European Climate Foundation (ECF) - Conclusion report: EU must double energy grid funding
Following its landmark Roadmap 2050 report, the ECF is proud to present the next phase:
Power Perspectives 2030 builds on the widely referenced Roadmap 2050: a practical guide to a prosperous low-carbon Europe, and provides an analysis of the next steps required in the development of the European power sector by 2030 in order to remain on track to full decarbonisation by 2050.
Based on extensive analysis conducted by the ECF, McKinsey, KEMA, Imperial College London, RAP and E3G, the study seeks to answer the question: "How do we overcome the challenges on the road to a robust zero-carbon power sector?"
The report shows that beyond the plans already set out for 2020, the decarbonisation process will need to accelerate. Hence, a stronger sense of direction is needed towards 2030 to support investments and enable power markets to deliver the transition to a zero-carbon power sector.
European Union nations must nearly double investment in power grid construction in the decade after 2020 if they are to get on the path to carbon-free electricity by mid-century.
The European Commission raised the goal of virtually emissions-free electricity in its 2050 road map towards a low-carbon economy, published earlier this year, as the means to achieve an 80%-95% cut in carbon emissions that scientists say is needed by then to stave off the worst effects of global warming.
"The European Union needs to establish a credible and adequate policy framework to ensure implementation of the current plans and to steer the decarbonisation of the power sector beyond 2020," says the ECF report.
To meet 2020 goals to cut carbon by 20% and increase the share of renewable energy to 20%, member states need to increase transmission lines by 14%, or 42,000 kilometers (26,097.6 miles), at a cost of €628 billion over this decade.
For the next 10 years, the cost climbs to €1.2 trillion, said the ECF's report – Power Perspectives 2030: On the Road to a Decarbonised Power Sector in Europe.
In what it labels an "on-track" scenario, based on the EU managing fully to implement its plans up to 2020 and projects in 2030 in line with targeted emissions cuts, it anticipates a power mix in 2030 made up of 50% renewable energy.
The rest would include 34% fossil fuels, plus a further 8% from carbon capture and storage, and 17% nuclear.
Perfecting the grid is crucial to optimising available renewable energy, which tends to be concentrated on the fringes of Europe.
Bonds for energy
The ever-steeper challenge could require innovative approaches, especially to financing: for instance, selling asset-backed bonds to institutional investors.
"There is a growing consensus within the financial community that new financing models will need to be found to finance this transition alongside existing approaches," the report said.
The Commission has confirmed plans to launch European project bonds as part of its infrastructure financing plans to the end of this decade.
While power grids require huge investments, gas infrastructure could be adequate until around 2040 – provided the planned investments to 2020 go ahead – as renewable power, rather than carbon-emitting gas provides the solution to emissions reduction.
Beyond 2030, the report finds gas can only be "a significant destination fuel" if commercially viable ways of reducing its carbon emissions are in place.
"To keep the CCS [carbon capture] option both for coal and gas installations, more needs to be done to drive technological development," the report said.
The ECF's report was researched in collaboration with Imperial College, London, consultants, Royal Dutch Shell and a range of utilities and technology manufacturers .