On 13 May in Brussels EURELECTRIC launched the key messages from Power Choices Reloaded study. The study builds on Power Choices 2009, both using the PRIMES economic model developed by Professor Pantelis Capros at the University of Athens (also used by the European Commission for its 2050 Roadmaps). At the 13 May lunch event Professor Capros presented the main results, followed by a panel discussion among representatives of the European institutions, BusinessEurope, Eurogas, and the European Climate Foundation.
Power Choices 2009 helped EURELECTRIC and EU policymakers to understand how to deliver competitively priced, reliable, carbon-neutral electricity by 2050, together with electrification of demand-side energy use, within an integrated European energy market. It showed that this is achievable at a reasonable long-term total energy cost as part of an economy-wide decarbonisation trajectory. Power Choices 2009 also emphasised that, in order to achieve this objective, strong and immediate policy action was required to favour low-carbon technology choices through carbon and electricity markets.
Power Choices Reloaded 2013 re-examines the 2009 conclusions in light of significant changes: slow progress in the international climate negotiations, financial crisis and recession, low progress in European market integration and infrastructure development, rapid changes to national energy policies and global energy markets, different developments of technology costs than forecast.
Power Choices Reloaded shows that - sooner or later - the 2050 goal will require a major reform of the entitě European and national framework of low-carbon policies. But it also shows that until the current conflicting and contradictory signals are resolved, investors will avoid the European electricity market. Meanwhile, the delay while we wait for a policy signal poses a serious threat to security of supply and to the feasibility of meeting climate targets.
Crucially it puts at risk the goal of affordable energy.
This scenario is modelled as a “Lost Decade” in which policy signals are delayed until 2030. Professor Capros explained that over the period of 40 years, this scenario costs €4 trillion more than the optimised early polices scenario, or 2% of GDP annually, mainly due to supply-side lock in and delayed demand-side investment. These costs impact unevenly across Europe, affecting especially the newer Member States, and resulting in final consumers paying significantly higher amounts for purchasing energy products. The Lost Decade’s “crawl to 2030, then sprint to 2050” scenario gives results for the power sector which are clearly nonsensical: during 2030-35 the percentage of carbon-free generation (renewables, nuclear and CCS) must increase from 60% to over 80% during 2030-35 the average rate use of thermal generation declines from over 35% to only just above 15% during 2030-50 the load factor all power generation capacity decreases from over 40% to under 35%.
