Europe’s power industry pledges total carbon neutrality by 2045. But is the network fit to deliver?
This article is part of the New DSO business models series.
The world is committed to decarbonization. Getting there will take a monumental shift from traditional centralized generation to decentralized renewable generation, greater focus on energy efficiency and strides toward electrification of transport, heat, buildings and industry to make it happen.
In 2015, almost 200 countries signed the Paris Agreement to limit the increase in global average temperatures this century to well below two degrees Celsius above pre-industrial levels. These are the levels at which scientists say climate change becomes dangerous and irreversible.
Meanwhile, the power sector is boldly predicting that decarbonization of electricity is possible in Europe by 2045. This ambitious objective necessitates, however, substantial investment, innovation in smart grid technology and new business models to improve the function of electricity distribution networks.
Transitioning the energy system
Already, thanks to technology innovations, the cost of small-scale, local distributed energy resources (DER) that connect to the network at a distribution level is coming down. And efficiency is going up.
More is expected as wind and solar photovoltaics (PV) become increasingly price competitive with conventional electricity sources, according to the International Energy Agency in its World Energy Outlook 2018 report. Battery costs are falling too, making energy storage solutions more affordable and system flexibility more attainable. InnoEnergy, Europe’s innovation engine for sustainable energy, forecasts that demand for batteries will grow exponentially over the next few years. Meanwhile, total electricity storage capacity could triple in energy terms by 2030.
In fact, from 30% today, renewable generation could meet over 80% of Europe’s future energy needs. The EU’s second Renewable Energy Directive, part of the “Clean Energy for All Europeans” package, has hastened action with a binding renewables target of 32% by 2030.
By 2045, onshore wind capacity is predicted to triple from current levels to over 640 GW, with offshore reaching 470 GW, finds industry body Eurelectric. In the meantime, solar PV capacity is set to increase seven-fold to 950 GW. Fossil electricity supply is being phased out, dropping to around 5% of total supply by 2045. The expectation is that Europe’s coal-fired generation capacity will be almost fully decommissioned.