By mid-century, Europe can become a net zero emissions continent thanks to carbon-neutral electricity. This is the message of ‘Decarbonisation Pathways’, a study conducted by Eurelectric with analytical support from McKinsey.

The study details how our industry vision of becoming carbon-neutral well before mid century can be turned into reality, while expanding the uptake of electricity in other sectors significantly to help them reduce their carbon footprint.

‘Decarbonisation pathways’analyses the implications of setting 2045 as the deadline for a fully carbon neutral power sector. This way, electricity becomes the preferred solution to decarbonise major emitting sectors such as transport, buildings and industry.

Tested against market and political realities, the study was conducted under the leadership of, and unanimously approved by, a steering committee. It counts all Eurelectric committee chairmen and the representatives of 14 major utilities across Europe. The project team consulted all relevant working groups of Eurelectric as well as external stakeholders, and the study was adopted in full consensus by the Board of Directors.

The study reveals that an accelerated timeline is technically feasible. Faster than previously assumed, Europe could benefit from an electricity system with higher output and where the bulk of electricity generation comes from renewables, nuclear and hydropower. However, it requires considerable investments.

Today, merely a fifth of energy consumption in transport, heating and industry is electrified. This, however, must increase significantly to achieve deep decarbonisation. 48-60 % electrification of the economy will translate into lower emissions, and increased energy efficiency. For instance, electric vehicles consume at least 25 % less energy than internal combustion engine cars, and electric heat pumps can be 4 to 5 times more performant than typical gas boilers.

Renewables as primary source

To get there, ‘Decarbonisation Pathways’ foresees that the electricity system will massively rely on renewables and nuclear. Renewables (i.e. wind, solar & hydro) will become the first source of electricity and deliver 80 % of all generated electricity by 2045.

Such a major uptake of mostly variable renewables will require serious adaptations and investment in transmission grids and flexibility sources.

In a high-renewables future, various sources of flexibility, both on the supply and demand side, will be needed to allow the system to remain reliable at all times. Conventional firm capacity will be complemented by new solutions to the hourly and seasonal variations of renewable generation. Those include power to gas and liquids, hydrogen, battery storage and demand side management and represent around 600 GW out of the required 1,300 GW of flexibility means. In the same way, electric vehicles will become one of the enablers of flexibility for short-term balancing. Through bi-directional charging systems, consumers will become essential actors of the power system, as they will have the possibility to send electricity from an electric vehicle to the grid or another source of storage.

The necessary investments in generation amount to 89–110 billion EUR per year. A similar amount will be required for grid investments. As a consequence, the electricity system will double its existing output and reach over 6,000 TWh. While the wholesale costs of electricity generation are expected to rise to 70–75 Euro by 2045, they would still remain 30 % lower than what the European Commission estimated in 2011.

This critical clean investment path will bring the European electricity sector to reduce its emissions by 95 %. To reach carbon neutrality, the system of tomorrow has to be characterised by significant innovation and scaling up of current immature technologies. Developing negative emissions technologies, such as biomass generation with carbon capture storage (CCS) or direct air capture, is essential to counterbalance the limited amount of fossil generation that will continue to be operational for system reliability. These technologies are expensive today, but without them, full decarbonisation will not be achieved.

Reaching carbon-neutrality by 2045 is definitely an ambitious objective. But, hiking up the speed and scale of such a major societal transformation will require the fast implementation of a number of enablers across society.

We will need to break the conventional silos and foster industrial cooperation. Deep cross-sector synergies and active engagement of consumers are a must. From authorities, to urban developers, electric utilities and citizens, every single actor will play an active role in defining the future energy systems.

We must ensure the development of future-proofed infrastructures. This will imply bolstering and digitisation of distribution grids and high transmission build, within and between regions, and will rely on the political determination to work towards more coordination and integration at European level.

Appropriate, technology-neutral market mechanisms and clear regulations will be needed to drive the investments in new and existing generation assets. These are not insignificant challenges. Nor insuperable.

Today, Europe is on the right track. It goes forward. It inspires. It drives the change. And our sector stands ready to power it with clean electricity.