By P. Capros, M. Kannavou, S. Evangelopoulou, A. Petropolos, P. Siskos, N. Tasios, G. Zazias and A. DeVita
In November 2016, the European Commission presented the ‘Clean Energy for all Europeans’, (i.e. ‘Winter package’), a set of measures to keep the European Union competitive as the clean energy transition is changing global energy markets. The package proposes policies in line with the 2030 targets agreed by the European Council in 2014 regarding GHG emissions reduction, renewable energy and energy efficiency.
The PRIMES model, developed by E3M, has been used to build the EU Reference Scenario 2016 and support the Impact Assessment studies that accompany the Winter Package [1-4]. Figure 1 shows schematically that individual parts of the Winter Package where the PRIMES model has been used and the various scenarios considered. In addition to the proposals included in the Winter Package, additional framework related to the decarbonisation of transport and the effort sharing amongst Member States towards the reduction of GHG emissions has also been proposed in the context of the targets set by the European Council. PRIMES was also used in those assessments.
PRIMES is a partial equilibrium modelling system that simulates an energy market equilibrium in the European Union and in each of its Member States. The model includes consistent EU carbon price trajectories. It proceeds in five-year steps and uses Eurostat data.
Several scenarios were considered. The main scenario, EUCO27 is in line 2014 European Council. It considers at least 40% cuts in greenhouse gas emissions (from 1990 levels), at least 27% share for renewable energy and at least 27% improvement in energy efficiency. Four variants to the EUCO27, considering different levels of energy efficiency improvements (30, 33, 35 and 40%) were also considered to assess the impact of the proposed legal framework on energy efficiency. Other scenarios related to the integration of Renewable Energy Sources (RES) and the functioning of the internal energy market were also developed and used to assess the various implications of the winter package.
All EUCO scenarios are decarbonisation scenarios, i.e. they are compatible with a 2oC trajectory and the EU INDC  submitted following the COP21 meeting in Paris in 2015. They achieve above 80% GHG emissions reduction in 2050 compared to 1990 levels, in line with the European Commission ‘Energy Roadmap 2050’.
The main elements of the EUCO27 and EUCO20 scenarios are shown in Figure 2:
Table 1 shows the main policies used for delivering the climate and energy targets in all scenarios.
|Increase of ETS linear factor to 2.2% for 2021-30 (2015/148 (COD)
|Market Stability Reserve (2014/0011/COD)
|RES-E policies: new guidelines for auctions
|Policies promoting the use of biofuels
|Support of RES in heating
|Energy efficiency of buildings: new EED, enhancement of article 7
|More stringent eco-design
|Support of heat pumps
|Best available techniques in industry
|CO2 car standards (70-75gCO2/km in 2030, 25 in 2050) and for Vans (120 in 2030, 60 in 2050)
|Efficiency standards (1.5% increase per year) for trucks
|Measures improving the efficiency of the transport system
The projections obtained through the various scenarios reveal the following:
(A) Impacts on GHG Emissions (EUCO27)
|The energy related CO2 emissions decrease primarily in the energy supply sectors, notably in the power sector, but also in the demand sectors.
The remaining non-abated emissions by 2050 are by order of magnitude due to the non-CO2 GHG, the residual use of oil in transport and various small scale uses of gas in the domestic sector and industry
The reductions of emissions in the sectors that participate in the Emissions Trading System (ETS) exceed those in the non-ETS sectors
The ETS drives strong emission reductions in the power sector and promotes the development of RES which benefit from learning-by-doing requiring low or no out-of-the-market support.
(B) RES penetration
Variable renewables (e.g. wind and solar)_ are expected to dominate the power generation sector. The projection shows variable RES capacity to more than double in 2030, from 2015 levels, and quadruple by 2050.
RES in heating and cooling also develop, albeit at a slower pace, driven by heat pumps and RES-based production of heat.
The biofuels in transport constitute the main growing market for bioenergy, as biofuels are essential for reducing emissions in non-electrified transport segments (the RES-T includes for electricity used in transport the RES used in power sector).
(C) Electricity supply mix
Due to the increased penetration of intermittent RES, gas-firing capacities acquire a strategic role for balancing and reserve, a role increasingly performed by storage technologies in the long term. Nuclear plant retrofitting is essential to maintain total nuclear capacity, as investment in new nuclear plants suffers from limitations (sites, financing, etc.).
Coal-firing generation is under strong decline with CCS not becoming a major option.
The model results confirm the importance of sharing balancing and reserve resources across the EU countries and the advantages of market coupling in the day-ahead, intra-day and real-time balancing. The scenarios assume minimization of costs over the pan-European market, which in the mid-term becomes fully integrated.
(D) Energy Efficiency
|(E) Renovation of houses and buildings, the Eco-design regulation, the application of the Best Available Technologies (BAT) in the industry are significant enablers to energy efficiency.
(F) Electricity consumption hardly increases until 2030. The energy efficiency improvement drives electricity savings in the short/medium term, and energy savings overall. Transport electrification and increased use of electricity for heat purposes add significant load, but only after 2030.
(G) Developments in the transport sector
Advanced car technologies (mainly plug-in hybrids and battery electric vehicles) dominate the car market as a result of the CO2 car standards, which continuously tighten.
The biofuels, mostly advanced lignocellulose-based fungible biofuels in the long term, get a significant market share in the non-electrified segments of the transport sector (trucks, ships, aircrafts).
(H) Investments and electricity prices
Investment expenditures are likely to rise considerably in the decade 2020-2030 and beyond.
The projections do not see significant pressures on electricity prices in the medium term, but prices are likely to considerably increase in the long term, mainly due to increasing costs of grids and system services.
Moderate increase in total costs relative to the Reference in EUCO27 and EUCO30. There’s considerable increase in investment in the demand sectors when the energy efficiency ambition increases. The induced technology progress can offset the increase in the energy costs in the long term. The investment expenditures are likely to rise considerably in the decade 2020-30, a crucial decade for the energy transition, also because of the necessity to extend power grids, upgrade power distribution, build vehicle recharging infrastructure and develop advanced biofuels.
The investment requirements in gas-fired plants are significant after 2025 and until 2050, in contrast to the continuous decrease in the rate of use. The investment in nuclear both for extension of lifetime and new plants is also significant. The investment outlook is dominated by the massive development of variable RES, notably wind and solar.
On average, the prices of electricity in the EUCO scenarios do not increase in 2030 compared to the Reference projection. The projections do not see significant pressures on electricity prices in the medium term. The electricity sector restructuring, the sharing of resources in the integrated EU market and the technology learning offset the impacts of ETS. The projection of rising electricity prices in the long term is mainly due to the increasing costs of grids, smart systems and system services. However, the prices increase significantly after 2030.
More information on the winter package scenarios is available online at https://ec.europa.eu/energy/en/data-analysis/energy-modelling
By Pantelis Capros, Professor in the School of Electrical and Computer Engineering, National Technical University of Athens and Director of the E3Mlab/ ICCS.
 European Commission (2016). http://eur-lex.europa.eu/resource.html?uri=cellar:923ae85f-5018-11e6-89bd-01aa75ed71a1.0002.02/DOC_1&format=PDF
 European Commission, COM(2016) 767 final/2, 0382 (COD) (2017) 1–116.
 European Commission, COM(2016) 761 final. http://ec.europa.eu/energy/sites/ener/files/documents/1_en_act_part1_v16.pdf.
 European Commission, Impact assessment on the revised rules for the electricity market, risk preparedness and ACER, Eur. Comm. Winter Packag. 5 (2016).
 The EU’s Intended Nationally Determined Contribution to the UNFCCC.