Enhancing renewable energy system metrics

 

Introduction

Participatory approaches have been argued to bring a more diverse range of views into the ΙΑΜ process, by building a better understanding of the social context and supporting more inclusive decision-making. In IAM COMPACT, we have designed a Policy Response Mechanism (PRM), a co-creation process that facilitates collaboration among modelling teams and with stakeholders. The PRM dynamically responds to changing policy priorities, aiming for policy relevance, knowledge exchange, and enhanced trust, by providing different layers of inputs and making modelling socially/politically realistic. Stakeholder engagement in IAM COMPACT is organised into themes (for stakeholders within the EU) and regions (for stakeholders outside the EU). The themes and regions were collaboratively determined within the project, with Bruegel coordinating the process. For the themes, the aim was to have a broad enough coverage to capture a range of issues, but also sufficiently selective to lead a clear research agenda later in the project. This policy brief is part of the theme Optimal Transition, which investigates how to best manage the energy transition in Europe, through national and European climate and energy targets, decarbonisation of electricity generation, and electrification of energy services. 

Overall, 23 questions emerged from high-level exchanges with policy stakeholders (forming the Policy Steering Groups), which we grouped into proposals for seven modelling studies. These proposals were in turn grouped into four overreaching themes and discussed with a wider policy audience (forming the Core Working Groups) selected on geographical and sectoral criteria. The results of one of those studies is presented here, guided by the following research question: 

What are the different cost, energy security and resilience metrics and how do they compare for different scenarios? 

The consultative process helped us evaluate the relevance of policy issues, refine the scope of research questions, and establish a balanced group of stakeholders to participate. We conducted one workshop under each theme alongside the corresponding core working group to consult stakeholders on our scenario design and co-define desired outputs as well as a key set of joint input assumptions. During the workshop conducted under this theme, we sought feedback on the scenario design, inputs, and projections of two proposed modelling studies. The participating stakeholders, including representatives from the DG ENER, the Agency for the Cooperation of Energy Regulators (ACER), and the renewable energy industry, provided insights on the most policy relevant aspects of energy system security, resilience and flexibility. Suggestions were also offered to IAM COMPACT partners on specific metrics that could be used to assess model results along these criteria.  

Methods and key findings

To address the research question, the European energy system is modelled with the EnergyPLAN tool, a deterministic hourly simulation model for modelling of complete energy systems i.e., heating and cooling (including district energy solutions), electricity and gas grids, transportation, and infrastructure. Three scenarios for the EU are analysed and compared; the European Commission’s “Baseline 2050” and “1.5 Tech” scenarios based on PRIMES modelling, in addition to a 100% renewable “Smart Energy Europe” scenario. 

The scenario outputs from EnergyPLAN are then utilized, through the integrated assessment models MARIO and WILIAM, to further assess energy security and resilience, primary energy consumption and electricity generation, alongside upstream supply chain commodity linkages. Flexibility is explored through an assessment of peak electricity demands and residual electricity demands relative to dispatchable and variable generation capacity and the availability of energy storage. Resulting material demands and raw material prices for the different energy system scenarios are evaluated as an environmental effect. 

Several key findings emerge: 

  1. Firstly, it is feasible to construct 100% renewable energy system scenarios without relying on energy imports if this is a political priority. This finding arises from the Smart Energy Europe scenario. 

  1. The study demonstrates the need to expand the scope of scenario assessment criteria beyond cost and greenhouse gas optimisation, particularly by evaluating critical energy system dimensions like energy system security, resilience, and flexibility.  

  1. The design of future renewable energy systems must diligently consider the balancing of dispatchable and variable electricity generation and the available potential for flexible demands and energy storage. Hence, the transition to renewable energy systems necessitates a diversification of the energy system, both from an energy security, resilience, and flexibility perspective.  

  1. Finally, energy system scenarios for the EU should be discussed in terms of acceptable foreign energy and technology imports. This is critical for the development of future energy systems. This study found that renewable energy systems are less reliant on foreign supply chains than fossil-fuel-based energy systems. 

Scenario Design

Three different scenarios for the future energy system of the EU were developed and evaluated for this study. The scenarios are modelled in EnergyPLAN as an aggregated energy system, i.e., without any geographical distinction. The aggregated approach to system modelling allows for significant modelling of sector integration measures and energy technologies at an hourly temporal resolution but also means that network, transmission, and interconnection restrictions cannot be represented. The scenarios evaluated in this study were first presented in Thellufsen et al. 2023 for a comparison of the role of sector integration in the PRIMES “A Clean Planet for All” scenarios to a scenario developed based on Smart Energy System Principles.  

The scenarios included in this study are: 

  • “Baseline 2050”: Baseline 2050 was developed as part of the “A Clean Planet for All” strategy to reflect the EU decarbonization trajectory towards 2050 based on agreed and proposed policies by the Commission, reflecting macro-economic projections, fuel price projections, and technology assumptions.  

  • “1.5 Tech”: The 1.5 Tech scenario was also developed as part of the “A Clean Planet for All” strategy, representing a climate-neutral scenario and a pathway to stay within the 1.5°C ambition of the Paris Agreement. This requires significant electrification and deployment of e-fuels and hydrogen, carbon capture and storage solutions largely for bioenergy, alongside strong penetration of variable renewable electricity for a decarbonized power sector. 

  • “Smart Energy Europe”: Smart Energy Europe is developed as a 100% renewable energy system alternative based on the same technology catalogue as the PRIMES scenarios but designed according to Smart Energy System principles. Specifically, 1) energy efficiency first, 2) updated heating systems and expansion of district heating, 3) electrification of transport, 4) e-fuels for heavy parts of transport, 5) replacing remaining fossil fuel demands in industry and power generation (share that cannot be electrified) with biogas and biomass. 

The scenarios are evaluated considering energy system security, resilience, flexibility, costs and prices and environmental effects through different analyses.