important prerequisites for a European-wide electrification of the energy system are the development of infrastructure, harmonisation of the national electricity systems, the development and evolution of the European internal market, and great strengthening of cross-border collaboration between European countries. It also requires analysis and homogenisation of the subsidies system and an improvement of the EU ETS system, with the objective of replacing the majorities of the subsidies.
Whichever scenario the future European energy system will follow, it will consist of a mixture of intermittent power and dispatchable power. Fossil fuels and nuclear power will dominate the European electricity system for the next 20-30 years. Even with a massive expansion of the renewable proportion, a large part of the power generation in Europe will be based on fossil fuels in 2050. Four possible transformation paths to a fossil free energy system can be identified;

  • Next generation nuclear (short-term, until 2050: GEN III and IV fission reactors, long-term, after 2050: ITER fusion reactor).
  • More cost efficient renewable electricity production and substantial support for balancing power and storage facilities, including biomass, which is a storable renewable energy (in the same way as hydropower with reservoirs).
  • Coal or gas with maximum improved efficiency in combination with carbon capture and storage (CCS), or in combination with H2 from power-to-gas.
  • Power-to-gas in combination with hydrogen storage, making use of excess renewable electricity production at very low cost.

The future power system will most likely be a mixture of the four paths. Gas is likely to play an important role in all possible scenarios of the future, especially if the EU ETS is working correctly (above 30 €/ton of CO2). In addition, energy efficiency on the demand side will be important.

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