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A Low Carbon Roadmap for Europe

This week the European Climate Foundation (ECF) launched its low-carbon roadmap for Europe – essentially a plan which details the pathway to an 80% emissions reduction by 2050. Long-term readers of this blog may recall a short piece I did back in July 2009 entitled “The Last 20%”, which looked at what an 80% reduction in emissions actually looks like (although for the USA, but the EU will be pretty much the same) – the key outcome being that society needs to rapidly electrify (e.g. for heating in the home) and that the power generation sector must head to zero or near zero emissions. The ECF study works from this basis as well and although it looks at the whole energy economy the introduction points out that the study is largely a power sector analysis.

 As has been the finding in many similar studies, four key directions must figure in the mix:

 One of the underlying data sources for the study is the well known McKinsey Abatement Curve.

 The authors are of the view that the pathways illustrated, although immensely challenging, are feasible. In particular, several mixes of power technologies are argued to be feasible, providing reliable power at all times at an economic price on average over the 2010-2050 period. The technologies include hydro; coal and gas plants with CCS; nuclear plants; wind turbines (onshore and offshore); solar PV and CSP; biomass plants; and geothermal plants. The supply mixes tested cover a share of renewable energy between 40 percent and 80 percent, a share of nuclear energy between 10 percent and 30 percent, and a share of fossil fuel plus CCS plants between 0 percent and 30 percent. A 100 percent renewable pathway is also evaluated, but not costed. All of the pathways require a shift in the approach to planning and operation of transmission systems.

 One potential challenge for policy makers will be to recognize that the power mix projections are scenarios and that ultimately the market will dictate the direction and final mix. In the EU the principal driving mechanism over the long term will be the EU-ETS and the carbon price that it has introduced into the energy system. However, a variety of other policy approaches will be required to augment this, such as some form of guarantee on nuclear acceptability and waste liability and early support for nascent technologies such as CCS and solar.

Surprising to me is the finding that this can be done with a resultant cost of electricity only 10-15% higher than the baseline, with that cost bridged by a CO2 price of more than €20 per ton (a 2008 McKinsey study showed that the long term deployment of CCS would require a CO2 price of some €40-60 per ton). However, the required efficiency improvements in electricity use are also an important factor and these also contribute to a lower overall cost of energy than in the baseline.  This then menas that final energy bills to end users will fall.  In reality it may be a challenge to make efficiency improvements stick if electricity bills do fall, and indeed they may stimulate further demand increases.

 It is no surprise that the study finds that all decarbonization pathways explored in Roadmap 2050 throw up profound implementation challenges. This rate of change seriously challenges the historic trends of change which I discussed back in December on the back of a Nature paper written by two Shell colleagues. When things have gone well, it has taken around 30 years to move from the first pilot plants outside the laboratory, to reach a ‘material’ scale, i.e. delivering about 1% of the world’s energy supply.  This still follows an exponential curve running at an average of 26% growth per year for those 30 years.  It is simply that it has to climb three orders of magnitude in scale. The question that clearly arises in all of this is whether we are fooling ourselves in thinking that such large scale deployment is even possible in just 40 years, or whether, as has been seen in some limited cases such as nuclear power in France, that sustained and determined policy implementation can deliver the necessary change.

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