Becoming climate neutral by 2050: How Europe’s energy system has to change

In light of climate change and the war in Ukraine, the European energy system faces an unprecedented transformation. How can this succeed?

Michael Jesberger is the COO of TransnetBW.

Let’s assume we are in 2050 and the Green Deal is a success. We are living in a climate-neutral Europe where renewable energy sources are ubiquitous. It is a fantastic vision – but to get there we need to start from today’s reality and make the greatest efforts. There is one goal and many possible paths to get there.

It is not a secret that the task would in any circumstance be a very challenging one. But the Russian invasion of Ukraine has shattered existing perceptions on the future of Europe’s energy system in a climate-neutral world and brought the challenges to a new level. Prior to the invasion, it was commonly accepted that Europe could support its transition by maintaining its external energy trading relations. This view is now obsolete. 

Climate neutrality combined with a resilient energy system – how can Europe achieve this goal? As an electricity transmission system operator, it is crucial for TransnetBW to understand the consequences of these decisions, plan ahead the design of the system and implement concrete projects in order to be able to reach those goals while ensuring security of supply. 

In our new study “Energy System 2050 – Towards a decarbonised Europe”, TransnetBW sheds light on the above question. We assume the European Green Deal as a given in 2050 and compare two central scenarios: “Global Markets” (GM), where hydrogen imports outside of Europe are expected, and “Energy Resilient Europe” (ERE), which considers a fully European hydrogen production. We highlight five crucial components which support the 2050 vision: renewable energy, grid infrastructure, sector coupling, hydrogen technology, and joint action at the European level.

Renewable energy: the power of a more independent Europe

The foundation for a climate-neutral energy system is the expansion of renewable energies in the electricity sector. Onshore and offshore wind turbines as well as rooftop and utility scale photovoltaics need to be expanded drastically. Our most cost-optimal path to reach the Green Deal goals considers that the installed wind power capacity needs to be expanded by up to 5.5 times in the EU27 countries as compared to today’s generation capacity. We therefore need an expansion rate of at least 23 to 27 GW per year from today to 2050. 

At the same time, the installed capacity of photovoltaic (PV) systems needs to increase by up to 17.8 times as compared to today’s installed capacity, with an expansion rate of at least 69 to 80 GW per year. This makes PV the most important energy source – supporting the importance of the EU’s Solar Strategy, recently released in combination with the REPowerEU plan. To achieve this goal, we need to start building this capacity now. All member states will need to accept to attribute important parts of their land to renewable generation.

As a result of the increasing electrification of the energy system and the expansion of renewable power plants, the energy transition will decrease the European energy dependence. Comparing our study results for 2050 with the 2020 values, we observe that the demand for oil is around 72 % lower and for gas it is between 63 % and 83 % lower, depending on the scenario. 

Grid infrastructure: because renewable energy must be transported to where it is needed

Generation and AC/DC grid expansion 2050 vs. 2030 [TransnetBW]

Renewable energy is rarely produced where it is consumed. So, this energy must be transported to where it is needed. Transmission grid infrastructure becomes key to transporting this green electricity over long distances. The grid infrastructure depicted in ENTSO-E’s most recent Ten-Year Network Development Plan is just the first step of the grid expansion requirement for a successful energy transition. Actually, the planned grid for 2035 will not meet the large transmission requirements of the 2050 goals in any of the countries considered by the study. The system will be critically affected by grid congestions throughout Europe and therefore the power supply system in 2050 requires further development of the transmission grid. In order to meet the electricity demand of a carbon-neutral market, the EU needs to expand the size of today’s electricity interconnection capacity by 2.8 times. Interestingly, this is true for both of our scenarios. This expansion will be accompanied by growing cross-border electricity trading, which will help put pressure on energy prices. France, the Netherlands, Poland and Spain will become the biggest net exporters while Germany and Italy will become the largest power importers.

Hydrogen: the crucial rise of a market and its infrastructure

Undoubtedly, hydrogen will play a major role in the climate-neutral energy system of 2050. It will be intensively used as energy carrier or feedstock in industrial processes and as a fuel for the transport sector. In addition, hydrogen will be used as input for the synthesis of hydrogen derivatives such as synthetic fuels. 

But where will the hydrogen production eventually take place? In our global market scenario, 57% of hydrogen production takes place in Europe (especially in Denmark, Poland Greece and the Netherlands) while the remaining 43% is imported from countries outside Europe via H2-pipelines. In the energy resilient Europe scenario, 100% of the hydrogen production is located in Europe – so no import would be necessary from outside the EU.

In contrast to electricity infrastructure, depending on the path taken, the necessary hydrogen infrastructure capacity in Europe differs quite starkly: If Europe is to become energy resilient, 46% more hydrogen interconnector capacity is required and 50% more electrolyser capacity needs to be built, when comparing to the Global Market scenario. To produce the additional hydrogen in Europe we also need 15% more renewable energy capacity.

In any case, the EU needs to build up a reliable hydrogen system almost from scratch. There is a long way to go. That’s why construction planning for a European hydrogen production and grid infrastructure has to start now.

Sector Coupling: because electricity must be thought of in a new way

The idea of “demand determines generation” no longer applies in an energy system with variable renewables. Temporal flexibility must therefore be guaranteed through storage and demand management in all connected sectors (electricity, heating, transportation or industry). Price volatility could be a key aspect to stimulate flexibility and efficiency and might thus be an important element to be considered in the current discussions of a market design fit for the future.

Joint action at the European Level: no country, company or technology alone will reach the Green Deal goals

For the 2050 vision to become reality, immediate action is as much necessary as pragmatic solutions to the obstacles that we are faced with. Most of the required technology is already available. What hinders the implementation of the energy transition are permits and local opposition. 

With its RePowerEU plan, the European Commission has shown the right way forward: We urgently need to push ahead with the expansion of renewables and the energy infrastructure as a whole. The goals are largely agreed upon and understood. Their rapid implementation, however, remains the biggest challenge. An important barrier to fast progress remains permit granting procedures. Here, the EU needs to pull together with its member states the regions and the municipalities. 

European climate neutrality is possible, but only achievable on time if it is done collectively, involving citizens in this inevitable transition, so that communities are proud to be part of the change, whether it is taking place on their rooftops or in their backyards.