On 4 March 2020, the European Commission made a fundamental move by submitting a proposal for the “Climate Law”, pledging to become the first climate-neutral continent. This vision is much needed at a point in time where our traditional vision of growth and industrial development is being challenged by the depletion of earth’s resources, collapse of our natural ecosystems, staggering levels of global warming and an unprecedented health crisis putting in question our production and consumption models. European citizens and civil society are leading the way, starting with our youth – in 2019, thousands of climate strikes took place across nearly every European country. As a Member of the European Parliament for 19 years, I have carried out the fight against climate change, and proudly contributed to the adoption of the 2009 Energy and Climate Package that established a vivid home market for an exponential growth of renewables and made the EU a global leader. Adopted in 2019, the Clean Energy Package is another critical milestone in boosting the deployment of renewable energies and energy efficiency in the next decade, as the most cost-efficient solutions to tackle climate change. It places Europe on the right path to achieving climate neutrality by 2050, but the size of the challenge requires us to step-up our ambitions. In my current role as Energy Minister of Luxembourg, I have teamed up with colleagues from Austria, Denmark, Ireland, Lithuania, and Spain, calling on the European Commission to include a 100% renewable energy scenario in the Commission’s 2050 energy and climate projections. On 14 April 2020, together with 180 ministers, MEPs, CEOs, NGOs and Trade Unions, we launched the European alliance for a green recovery after the corona crisis that should act
as an accelerator of the transition towards climate neutrality. As political leaders, we must demonstrate to the younger generations that they have been heard, and that the most ambitious scenarios possible are being seriously considered to help fight climate change and create a more resilient and sustainable Europe.

KEY FINDINGS & POLICY RECOMMENDATIONS

Policy Recommendations A clear commitment towards achieving climate neutrality before 2050 and complying with the ambitious Paris Agreement targets is a necessary signal to accelerate investments in renewable energy technologies across all sectors of the EU economy. Taking into account the massive volume of solar and wind that needs to be installed to achieve 100% renewables by 2050 – at least 7.7 TW solar and 1.7 TW wind – policy makers must in this decade focus on creating the right policy and financing frameworks to enable this unprecedented growth.

The key trends and insights that emerge from the research include: High rate of electrification is essential to achieving a 100% renewable and integrated energy system. A fundamental shift towards high levels of electrification will shape the European energy transition, which is currently based on 8 fossil fuels and nuclear. Electrification across the energy sector – comprised of power, heat, and transport – results in the highest electrification share of 86% for the Leadership scenario, and the relatively low share of 51% for the Laggard scenario (see Fig. 0.2). Despite an overall increase in the demand for energy services across the power, heat and transport sectors, the primary energy demand declines with higher shares of electrification due to increased efficiency. This indicates a highly sector coupled and efficient energy system based on renewable power in the future.

Power: A 100% renewable European energy system is primarily a solar story. Due to its cost competitiveness, solar PV will become the dominant source of electricity generation across the three scenarios. Solar provides the largest capacities over the course of the energy transition, reaching 4.7–8.8 TW in 2050; as of 2040, solar will represent the largest generation shares, and by 2050 it will reach at least 48% in the Laggard scenario and 63% in the Leadership scenario. By 2050, the other power pillar of the energy transition, wind energy, will, depending on the scenario, account for 28–33% of generation shares, and 1.1–1.9 TW of capacity.

A 100% renewable transition triggers the sharpest decline in GHG emissions. An accelerated energy transition to a 100% renewable scenario not only means a faster decrease of power generation costs, but also results in a more important benefit: there will be a lower level of GHG emissions in Europe. Following the path of the 100% renewable scenarios (Moderate and Leadership), GHG emissions will decline by over 60% (from 1990) by 2030, and will be down to zero in 2050, or even 2040 in the Leadership scenario, which meets the EC’s climate neutrality and Paris Agreement targets. In the least ambitious Laggard scenario, Europe reaches only 53% CO2 emission reductions in 2030 and still emits around 800 million tonnes of CO2 (MtCO2eq) per year, thus missing both climate targets.

In her announcement of a Green Deal for Europe as the flagship initiative of European Commission (EC), President Ursula von der Leyen underlined the fact that the fight against climate change is a top priority for the European Union’s executive body. As a longstanding pioneer in advancing the energy transition in previous years, Europe now strives to become the first climate-neutral continent by 2050. The Green Deal includes a large package of measures for which the details are currently being worked out, including a European ‘climate law’, the revision of Europe’s 40% GHG reduction target by 2030 to 50-55%, and up to €100 billion in financing for the just transition to transform the EU economy in service of the EU’s citizens and environment, in line with the ambitious objectives of the Paris Agreement. The EC also reaffirmed the crucial role of renewable energies in the Green Deal framework but did not specify clear targets for the development or deployment of renewable technologies. So far, the EC has examined nine scenarios that were modelled internally in 2018, well before the Green Deal was a core topic, and none of them target full climate neutrality of the energy system without resorting to carbon sinks. However, no economy with the size of the EU has agreed to transition its entire energy system towards climate neutrality; this is a gigantic task taking into account the status of renewables in the EU (see Fig. 1.1). Despite the growth of renewables in the power sector across the EU to around 32% in 2018, the remaining energy sectors are lagging far behind. Heat consumption remains heavily based on fossil fuels, primarily gas, resulting in a renewables heat share of around 20%, of which the bulk, around 15%, comes from bio resources. In the transport sector, the renewables share is even lower, at 8%.* Energy for the transport sector – including road, rail, marine, and aviation – makes up nearly 40% of the EU’s final energy demand. Despite gains in efficiency, the transport sector accounts for two-thirds of overall oil consumption, since all dominant transport technologies rely on fossil oil-based fuels. Moreover, it is both the largest individual sector in terms of overall EU GHG emissions, and the only sector with rising emissions.

METHODOLOGY: MODELLING THE INTEGRATED EUROPEAN ENERGY SYSTEM TRANSITION The LUT Energy System Transition model12,13 is applied across an integrated energy system covering demand from power, heat, and transport sectors (see Fig. 2.1), which enables the modelling of cost-optimal energy system transition pathways on high levels of geo-spatial (20 regions in Europe) and temporal (hourly) resolutions. The capability to model in an hourly resolution for an entire year allows for crucial insights to be uncovered, particularly with respect to storage and flexibility options. In order to reflect the versatility of solar PV, the model includes distributed PV rooftop systems and utility-scale PV installations, both using fixed tilted mounting structures and single-axis tracking technology, which is today frequently applied in sunny regions as it enables solar modules to follow the course of the sun in one direction, thus significantly increasing yield.

RESULTS

Integrated energy system transition across Europe Looking at the state of Europe’s energy system in 2019, we see a continent that is still in the early stages of its energy transition. To become climate-neutral by 2050, Europe must transition from today’s decoupled state of the power, heat, and transport sectors, largely based on non-renewable energy sources, towards an integrated energy system with renewable electricity at its core. This report assumes an increasing rate of sector coupling over the next 30 years, leading to a highly integrated energy sector by 2050, though with varying levels of efficiency gains across the three scenarios. In all three cases, the volution of European energy demand from 2020 to 2050 depends on several key factors: • The level of sector coupling between the power, heat, and transport sectors depends on the adoption of different technologies. The greater the amount of Power-to-X technologies (power to heat, fuel, gas) the higher the degree of sector coupling. • The rate of electrification in the heat and transport sectors depends on the adoption of heat pumps with electric heating, and a technological shift from ICE engines to electric powertrains. • The adoption rate of synthetic fuels (methane, hydrogen, and FT fuels) is primarily based on electricity and thus on the electrification level.

Primary Energy Demand In 2020, primary energy demand in Europe is covered to a large extent by fossil fuels with an estimated share of 86%, while the rate of renewable electricity is very small (for definitions of primary energy supply, demand, see Box 1, p. 28). As the energy system transitions toward larger shares of renewables over time and 100% for two of the scenarios by 2050, a strong electrification trend can be observed across all three scenarios (see Fig. 3.1). In the Laggard scenario, the energy sector reaches 51% electrification by 2050, while in the Moderate scenario, the energy sector is 85% electrified by 2050. In the Leadership scenario, rapid electrification of 85% is already achieved in 2040, and continues to increase beyond then. This enables Europe to become an exporter of renewable-based synthetic fuels once the 100% renewables level is reached as of 2040, adding to the primary energy demand and raising the level of electrification to 86% by 2050.

Power
The power sector is a shining example in the energy transition across Europe, with around 34% of electricity being generated by renewables in 2020. According to the modelling results, the growth of renewable energy continues across all scenarios, though in varying levels of installed capacities and electricity generation. Increased levels of electrification will lead to higher levels of renewable power generation and corresponding generation capacities for all scenarios, and the two pillars will be solar and wind. Already in the last few years, solar and wind were responsible for adding the largest volumes of all power generation sources in the EU-28; last year, solar overtook wind, adding nearly 17 GW, compared to 13 GW of wind. The modelling results of this report assume this trend will continue, but at a dramatically higher speed.

A fully integrated energy system depends on employing renewable electricity in the heat and transport sectors, in applications that today mostly rely on hydrocarbon fuels. While using direct electricity is a cost-efficient solution in a number of cases, it could prove difficult to completely replace fuel use in certain applications, such as high temperature industrial heating, aviation and maritime transport. Also, the current road fleet is largely based on ICE engine vehicles, and it will take some time to replace them with electric vehicles. To overcome this challenge, a variety of chemical processes were discovered in the twentieth century: various synthetic fuels with equivalent features to hydrocarbon fuels can be produced from just renewable electricity, water, and air. Hydrogen plays a crucial role as an energy carrier for the creation of synthetic fuels and chemicals. Sector coupling or energy system integration is considered by many experts as a key enabler to reduce GHG emissions in the European energy sector.20,21 Moreover, it can be a cost-efficient means of integrating the energy system by valuing synergy potentials and interlinkage between different uses, applications, and sectors. In this report, sector coupling includes the integrated use of different energy infrastructures and carriers, in particular electricity, heat, synthetic gas, and synthetic liquid fuels. This energy system is enabled both on the supply side (input), with the conversion of renewable electricity to heat, hydrogen, methane, and FT fuels, and on the demand side (output), with electrification of end-use and storage for cost effective management of energy use. Several studies13,21–24 show that sector coupling can lower the overall costs of the energy transition, which is validated by the results of this study.

REGIONAL AND SEASONAL VARIATIONS: FULL SECTOR COUPLING PROVIDES ENERGY SECURITY FOR EUROPE

Regional variation Europe is one of the most interconnected regions in the world, with robust energy infrastructure connecting the different member states. As far as renewable energy resources are concerned, Europe offers a good mix of significant wind potential in the northern and western regions (including the UK and Ireland), complemented with excellent solar potential in its southern regions. Other forms of renewable resources, such as hydro power and biomass, are also well distributed throughout the continent, which influence the regional energy mix of the various countries within Europe.

PV supplies an average of 61% in the Moderate scenario and 63% in the Leadership scenario. Wind energy, on the other hand, contributes an average of 33% in both the Moderate and the Leadership scenario. In both scenarios, solar PV and wind energy generate over 90% of the electricity needed across Europe by 2050. However, in line with larger installed capacities, the Leadership scenario leads to around 2,500 TWh more electricity generation.

EXECUTIVE SUMMARY In light of the European Commission’s 2050 climate neutrality vision for a European Green Deal to meet the Paris Agreement targets, SolarPower Europe and LUT University (LUT) developed a research project to better understand solar’s role in the European energy transition. While the share of solar in the EU’s electricity supply is currently less than 5%, the technology is the most versatile and often lowest-cost clean power generation source, with a rapid cost reduction trajectory. In 2019, more new solar capacity was installed in the European Union than any other power generation technology. The overall aim of the project was to present an assessment demonstrating the lowest cost feasible energy mix with the transitioning of the power, heat, and transport sectors towards an integrated energy system across Europe up to 2050. The project uses a novel technology-rich, multi-sectoral, multi-regional and cost optimal analysis, with a high spatial (20 sub regions) and temporal (hourly) resolution of energy transition pathways for Europe.

Source:100% Renewable Europe study – SolarPower Europe