The decarbonisation of the global electricity sector is crucial in order to achieve the climate change objectives of the Paris Agreement. The objective of this project is to investigate previously under-researched aspects of decarbonizing the German electricity sector in the European context and to derive an assessment of concrete policy instruments for both the German and the European level. In doing so, we extend existing analyses that focus solely on a coal phase-out in Germany by considering a wider geographical scope including other major carbon emitters in Europe. We also examine the consequences of climate policies for all fossil fuels, particularly natural gas. Trans- and interdisciplinary elements of this research project allow to better understand the different economic, technical, social, and political hurdles of the upcoming transformation away from fossil fuels in Europe.
Update on the project´s process
The TU Berlin contributes with two different strands to the project:
1) Political economy analysis of different low-carbon strategies in different European countries. Extensive case studies for Germany, UK and Poland were conducted, investigating reasons for the different developments and identifying main hurdles and drivers of coal phase-outs. doi.org/10.1016/j.eist.2020.09.001; doi.org/10.1016/j.enpol.2020.111621. For coal mining countries the biggest challenge lies within the needed adjustments for the affected regional economies. Nevertheless, targeted just transition policies can provide social security for workers and new economic opportunities for dependent regions.
2) Modeling a low carbon energy system for Europe. During the project soft-linkage exercises of GENESYS and dynELMOD were completed. Results show the amount of potentially stranded assets for coal- and gas-fueled power generation in Germany and Europe and expected shifts in electricity production centres. doi.org/10.1016/j.esr.2019.100422; doi.org/10.3390/en12152988.
DIW Berlin's focus in the FFF project is on the conversion of the energy system to fluctuating renewable energies. The work is divided into three complementary strands:
1) Overarching analyses: an overview article classified the role of electricity storage with increasing shares of renewable energies and their interaction of sector coupling (https://doi.org/10.1016/j.joule.2020.07.022). In addition, review articles on the economics of fluctuating renewables and electricity storage were prepared (https://arxiv.org/abs/2012.15371), which has since been accepted for publication in the journal Annual Reviews of Respurce Economics. In addition, a methodological paper on undesirable effects of implementing RES minimum shares on storage in energy models was prepared and presented at various conferences and seminars (still unpublished).
2) Concrete numerical analyses: using the open-source electricity sector model DIETER, a methodological contribution was developed to better represent the substitution of fossil fuels by renewables in macroeconomic models (https://www.diw.de/documents/publika-tionen/73/diw_01.c.795779.de/dp1885.pdf). In addition, the DIETER model was embedded in a Python environment, which allows better pre- and post-processing of the model data and more efficient scenario analyses. The new model was made available to the open source community as a Python package (https://pypi.org/project/dieterpy/), as well as via GitLab (https://gitlab.com/diw-evu/dieter_public/dieterpy), and described in a technical paper (https://arxiv.org/abs/2010.00883).
3) Empirical analyses on the socio-economic implications of energy infrastructures: here, using data from the socio-economic panel (SOEP), studies of the impact of bioenergy plants (discussion paper: www.diw.de/documents/publikationen/73/diw_01.c.809799.de/diw_sp1116.pdf) and of the expansion of the electricity transmission grid (still unpublished) on the life satisfaction of the local population were carried out."
PIK included technical aspects (e.g., negative emissions and representation of ETS industry sectors) and policy aspects (e.g., implementation of the Market Stability Reserve - MSR) in existing models.
Tightening the EU ETS target (−63% instead of −43% in 2030) speeds up transformation by 3–17 years. This does not only impact RES expansion, which reaches >70% by 2030, but also leads to almost complete coal phase-out by 2030 and gas phase-out by 2040 across Europe. These figures are reachable without CCS and nuclear power playing a major role, highlighting the feasibility of the new EU target. Although steep increase in vRES, hydrogen and batteries deployment is required, the additional financial burden of a more ambitious target is moderate (5% more than current scenario) despite carbon prices reaching 130 eur/t by 2030.
Preliminary results of the project
The graphical abstract from the paper "Tightening EU ETS targets in line with the European Green Deal: Impacts on the decarbonization of the EU power sector" summarizes the implications of a more ambitious ETS target (-63%, in line with the EU Green Deal) compared to those of the expected current target (-43%) by 2030.
- To be politically enforceable, coal reduction instruments must be combined with social & structural policy measures.
- Unilateral phase-out plans could contribute to national target achievement, but there is a risk that CO2 will merely be shifted under the EU-wide emissions trading scheme.
- Long-term electricity storage and flexible sector coupling are key components of future energy systems.
Brauers, H., Oei, P.-Y., Walk, P. (2020):
Comparing Coal Phase-out Pathways: The United Kingdom’s and Germany’s Diverging Transitions. Environmental Innovation and Societal Transitions 37: 238-53.
Gaete-Morales, C., Kittel, M., Roth, A., Schill, W.-P. (2021):
DIETERpy: A Python framework for the Dispatch and Investment Evaluation Tool with Endogenous Renewables. SoftwareX 15, 100784.
von Hirschhausen, C., Kemfert, C., Praeger, F (2021):
Fossil Natural Gas Exit – A New Narrative for the European Energy Transformation towards Decarbonization. Economics of Energy and Environmental Policy 10, 2, 115-131.
Kittel, M., Schill, W.-P. (2022):
Renewable Energy Targets and Unintended Storage Cycling: Implications for Energy Modeling. iScience 25 , 4, 104002.
Löffler, K., Burandt, T., Hainsch, K., Oei, P.-Y. (2019):
Modeling the Low-Carbon Transition of the European Energy System - A Quantitative Assessment of the Stranded Assets Problem. Energy Strategy Reviews 26.
Pietzcker, R.C., Osorio, S., Rodrigues, R. (2021):
Tightening EU ETS targets in line with the European Green Deal: Impacts on the decarbonization of the EU power sector. Appl. Energy 293, 116914.
Schill, W.-P. (2020):
Electricity storage and the renewable energy transition. Joule 4, 1-6.