What does Europe’s energy future look like?

In all possible scenarios, Europe will need to generate at least 70% more electricity than today, all of which will need to be climate neutral. We are also confident that many energy services will be provided directly using electricity.

Is there a role for synthetic fuels and hydrogen? 

Imported hydrogen and synthetic fuels can play a significant role. The advantage of synthetic fuels (hydrogen to a lesser extent) is that infrastructure and appliances will initially require less investment and their expensive production can largely happen outside the European Union but will result in higher prices.

What should policy do? 

Alongside the complimentary roles of carbon pricing and support policies, use of data is key. The quality, granularity and user-friendliness of the underlying data and analysis behind the transformation of Europe’s economy leaves much to be desired. An institution like the US Energy Information Administration or the International Energy Agency that provides a high-quality reference point for complex discussions is needed for an informed societal debate.

Ο Georg Zachmann είναι Senior Fellow στο Bruegel.

Decarbonisation of the energy system

Our analysis highlights that the current national energy and climate plans (NECPs) of EU countries are insufficient to achieve a cost-efficient pathway to EU-wide climate neutrality by 2050.

Three quarters of the European Union’s greenhouse gas emissions stem from burning coal, oil and natural gas to produce energy services, including heating for buildings, transportation and operation of machinery. The transition to climate neutrality means these services must be provided without associated emissions.

It is not possible today to determine tomorrow’s optimal clean energy system, largely because the cost, limitations and capability developments of competing technologies cannot be predicted. Energy systems with widely diverging shares of ‘green fuels’, in the form of electricity, hydrogen and synthetic hydrocarbons, remain conceivable. We find the overall cost of these systems to be of the same order of magnitude, but they involve larger investments at different stages of value chains. A large share of synthetic hydrocarbons would require more investment outside the EU, but less in domestic infrastructure and demand-side appliances, while electrification requires large investment in domestic infrastructure and appliances. Current projections show an overall cost advantage for direct electrification, but projections will evolve and critical players may push hard for alternative fuels. Policy will thus play a major role in shaping this balance.

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Πηγή: bruegel.org

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