Scenarios for decarbonizing the European electricity sector

Abstract

Since the climate conferences in Paris and Marrakesh the outstanding question is not if but how and how fast to enable a decarbonization of the European electricity sector. Nuclear power has a difficult time to survive in electricity markets in all Western countries, such as the U.S., Europe, Japan, etc., and is getting increasingly under pressure due to high costs, and the falling costs of alternative sources, such as renewable energies in combination with storage technologies. This paper compares different approaches to decarbonize the electricity sector in Europe using a specific model developed by the authors called dynEL-MOD. We find that, renewables carry the major burden of decarbonization. Scenario analysis suggests that only in the case of a breakthrough of CCTS some biomass-CCTS plants can play a role by 2050 through their negative CO2-emissions. Nuclear power (3rd or 4th generation), on the contrary, is unable to compete with other fuels even by then, and will, therefore, rely on dedicated national programs to survive until 2050. Incorporating the climate targets makes the investment into any additional fossil capacity uneconomic from 2025 onwards, resulting in a coal and natural gas phase-out in the 2040s. The model is run using different foresight assumptions. Limited foresight thus results in stranded investments of fossil capacities in the 2020s. Using a CO2 budgetary approach, on the other hand, leads to an even sharper emission reduction in the early periods before 2030, reducing overall costs.