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Joint Foreword

We are delighted to present to you the electricity and gas joint Scenario Report,

Jan Ingwersen

Jan Ingwersen
General Director ENTSOG

Laurent Schmitt

Laurent Schmitt
Secretary-General ENTSO-E

the second report of its kind to involve ENTSO-E and ­ENTSOG working closely together to develop three ­scenarios for Europe. Scenario work is the first important step to capture the interactions between the gas and ­electricity systems and is therefore paramount to deliver the best assessment of the infrastructure in a hybrid ­system. The joint work also provides a basis to allow assessment for the European Commission’s Projects of Common Interest (PCI) list for energy, as ENTSOG and ENTSO-E progress to develop their Ten-Year Network Development Plans (TYNDPs).

The outcomes of the work presented, illustrates the unique position of the gas and electricity TSOs to provide ­quantitative and qualitative output: In total almost 90 TSOs, covering more than 35 countries, contributed to the process. The combined expertise and modelling capabilities enabled ENTSO-E and ENTSOG’s joint working group to build a set of ambitious and technically robust scenarios.

Stakeholder collaboration and feedback has been an ­immensely important element of the process and will ­continue to be in future editions. The publication of the draft Scenario Report on 12 November 2019 was followed by an external Stakeholder Workshop on 5 December and an extensive public consultation. ENTSOG and ENTSO-E have finalised their Scenario Report considering the feedback and recommendations of more than 40 external stake­holders.

A core element of ENTSO-E and ENTSOG’s scenario building process has been the use of supply and demand data collected from both gas and electricity TSOs to build bottom-up scenarios. This approach is used for the National Trends Scenario, the central policy scenario of this report, recognising national and EU climate targets, notably the National Energy and Climate Plans (NECPs). In view of the 1.5°C target of the Paris Agreement, ENTSOs have also developed the Global Ambition and Distributed Energy Scenarios using a top-down approach with a full-energy perspective.

As ENTSO-E and ENTSOG look to the future, it is ­evident that innovation, integration and efficiency are key to meeting European energy consumers’ needs, whilst also achieving EU decarbonisation goals. Both gas and ­electricity networks connect countries and lead to ­regional and pan-European solidarity and economies of scale, while ensuring electricity and gas are delivered reliably to customers throughout the year, including peak demand situations. Both networks play a key role in supporting the uptake of new technologies and meeting decarbonisation challenges. Energy conversion projects must progress: Power-to-Gas, for example, allows electricity from renewables to be transformed into renewable gases, to be stored and transported via the gas infrastructure.

Integration of the electricity and gas sector can optimise the assessment and usage of both grids, whilst continuing to meet the European energy policy objectives of sustainability, security of supply and competitiveness. A hybrid energy infrastructure – consisting of a system of interconnected electricity and gas systems – as cross-border energy carriers will result in flexibility, storage and security of supply.

The integrity of the network development process is reliant on a comprehensive, reliable and contrasted set of possible energy futures – the collaborative efforts of ENTSO-E and ENTSOG, energy industries, NGOs, National Regulatory Authorities and Member States have shown the commitment to ensure this is the case. The development of the Scenarios outlined in this report will allow the TYNDPs to perform a sound assessment of European infrastructure ­requirements. We look forward to working with you again as we follow the next important steps in the TYNDP ­process.

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TYNDP 2020 – Scenario Report

  1. Introduction
  2. Purpose of the scenario report
  3. Highlights
  4. Special Focus: Pathways towards a decarbonised economy
  5. Scenario description and storylines
  6. Scenario Results
  7. Electricity Costs
  8. Benchmarking
  9. Fuel Commodities and Carbon Prices
  10. Stakeholder feedback and how it shaped the scenarios
  11. Improvements in 2020 Scenarios
  12. Next Steps
  13. Glossary
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TYNDP 2020 – Scenario Building Guidelines

Download Scenario Building Guidelines
1

Introduction

What is this report about?

The TYNDP 2020 Final Scenario Report describes possible European energy futures up to 2050. Scenarios are not forecasts; they set out a range of possible futures used by the ENTSO-E and ENTSOG to test future electricity and gas infrastructure needs and projects.

The scenarios are ambitious as they deliver a low carbon energy system for Europe by 2050. ENTSO-E and ENTSOG have developed credible scenarios that are guided by technically sound pathways, while reflecting country by country specifics, so that a pan European low carbon future is achieved.

Forward-looking scenarios to study the future of gas and electricity

Regulation (EU) 347/2013 requires that the ENTSO-E and ENTSOG use scenarios for their respective Ten-Year Network Development Plans (TYNDPs) 2020. ENTSO-E use scenarios to assess electricity security of supply for the ENTSO-E Mid-Term Adequacy Forecast (MAF).

All scenarios head towards a decarbonised future and have been designed to reduce GHG emissions in line with EU targets for 2030 or the United Nations Climate Change Conference 2015 (COP21) Paris Agreement objective of keeping temperature rise below 1.5°C.

Why do ENTSOG and ENTSO-E build scenarios together?

The joint scenario report is a basis towards an interlinked model of ENTSO-E and ENTSOG. TYNDP 2018 was the first time ENTSOG and ENTSO-E cooperated jointly on scenario development. There are strong synergies and co-dependency between gas and electricity infrastructures, it is increasingly important to understand the impacts as European policy seeks to deliver a carbon-neutral energy system by 2050.

Joint scenarios allow ENTSOG and ENTSO-E to assess future infrastructure needs and projects against the same future outlooks. The outcomes from the joint scenarios provide decision makers with better information, as they seek to make informed choices that will benefit all European consumers. Combining the efforts from gas and electricity TSOs give ENTSOG and ENTSO-E an opportunity to tap into cross-sectoral knowledge and expertise that would otherwise be missing. Joint working provides access to a broader range of stakeholders who are actively participating in the energy sector.

First step towards the 2020 edition of electricity and gas TYNDPs

The joint scenario building process has three storylines for TYNDP 2020. National Trends is the central policy scenario of this report, designed to reflect the most recent EU member state National Energy and Climate Plans (NECP), submitted to the EC in line with the requirement to meet current European 2030 energy strategy targets. National Trends represents a policy scenario used in the infrastructure assessment phase of ENTSOG’s and ­ENTSO-E’s respective Ten-Year Network Development Plans (TYNDP) 2020, with a more in-depth analysis as compared to the other scenarios.

In addition, ENTSO-E and ENTSOG have created two scenarios in line with the COP21 targets (Distributed Energy and Global Ambition) with the objective to understand the impact on infrastructure needs against different pathways reducing EU-28 emissions to net-zero by 2050. The three scenario storylines developed in consultation with stakeholders are detailed extensively in ENTSOG and ENTSO-E Storylines Report1 released in May 2019. Distributed Energy has been further adapted on the 2040–2050 time horizon taking into account stakeholder feedback and to ensure higher differentiation with the other COP21 Scenario, Global Ambition.

Methodology in detail

The development of the scenarios builds on storylines and a methodology to translate the storylines into parameters and eventually figures. The TYNDP 2020 Scenario Building Guidelines3 provides full transparency on how the scenarios are elaborated and how the development of different demand technologies, generation and conversion capacities, renewable shares and all other parameters are considered.

Learn more
2

Purpose of the scenario report

What is the purpose of the scenarios and how should they be used?

As outlined in Regulation (EU) 347/2013, ENTSOG and ENTSO-E are required to use scenarios as the basis for the official Ten Year Network Development Plans (created every two years by ENTSO-E and ENTSO-G) and for the calculation of the cost-benefit analysis (CBA) used to determine EU funding for electricity and gas infrastructure Projects of Common Interest (PCI). The scenarios were designed specifically for this purpose. Where possible, they have been derived from official EU and member-state data sources, and are intended to provide an impartial quantitative basis for infrastructure investment planning.

The scenarios are intended to project the long-term energy demand and supply for ENTSO-G’s and ENTSO-E’s Ten Year Network Development Plan development within the context of the ongoing Energy Transition. They are designed in such a way that they specifically explore those uncertainties which are relevant for gas and electricity infrastructure development. As such, they primarily focus on aspects which determine the infrastructure utilisation. Furthermore, the scenarios draw extensively on the current political and economic consensus and attempt to follow a logical trajectory to achieve future energy and climate targets.

The scenarios should provide the user with insight into the energy system of the future and the role of electricity and gas carriers in this energy system. Users are able to determine the effects of changes in supply and demand on the energy system. The European and global perspectives for these scenarios enable the user to track supply and demand developments geographically as well as temporally and to gain greater insight into the challenges facing energy infrastructure during the Energy Transition.

What isn’t the purpose of the scenarios?

The Working Group Scenario Building has gone to great lengths to build on the 2020 Scenario Report and to increase its ambitions, especially in considering external factors such as the Energy Transition and the decarbonisation of the European energy system on energy infrastructure. Nonetheless, it is important to recognise that the scope of these scenarios remains focused on providing sufficient input data to model future infrastructure needs.

The Working Group Scenario Building have sought to avoid making political statements with these scenarios and, as far as possible, to anchor key parameters in widely accepted data and assumptions. The National Trends scenario exists within an input framework provided by official data sets (such as PRIMES) and official energy policies (the NECPs of the EU member states). The goal of the Working Group Scenario Building has been to maintain a neutral perspective to these inputs.

While the top-down scenarios have greater room for innovation to meet more ambitious decarbonisation of the Energy system up to 2050, it is not the intention of the Working Group Scenario Building to use these scenarios to push political agendas attached to the use or non-use of specific energy carriers or technologies. The main focus of the TYNDP Scenario Report is the long-term development of energy infrastructure. As such, the differences between the two top-down scenarios (Global Ambition and Distributed Energy) are predominantly related to possible variations in demand and supply patterns.

To this end, all the scenarios in the TYNDP 2020 Scenario Report remain technology and energy-carrier neutral. The energy mix deployed in each of these scenarios has been designed to reflect a broad consensus within the energy industry and correlates to a large extent with official literature – most prominently with the EU’s own Long-Term Strategy scenarios.

Where the scenarios have incorporated parameters defined by external analysis (such as the calculation of a carbon budget by Climate Action Network Europe or the Biomethane Tool designed with the support of Navigant), the external analysis conforms to the widely accepted understanding of these topics.

The TYNDP 2020 Scenario Report attempts to reflect the Energy Transition and the decarbonisation efforts of the European energy system in its scenarios. This is incorporated by the use of the COP21 Agreement (in the form of a carbon budget calculation) as one of the key input parameters for the top-down scenarios. However, it is important to recognize that it is beyond the scope (and indeed the resources) of the Working Group Scenario Building to analyse political, environmental and indeed societal developments on the widest scale.

Above all it is important to recognize the fast-moving nature of the Energy Transition in Europe. The Working Group Scenario Building recognises the reality that some of the input parameters used in the creation of these scenarios may well need to be adjusted in the months and years to come as the energy policy of the EU and its member states evolves to meet the challenges of climate change. We take this opportunity to remind the reader that the TYNDP Scenario Building Process is an iterative process and it continues to evolve based on external influences. A scenario is a picture of the future; however, it is also a reflection of the present knowledge and the foreseeable challenges face today.

3

Highlights

1

To comply with the 1.5°C targets of the Paris Agreement, carbon neutrality must be achieved by 2040 in the electricity sector and by 2050 in all sectors together. Additional measures to reach net negative emissions after 2050 are necessary.
2

To achieve net-zero emissions, innovation in new and existing technologies is required to:

— reduce the levelised cost of energy from renewable energy sources
— increase the efficiency and type of end user appliances
— support renewable and decarbonised gas4
— develop technologies that will support negative emissions

3

“Quick wins” are essential to reduce global temperature warming. A coal to gas switch in the power sector can save at least 85 MtCO₂ by 2025.
4

To optimise conversions, the direct use of electricity is an important option – resulting in progressive electrification throughout all scenarios. Gas will continue to play an important role in sectors such as feedstock in non-energy uses, high-temperature processes, transport or in hybrid heating solutions to make optimal use of both infrastructures.
5

To move towards a low carbon energy system, significant investment in gas and electricity renewable technologies is required. Further expansion of cross border transfer capacity between markets will contribute to ensuring renewable resources are efficiently distributed and dispatched in the European electricity market.
6

Wind and solar energy will play an important role in the European energy system, however, the scenarios point out that the decarbonisation of gas will have a significant part to play as well. The scenarios show that the decarbonisation of the gas carrier is necessary, employing technologies to increase the share of renewable gases, such as bio-methane and Power-to-Gas, and decarbonised gases associated with Carbon Capture and Storage (CCS).
7

At present gas as an energy carrier is mainly based on methane, as the main component of natural gas. However, in the longer-term hydrogen could become an equally important energy carrier towards full decarbonisation of the gas carriers in 2050.
8

Sector Coupling enables a link between energy carriers and sectors, thus it becomes key in contributing to achieve the decarbonisation target. In the long-term, Power-to-Gas and Power-to-Liquid will play a key role in both the integration of electricity from variable renewables and decarbonising the supply of gas and liquid fuels. This would require close to 800 GW of dedicated wind and solar5  in 2050. Gas-fired power plants will continue to provide peak power flexibility to support an energy mix based on increasingly variable electricity generation.
9

Today, the EU28 imports most of its primary energy (ca. 55 %6). Decarbonisation will also change this pattern. In a way, the “insourcing” of energy production will reduce the import dependency to ca. 20 % to 36 %. However, imports remain an important vector in the future energy supply making use of competitive natural resources outside the EU territory. For gas in particular, import shares increase in all scenarios until 2030 due to the declining natural gas production in the EU.

4 Decarbonised gas is natural gas for which the carbon dioxide is removed by pre- or post-combustion carbon capture and storage (CCS) technology. Renewable gas on the other hand originates from renewable sources. For example, biomethane produced from organic material or hydrogen/synthetic methane from electrolysis (P2G). More information definitions can be found in the glossary or in the methodology report.

5According to the P2G and P2L modelling approach, the dedicated wind and solar is simulated outside the integrated electricity system.

6See EUROSTAT