The Open ENTRANCE project is now in its sprint to the finish line! Lots of activities are planned in the coming months, and the final deliverables will soon be published. Read on for all the details.
This workshop, especially designed for Members of the European Parliament, will provide them with valuable insight about the ongoing transition to a low-carbon European energy system, from the researchers behind the EU 2020 project Open ENTRANCE.
In this workshop, we will present an overview of the fundamental changes that the energy system must undergo, and the expected economic impacts of these changes. Open ENTRANCE also carried out nine case studies that assess novel energy technologies or solutions that can contribute to the transition. The three-hour workshop will consist of two sessions. The first will present an overview of the project followed by key policy-relevant takeaways that will address the pace and solutions required for an effective energy transition. This session is intended to be interactive, with discussions after each presentation and a 30-minute panel debate with industry leaders and members of the Parliament. The second session will dive deeper in the solutions and consequences presented in the first session, and follow up with a closer look into the potential the project sees for demand flexibility, controlled EV charging, hydrogen, independence from Russian gas, and energy storage.
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New report: D7.2. Macro-economic consequences of the energy transition
The mitigation of the increasingly visible events and consequences of global warming are one of the biggest challenges of humankind. At the same time, national governments feel the need to keep the economy healthy, thriving and just for its population. Global warming – as the word suggest – is a global problem and cannot singlehandedly be solved by individual countries. The Paris Agreements, following on the 2015 Climate Change conference, was a big step towards a low-carbon future. Countries could submit their national independent contribution (INDC), expressing in which way they aim at reducing greenhouse gas emissions and reduce the risk and impact of climate change (Zhang et al, 2021).
Still, the dialogue between policy makers, researchers and industry can be further improved. This deliverable aims at contributing to this challenge by giving insight in the different ways to get to a low carbon-emissions energy system in Europe. We present a comparative analysis of environmental and socio-economic impacts of recently developed decarbonization scenarios for the region until the year 2050 using two Computable General Equilibrium models, EXIOMOD and REMES-EU.
In the Open ENTRANCE project, four scenarios for decarbonization of the energy system have been developed (Hainsch et al, 2022). The scenarios are further described below. The scenarios have been translated in quantified model input for the macro-economic models. This input was partly provided by an energy system model-GENeSYS-MOD. This model provided for example the technology mix (e.g. wind, solar, hydro, etc) of the electricity sector, and the energy demand of non-energy producing sectors.
Both EXIOMOD and REMES-EU show strong declines in CO2 emissions, forced by the cap-and-trade system implemented in the EU. Furthermore, both models predict an exponential growth in ETS-price between 2040-2050. The last CO2 emissions are the costliest to prevent from emitting. In order to keep emissions below the cap on carbon, both models predict a steep increase in demand for electricity and a decline in demand for fossil-based energy sources. The effect of the decarbonisation scenarios on GDP is limited thanks to the technology advances assumed in each scenario, with the different sectors transitioning towards a cleaner energy mix. Feedback effects from climate on economy are included via decreasing labour productivity due to higher temperatures. This results in a lower expected GDP when the economy does not decarbonize fast enough. While most of the results are robust for the model choice, the models differ regarding the price mechanisms. EXIOMOD shows increasing prices of fossil fuels, which are driven by the existence and increase of the carbon budget. These high fossil fuel prices in turn result in decreasing demand for fossil fuels. REMES-EU shows on the other hand CO2 allowances supposed to be purchased alongside fossil fuels in proportion to the amount of emission that a particular fuel produces in a given sector. The increase in CO2 price due to the lower carbon budget over time, lead to a decrease in demand of fossil fuels which, in turn, lead to a decrease in price of the aforementioned fuels.
You can read the entire report titled Macro-economic impacts of the low-carbon transition on the Open ENTRANCE website.
New report D7.3: Policy Measures that Address Barriers and Market Failures in the Low-carbon Transition
This deliverable is concerned with identifying, discussing, and analysing the main barriers and incentives to investments in low-carbon solutions as well as the efficiency of possible policies to address the aforementioned barriers. It focuses on the description of the directions that could be considered to address the barriers and facilitate the transition to a low-carbon society. The analysis is performed starting from an individual viewpoint where the potential barriers related to the behaviour of the individuals are identified and discussed.
Then, the focus moves towards the analysis of the business dimension, where it concentrates on the potential barriers that could limit the proliferation of new business models related to flexibility and peer-to-peer solutions to the local management of energy consumption and production. Next, the attention shifts to the study of bigger aggregates considering both the technical aspects and the welfare-related aspects, where the focus is placed on understanding the impact of the widely used global least-cost solution on different countries and sectors involved in the transition process.
The analysis is carried out considering how the least-cost solution of a long-term energy system model suggests operating to decarbonize the entire European energy system and benchmark this suggestion with the actual possibility that a single country has to carry out the plans suggested by the model. Finally, an array of macroeconomic analyses of the effects of different types of barriers, from political to technological, is performed, as well as using the combination of a macroeconomic general equilibrium model and a long-term energy system model to understand which type of impact a decarbonization effort might have on the sectoral activities and on the economic growth of the European countries. The analysis is complemented with a survey investigating on stakeholders’ opinions about the impact of economic and regulatory aspects on the willingness to invest in low-carbon solutions.
The main results shed light on the fact that technological development is key to the transition towards low carbon solutions and that regulatory aspects need to support the uptake and diffusion of new technology and promote cooperation, rather than penalize players that have not yet caught up with the transition. This is further highlighted by the fact that calling off the decarbonization agreements by countries rich in fossil resources might bring economic benefits to those countries. This underlines how the decarbonization effort needs to be defined as a collective effort based on mutual help rather than on penalty mechanisms.
This report will be available one the Open ENTRANCE web page in February.
The Open ENTRANCE scenarios
The low-carbon transition scenarios we mention in the previous sections of this newsletter are one of the pillars of the Open ENTRANCE project. Three out of four of the scenarios comply with the (European fraction of the) 1.5°C global temperature increase limit. The fourth one approaches the 2.0°C target. The scenarios focus on combinations of a strong technological development, fierce climate policies or a motivated society as driving factors behind the decarbonisation. You can read more about Open ENTRANCE's low-carbon transition scenarios on the project website.
In the spring, the project will hold its final conference online, where the main results will be presented and discussed, and plans for using results beyond the project's lifetime will be outlined. The exact date of this conference will be announced soon.
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