South East Europe electricity roadmap – modelling energy transition in the electricity sectors

ABSTRACT

One of the most important challenges for the South East Europe region will be replacing more than 30% of its presently installed fossil fuel generation capacity by the end of 2030, and more than 95% by 2050 if its age structure is considered. This requires a strong policy framework to incentivise new investments in a region currently lacking investors, but also presents an opportunity to shape the electricity sector over the long term according to the broader energy transition strategy of the EU and the Energy Community. The aim of this paper is to assess what type of long-term pathways exist for electricity sector development in the region if they follow the energy transition process of the EU. In this model-based scenario assessment, long term electricity sector futures are explored using a set of interlinked electricity models evaluating the level of renewable energy investment required in the region to reach a deep decarbonization target, assuming emission reduction above 94% by 2050 compared to 1990 in line with the long term market integration and climate policy goals of the EU. It also explores what are the most important system wide impacts of the high deployment of renewable energy concerning generation adequacy and security of supply.

Key policy insights

• Energy policies in the South East Europe (SEE) region, both at the national and regional level, should focus on enabling renewable energy integration, as this will be a key component of the future energy mix.

• EU and Energy Community policies should be incorporated into national energy planning to ensure that SEE countries embark on the energy transition process at an early stage.

• Stranded costs should be carefully considered in decision-making on new fossil-fuel generation and gas network investment in order to avoid lock-in to carbon intensive technologies.

• If consistent decarbonization policy prevails, with a significant and persistent CO2 price signal, the role of natural gas remains transitory in the region.

• The SEE region offers relatively cheap decarbonization options: the power sector can reduce GHG emissions above 94% by 2050 in the modelled scenarios.

KEYWORDS:

• Climate targets
• energy scenarios
• energy models
• transitions
• south east Europe

Disclosure statement

No potential conflict of interest was reported by the authors.

Notes

1 The Energy Community is an international organisation founded in 2005 with the key objective to extend the EU internal energy market rules and principles to countries in South East Europe, the Black Sea region and beyond on the basis of a legally binding framework.

2 SEERMAP is a research project dealing with the energy transition process of the electricity sector of the SEE region, financed by the Austrian Federal Ministry of Agriculture, Forestry, Environment and Water Management and the European Climate Foundation. www.seermap.rekk.hu

3 For PRIMES model references, see E3M Lab/NTUA & IIASA (2016) and E3M Lab (2017).

4 The impacts of the Large Combustion Plant BREF (Commission Implementing Decision of 2017/1442) are not taken into account in our modelling work, as it entered into force in July 2017.

5 For further details on the EGMM model, see Kiss, Selei, and Takácsné Tóth (2017).

6 For this calculation, assumptions were made with respect to the maximum availability of different technologies. Fossil fuel power plants were assumed to be available 95% of the time, and hydro storage 100% of the time. For other RES technologies historical availability data was used.

Additional information

Funding

This work was supported by Bundesministerium für Land- und Forstwirtschaft, Umwelt und Wasserwirtschaft [grant number B631009]; European Climate Foundation [grant number G-1605-56290].