Energy Policy 134 (2019) 110960

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Energy Policy
journal homepage: www.elsevier.com/locate/enpol

Energy-system modelling of the EU strategy towards climate-neutrality☆ T

a,∗ a a a
Pantelis Capros , Georgios Zazias , Stavroula Evangelopoulou , Maria Kannavou ,
Theofano Fotioua, Pelopidas Siskosa, Alessia De Vitaa, Konstantinos Sakellarisb
a
E3MLab, National Technical University of Athens, Greece
b
European Commission, Brussels, Belgium

ARTICLE INFO ABSTRACT

Keywords: We extend and use the PRIMES energy model to explore pathways towards climate-neutrality in the EU by 2050
Decarbonisation and 2070 and analyse implications on energy demand, supply and costs. We draw on the modelling, data and
Climate neutrality scenario framework developed by the authors to support the European Commission's “Clean Planet for All”
Energy system modelling communication, released in November 2018. Based on model results for numerous scenarios and sensitivity runs,
EU energy policy
we analyse key issues to explore feasibility, uncertainties, costs and priorities for climate-neutrality strategy. We
Sectoral integration
suggest that a sustainable climate-neutral energy system in the EU is feasible using known technologies. We
Renewables and energy efficiency
emphasise that the EU's climate and energy package for 2030 currently in legislation is not sufficient to ensure
climate neutrality by 2050. We characterise as of “no-regret” options promoting energy efficiency, renewables
and electrification where cost-effective. However, carbon neutrality also necessitates alternative options of
“disruptive” nature. Technologies supporting the disruptive options are not yet mature in industry. High un-
certainty surrounds their learning potential. Their deployment heavily depends on policies facilitating invest-
ment. The system analysis based on the model illustrates the importance of sectoral integration. We argue that
hydrogen, and at a certain extent synthetic carbon-neutral hydrocarbons, are critical elements among the dis-
ruptive options.

1. Introduction emission allowances.

In the context of the COP21 meeting in Paris in December 2015, the
European Union committed itself1 to limit GHG emissions as low as
required to stay below a 2 °C rise in average global temperature. The EU
has recently adopted (proposed by the European Commission in No-
vember 2016) an ambitious policy package entitled “Clean Energy for
all Europeans”.2 The adopted climate and energy targets include GHG
emission reductions (40–45% less than 1990 levels), energy efficiency
(32.5% less primary and final energy than projected in 2007 before the
economic crisis) and renewable energy (32% as a share of gross final
energy consumption) in the year 2030. The policy measures include
several sectoral Directives for energy efficiency, renewables and the
electricity market, as well as a reform of the Emission Trading Scheme
(ETS),3 enhanced by the recent adoption of the Market Stability Reserve
(MSR),4 which has already led to a significant rise in the prices of CO2
The EU has officially adopted a target of GHG emissions reduction
of at least 80% by 2050, below 1990 levels. The Paris Agreement, on
the other hand, mentions explicitly that best efforts should be made to
limit the global temperature rise to 1.5 °C, with a GHG emissions phase
out around 2050, that is, much earlier than considered for the 2 °C
strategy (see Rogelj et al., 2015; Rogelj et al., 2018; Kriegler et al.,
2018; van Vuuren et al., 2018). For this purpose, the European Com-
mission proposed in November 2019 a long-term strategy, which in-
cludes scenarios targeting emissions reduction in 2050 at 95% GHG and
more. Therefore, possible ways to reach climate-neutrality in the EU
energy system came up on the policy agenda.
Given the abovementioned considerations, a series of questions
arise that this paper seeks to address:
Can the 2030 climate and energy framework deliver a decarbonised

☆
The authors acknowledge funding by the European Commission (EC) and declare that the paper reflects strictly personal opinions.
∗
Corresponding author.
E-mail address: kapros@central.ntua.gr (P. Capros).
1
https://ec.europa.eu/clima/sites/clima/files/docs/2015030601_eu_indc_en.pdf.
2
https://ec.europa.eu/energy/en/topics/energy-strategy-and-energy-union/clean-energy-all-europeans.
3
https://ec.europa.eu/clima/policies/ets_en.
4
https://ec.europa.eu/clima/policies/ets/reform_en.

https://doi.org/10.1016/j.enpol.2019.110960
Received 28 March 2019; Received in revised form 17 July 2019; Accepted 26 August 2019
0301-4215/ © 2019 Elsevier Ltd. All rights reserved.
P. Capros, et al.
economy in the long term?
Is climate-neutrality by 2050 in the EU viable and sustainable in the
long run?
Is it possible to reach carbon-neutrality solely with conventional
fuels and technologies?
If not, what elements to promote in addition to conventional policies
and technologies?
Is carbon-neutrality affordable?
We provide answers to the questions drawing from the PRIMES
model5 results for a large number of scenario projections of the EU
energy system quantified up to 2070. The projections formed part of the
analytical material6 prepared by the authors to inform the European
Commission's long-term strategy entitled “A Clean Planet for All”, re-
leased in November 2018.7
The views reflected in this paper are solely the ones of the authors.
Moreover, the figures presented in the paper might slightly defer from
the results published by the EC in the in-depth report accompanying the
“A Clean Planet for All” communication.
Section 2 presents the concepts and data sources regarding the lit-
erature, while section 3 showcases the methodological approach. Sec-
tion 4 presents the quantitative results and section 5 concludes the
paper.
2. Concepts, data sources and review of literature
“Climate-neutrality” is equivalent to the net phase-out of all GHG
emissions (Höhne et al., 2015). “GHG-neutrality” has the same
meaning, although it is more specific than climate-neutrality. “Carbon
neutrality” is a similar concept but only for CO2 emissions. Climate-
neutrality of a fuel or energy vector implies zero GHG emissions over its
entire lifecycle, considering that carbon sinks are naturally occurring
during the formation of the raw feedstock used for its production.
“GHG-” or “Climate-neutrality” refers to a sum of different emission
categories, including emissions related to energy, industrial processes
and non-CO2 GHG emissions. In the present paper, we do not analyse
non-CO2 emissions.
Typical previous studies using the same modelling method can be
found in Capros et al. (2014a and 2014b). A summary of the model-
based assessment of the EU policy package for 2030 can be found in
Capros et al. (2018). Fragkos et al. (2017) present an assessment of the
EU INDC submission to the Paris Agreement based on the same mod-
elling framework. All the scenarios presented so far dealt with the 80%
emissions reduction objective for 2050; hence are not compatible with
the upper range of the ambition of the Paris Agreement, which suggests
that the EU should be a climate-neutral economy by 2050, and sustain
this for the period afterwards. Modelling climate scenarios is not a mere
upscaling of existing scenarios targeting an 80% reduction. We argue in
this paper that the gap between an 80% emissions reduction scenario
and a climate-neutrality scenario cannot be bridged without disruptive
solutions. The challenge is to model the disruptive alternatives, which
has been the aim of the enhancements of the PRIMES model.
Studies quantifying energy system restructuring to reach carbon-
neutrality are rare in the literature. We have only identified Pöyry
(2018), that follows an aggregated approach for the EU as a whole,
Navigant (2018), that deals with the global energy system also in an
aggregated way, Matthes et al. (2018), that apply a bottom-up approach
for the EU modelled as a single region, and Van Soest et al. (2018), that
applies an integrated assessment model for the global economy. Energy
5
https://ec.europa.eu/clima/policies/strategies/analysis/models_en#
Models.
6
https://ec.europa.eu/clima/sites/clima/files/docs/pages/com_2018_733_
analysis_in_support_en_0.pdf.
7
https://ec.europa.eu/clima/policies/strategies/2050_en.
2
Energy Policy 134 (2019) 110960
systems analyses for the EU reaching climate-neutrality in 2050, with
sector-wide and country-wide details, have not been reported in the
literature so far. The present paper aims at covering this gap.
However, zero GHG emissions have been the subject of several
sectoral studies. Some examples are Brand et al. (2012) for the trans-
port sector, Wang et al. (2018) for buildings, Dahal et al. (2018) and
Nevens and Roorda (2014) for cities, as well as Seljom and Rosenberg
(2018) for Scandinavia. Several studies have also focused on the role of
specific energy carriers in assisting climate neutrality, such as Navigant
(2019) for gas, Blanco et al. (2018a) and Rau et al. (2018) for hydrogen,
Blanco et al. (2018b) for power-to-methane, Malins (2017) and
Siegemund et al. (2017) for electro-fuels, Haszeldine et al. (2018) for
negative emission technologies, ADEME (2018) for renewable gas and
IRENA (2019) for renewables.
Our detailed modelling approach heavily depends on technical and
economic data for energy technologies in all demand and supply sec-
tors, and in particular for technologies that are not yet mature. The
uncertainty mainly concerns the learning potential. We drew such data
from a large consultation of industrial stakeholders performed in 2018
(see De Vita et al., 2018). We also used data from the literature. For
hydrogen, we have used Albrecht et al. (2015), Schmidt et al. (2017a)
and Dincer and Acar (2017). The alternative technology, i.e. hydrogen
from steam reforming of natural gas with carbon capture and storage
(CCS), has limitations due to the underground storage of CO2, see van
Cappellen et al. (2018). For synthetic fuel technologies we have used
Albrecht Friedemann et al. (2017), Alenazey et al. (2015), Götz et al.
(2016), Grond et al. (2013), Haarlemmer et al. (2014), Herz et al.
(2018), Pérez-Fortes et al. (2016), Klein et al. (2017), De Jong et al.
(2017), Eveloy and Gebreegziabher (2018), Schmidt et al. (2016a) and
Malins (2017). Among others, Perner et al. (2018) provide a compre-
hensive dataset of technical and economic features of technologies
producing hydrogen and synthetic hydrocarbons.
A general agreement in this literature is that the technologies pro-
ducing climate-neutral fuels do have great learning potential. However,
their costs are heavily depending on the costs of electricity, which is the
main input of water electrolysis. We argue in this paper that the synergy
between chemical storage and renewables can drive electricity costs
down. Papers that address integration of chemical storage in the power
system and other sectoral integration opportunities (e.g. transport) in-
clude Al Rafea (2017), Blanco and Faaij (2018), Koytsoumpa et al.
(2018, 2016), Schmidt et al. (2017b), Vandewalle et al. (2015)
Maroufmashat and Fowler (2017) and Vanhoudt et al. (2016). Bataille
et al. (2018) and Davis et al. (2018) arrive to similar conclusions to
ours, regarding the need to combine several options, including elec-
trification, hydrogen, synthetic fuels and biofuels, to achieve climate
neutrality.
Climate neutrality in power generation depends on the successful
integration of variable renewables (VRES). The relevant literature is
growing fast, and the modelling of the electricity system has increased
in sophistication. Our modelling framework for the power sector also
applies a highly sophisticated approach and relies on a vast similar
literature reviewed by Ringkjøb Hans-Kristian et al. (2018). To account
for the variability of renewables, the power model needs high seg-
mentation in time slices and the modelling of flexibility resources of
various types; such examples are Kannelopoulos and Blanco (2019),
Schlachtberger et al. (2017), Van Stiphout et al. (2017), Vijay et al.
(2017), Villar et al. (2018) and Wilson (2017).
Climate-neutrality of alternative fuels requires using captured
carbon dioxide. We have consulted the literature to collect data on
capturing CO2 from the air and biogenic sources; see Heidel et al.
(2011), Ishimoto et al. (2017), Ericsson (2017) and Naims (2016).
Biofuels will have to be fully fungible to mineral oil fuels, and their
prospects depend on not yet mature conversion technologies, see
Dietrich et al. (2018), Dimitriou et al. (2018), among others. Negative
GHG emissions may be necessary for some of the climate neutral sce-
narios; examples of recent literature are Haszeldine et al. (2018) and
P. Capros, et al. Energy Policy 134 (2019) 110960

Table 1
Scenario definition a.
Scenarios GHG target 2050 (wrt 1990) Main feature Transport sector targets

Baseline No Business as usual in 2030-2050, after having achieved the 2030 policy package of the EU
ELEC at least −80% Focus on electrification of all end-uses at least −60% CO2 (wrt 2005)
H2 at least −80% Focus on the role of hydrogen as an energy carrier at least −60% CO2 (wrt 2005)
P2X at least −80% Emergence of carbon-neutral hydrocarbons at least −60% CO2 (wrt 2005)
EE at least −80% Focus on energy efficiency savings at least −60% CO2 (wrt 2005)
CIRC at least −80% Introduction of circular economy concepts and emphasis on bio-energy carriers at least −60% CO2 (wrt 2005)
COMBO at least −80% Combination of ELEC, H2, P2X and EE at least −60% CO2 (wrt 2005)
1.5TECH Climate neutrality Same as COMBO but more ambitious decarbonisation Minimum use of fossil fuels
1.5LIFE Climate neutrality Same as COMBO plus CIRC and more ambitious decarbonisation Minimum use of fossil fuels

a
Climate neutrality – net zero GHG emissions – are achieved when the LULUCF sink is accounted.

Rau et al. (2018).
As far as energy demand is concerned, the modelling framework
includes detailed representations of the buildings, the industrial sectors
and transport. Electrification is one of the no-regret options, as long as
it is cost-effective; see Van Delft and de Kler (2017), Siskos et al. (2015),
Thiel et al. (2016) and Heinen et al. (2016). The scenarios explore
different competition cases between electrification, hydrogen and other
alternative fuels in the transport and heat sectors. Similar topics in the
literature are explored by Schmidt et al. (2016b) and Siskos and Capros
(2015), among many others.
The presence of new process technologies in industry, the capturing
and use of carbon dioxide (CCU), as well as the direct use of hydrogen,
constitute ways of restructuring industry towards a climate-neutral
system. Our model included advanced electrification technologies for
industry (Van Delft and de Kler, 2017; Lechtenböhmer et al., 2016),
new industrial process technologies (Choudhry et al., 2015; Zero
Carbon Australia, 2017; Neuhoff et al., 2018), direct uses of hydrogen
in high-temperature applications (Vogl et al., 2018), carbon-neutral
feedstock for chemical substances in petrochemicals (Bazzanella and
Ausfelder, 2017) and the CCU possibilities (Alper and Orhan, 2017)
enabling the so-called industrial symbiosis (Domenech et al., 2018).
The scenarios also explore circular economy restructuring, aiming at
reducing demand for energy-intensive materials. The literature on cir-
cular economy is growing, even though it does not provide analytical
information; see among others Material Economics (2018) and Ellen
MacArthur Foundation (2015).
3. Methodology
Modelling how the EU energy system can reach climate neutrality is
challenging research. We had to enhance the modelling framework and
the underlying data considerably, and also extend the time horizon
until 2070. The model enhancements concerned both demand and
supply modules. An overview of the main enhancements includes:
An extension of the industrial energy demand module to include
direct uses of hydrogen in high-temperature applications (e.g. iron
and steel for direct reduction of iron ore) in furnaces and in the
chemical industry as a fuel and as a feedstock to synthesise petro-
chemicals together with captured CO2, high temperature heat
pumps, steam and vapour recompression and other advanced elec-
trification technologies. A representation of how circular economy
concepts impacts on energy-intensive industries has been added.
The model uses a detailed representation of the buildings sectors
with a fine resolution of building types. The model captures agent
decision-making in a complex and dynamic economic-engineering
mathematical framework with an emphasis on behaviours driving
energy renovation of buildings and the ensuing choice of equipment
for heating and cooling. The model represents several market and
non-market policies that can influence energy decisions in buildings
and promote deep energy renovation.
A new module represents the production of hydrogen, direct air
capture of carbon (DAC) and the synthesis of climate-neutral me-
thane and liquid hydrocarbons, as well as the distribution of hy-
drogen either independently or when injected in the gas distribution
system. Biofuel and climate-neutral gas injections are also modelled.
The module calculates feedstock inputs to the production of syn-
thetic fuels, choice of technologies (among electrolysers and pro-
duction routes for synthetic fuels), learning-by-doing, prices of the
outputs, blending in gas distribution, distribution costs and prices of
hydrogen and synthetic fuels by consumption sector.
The power sector model was extended to add the representation of
chemical storage of electricity and the modelling of the synchronous
operation of power generation, load, renewable resources, energy
storage, including chemical storage and the charging cycles of the
various storage systems. Investment decisions in storage systems
consider various sizes and types. Technology selection is en-
dogenous depending on storage costs, the time framework of storage
cycles, the prices of storage inputs and the marginal costs of the
power system, which in turn depend on the availability of renewable
resources and the demand for hydrogen and synthetic fuels by end-
users. The power sector model solves the interconnected system of
all European countries simultaneously and captures the sharing of
balancing resources.
A module takes care to balance the capturing of carbon dioxide in
several ways, competing against each other (DAC, biomass, com-
bustion, industrial processes). The module allocates carbon dioxide
to various ways of storage, including its use as a feedstock for syn-
thetic fuels, sequestration in materials (e.g. feedstock for chemical
substances) and storage in underground caverns.
Finally, the calculation of overall costs and various policy indicators
has been extended to include investment and costs related to hy-
drogen and synthetic fuels.
The analysis presented in this paper draws on alternative projec-
tions of the EU countries’ energy demand and supply systems into the
future. The projections (scenarios, see Table 1) reflect different as-
sumptions regarding policy targets and technological developments and
were quantified using the PRIMES model8 in the horizon up to 2070. In
this paper, we focus on those decarbonisation scenarios that achieve
climate neutrality in the EU by 2050 and also use other scenarios de-
signed to achieve 80% emissions reduction (relative to 1990) for
comparison purposes. All decarbonisation scenarios achieve the same
energy efficiency, RES and emissions reduction targets for 2030 in
conformity with the targets and policies decided by the EU for 2030.
The 80%-GHG category of scenarios includes five stylised cases,
which were designed to explore different priorities regarding the dec-
arbonisation options after 2030.
8
https://ec.europa.eu/clima/policies/strategies/analysis/models_en#
Models.

3
P. Capros, et al.
Fig. 1. CO2 emissions in the EU in the 1.5TECH scenario
Source: PRIMES model.
Energy Efficiency (EE) achieves energy savings close to the iden-
tified maximum potential, through policies promoting near zero-
energy buildings, for both new and renovated, as well as stringent
technology standards for all appliances, equipment and vehicles.
Circular Economy (CIRC) restructures industry to optimise re-
source efficiency, increase material and equipment recycling rates
and reduce thereof primary production of energy-intensive metals,
chemicals and non-metallic minerals. The scenario also introduces
behavioural and restructuring changes in the transport sector and
emphasises the role of bioenergy (liquids and gaseous).
Electrification (ELEC): Electrification is a “no-regret” option, but
maximum electrification is an ambitious and uncertain strategy. The
scenario includes electricity as (almost) the single energy vector in
all sectors in the long-term, including high-temperature industrial
processes and most transport modes. Biofuels are present as a
complement of electricity, but only in sectors where full elec-
trification is not technically feasible with currently known tech-
nologies, such as in aviation and maritime.
Hydrogen (H2): The strategy assumes that hydrogen production
and distribution infrastructure develops, thus allowing hydrogen to
become a widely used energy commodity, covering all end-uses
including transport and high-temperature industrial uses. Hydrogen
could provide a versatile electricity storage service with daily up to
seasonal storage cycles. Hydrogen is assumed to become the main
distributed gas after extensive overhaul of the pipeline system and
gas storage facilities.
Power-to-X (P2X): The current infrastructure and the paradigm of
using and distributing energy commodities are maintained. The
origin of the hydrocarbon molecules is non-fossil to ensure carbon
neutrality. It is meaningful that the production of synthetic methane
and liquid fuels uses hydrogen from carbon-neutral electricity and
carbon dioxide captured in the ambient air or from biogenic sources.
The scenarios (COMBO, 1.5 TECH and 1.5LIFE) assume a combination
of elements, for both energy demand and supply sectors, from the five
abovementioned scenarios. The last two scenarios 1.5 TECH (with more
focus on the energy supply sectors) and 1.5LIFE (with more focus on energy
demand) were designed to explore the feasibility of the climate neutrality
objective and constitute the “1.5oC-GHG” pathways. The model also quan-
tified several sensitivity analysis scenarios, which are not presented in this
paper but have been considered for concluding.
4. Discussion of modelling results
4.1. Can the 2030 climate and energy framework deliver a decarbonised
economy in the long term?
To answer this question, we have developed a Baseline scenario
4
Energy Policy 134 (2019) 110960
which assumes full implementation of the EU energy and climate policy
package for 2030, but no additional measures after 2030. We assume
that the EU-ETS, enhanced by the market stability reserve regulation,
continuous conveying high carbon price signals to the sectors subject to
ETS, such as power generation. As a consequence, power generation
decarbonises considerably.
However, despite the trends in the power sector after 2030, GHG
emissions (excluding LULUCF) in the Baseline decrease only close to
62% in 2050 compared to 1990 (Fig. 1), falling short of the minimum
decarbonisation requirement of an 80% drop. The policy framework for
2030, while appropriate to lead the energy sector towards a pathway
that is compatible with the decarbonisation objective in the medium-
term, is not sufficient to drive the required emissions reductions after-
wards. Additional policies and measures are necessary for the period
post-2030 to incite further changes in the energy system that will ul-
timately lead to decarbonisation.
We argue in this paper that scaling up the 2030 policies in the
period until 2050 may enable attaining emissions reduction close to
80% in 2050, but additional policies to go beyond conventional wisdom
and support changes of disruptive nature are needed to reach climate
neutrality.
4.2. Is climate-neutrality by 2050 in the EU viable and sustainable in the
long run?
The enhanced model produced reasonably plausible projections of
deep decarbonisation in the EU using known technologies. The model
convergence has been successful in all scenarios, despite the differences
in fuel and technology mix. The “1.5TECH” and “1.5LIFE” scenarios
achieve close to zero GHG emissions overall when the LULUCF sink is
accounted. The 80%-GHG pathways reach GHG emission reductions
between 85% and 88%, compared to 1990, when the LULUCF sink is
accounted.
The pace of emission reductions has to accelerate after 2030. The
projected restructuring after 2030 is smooth and realistic. However, the
long process of achieving infrastructure and industrial maturity of key
technologies and alternative fuels successfully has to start earlier than
2030 to succeed.
All sectors, both in demand and supply of energy, have to reach
climate-neutrality in the “1.5oC-GHG” scenarios (Fig. 1). Non-abated
emissions in the 80%-GHG pathways remain mainly in transport and
few uses of natural gas for heating and industrial processing. The pro-
jections until 2070 demonstrate that in the context of the “1.5oC-GHG”
scenarios, climate-neutrality is sustainable in the long-term, as a con-
tinuation of the technological achievements until 2050. The system
generates negative CO2 emissions in the long-term to compensate the
persisting non-CO2 GHG emissions.
The feasibility of the energy transition heavily depends on the
P. Capros, et al. Energy Policy 134 (2019) 110960

Table 2 enabled by the eco-design standards and

Final and primary energy demand (EU). the electrification of transport and heat, where electricity is sig-
Source: PRIMES model nificantly more efficient than fossil fuels.
Final energy Gross Inland FEC over GIC ratio
consumption (FEC) Consumption incl. The renovation of an essential part of the existing building stock
non-energy uses deserves the highest priority to enable strong energy efficiency im-
(GIC)
provements in the residential and tertiary sectors (Fig. 2). Energy effi-
Mtoe % change Mtoe % change Ratio % change ciency improvements in industry are based on a wide spectrum of
from from 2015 from measures including heat recovery, improved control systems and
2015 2015 adoption of advanced technologies for certain industrial processes.

2015 1086 1628 0.67

4.2.2. Renewables
Baseline 2030 954 −12% 1395 −14% 0.68 3% Renewable energy (RES) is by far the primary energy form on which
2050 Baseline 881 −19% 1255 −23% 0.70 5% the climate-neutral system relies. The deployment of RES is a funda-
EE 672 −38% 983 −40% 0.68 2% mental pillar of emission reductions in power generation, where the
CIRC 738 −32% 1056 −35% 0.70 5%
ELEC 779 −28% 1154 −29% 0.67 1%
main alternative options, namely nuclear and Carbon Capture and
H2 809 −25% 1222 −25% 0.66 −1% Storage (CCS), face significant limitations due to licensing policies in
P2X 831 −24% 1475 −9% 0.56 −16% the several EU Member States, financing difficulties, as well as limited
COMBO 744 −31% 1239 −24% 0.60 −10% availability of potential sites. The dispatchable renewables, such as
1.5TECH 684 −37% 1285 −21% 0.53 −20%
hydro and biomass, are valuable but have limited potential. Therefore,
1.5LIFE 626 −42% 1099 −33% 0.56 −14%
the variable renewables are the main sources of incremental electricity.
Consequently, integrating variable renewables in the EU power
achievement of ambitious targets for energy efficiency and renewables. system under market conditions is a key strategic issue for a successful
Biomass is among the renewable sources that develop, but the incre- transition. For this reason, the scenarios assume a significant extension
mental amounts are limited. The largest part of the incremental elec- of the electricity interconnection system of the EU and a reinforcement
tricity has to come from variable renewables. Electricity of mainly re- of the grids for the period after 2030.
newable energy origin is then a climate-neutral carrier in final energy By 2050, the renewables cover 60% of total primary energy re-
uses and in the production of climate-neutral hydrogen and hydro- quirements (excluding non-energy uses) in the 80%-GHG pathways and
carbons. We discuss in this section the feasibility issue from the angles 70% “1.5oC-GHG” scenarios. Nuclear represents 17% of total primary
of demand for energy, renewables and electrification. energy in the former scenarios and 20% in the latter. Remarkably, the
renewables attain the same share, close to 85%, in power generation by
4.2.1. Demand for energy 2050, in all decarbonisation scenarios.
The model runs support the conclusion that without strong energy However, the volume of RES varies considerably, and in scenarios
savings in all sectors, it would be not sustainable to eliminate all fossil with high demand for electricity, it doubles compared to low electricity
fuels by climate-neutral energies because of the implied huge demand ones (Fig. 3). By 2050, the scenarios with a focus on supply require 1.5
for electricity. Biofuels cannot be the main solution due to feedstock times higher amounts of variable renewables than the ones focusing on
limits. Direct use of electricity cannot cover all uses of energy unless demand, to produce the electricity needed to electrify final energy uses
currently uncertain technologies develop. All other climate-neutral and produce synthetic energy carriers (Fig. 4). The incremental change
energies that can rely on known technologies are highly electricity-in- mainly derives from variable renewables, which increase 5 to 8 times
tensive. Saving energy and electricity is key to limit the amount of compared to 2015 levels (Fig. 3). By 2050, the volume of renewables in
energy that electricity will have to supply directly or indirectly. the power sector will have to double or even triple compared to levels
However, model results also show that energy savings alone cannot in 2030. In contrast, nuclear power (Fig. 3) increases modestly in the
deliver climate-neutrality fully, even if one assumes an optimistic de- high electricity scenarios, while it remains below 2015 levels in most
velopment of currently uncertain efficiency solutions. decarbonisation scenarios.
Final energy consumption (FEC) considerably decreases in all sce- Due to the significant amounts of liquid and gaseous biofuels used in
narios (Table 2), with reductions being significantly higher, as ex- transport and the amounts of injected biomethane used in the gas dis-
pected, in the demand-focused scenarios (EE, CIRC). Primary energy tribution network, total biomass requirements in 2050 are roughly 1.7
requirements present similar reductions percentagewise, expect for the times higher than in 2015. The increase in total biomass requirements
scenarios involving the production of carbon-neutral hydrocarbons, mainly concerns advanced biofuels in transport. Although limited by
where the percentagewise decrease is lower than in FEC (P2X, COMBO, potential, biofuels are a valuable option. Replacing the biofuels fore-
1.5TEHC, 1.5LIFE). seen in scenarios by synthetic hydrocarbons would imply an un-
The scenarios introducing a circular economy structure (CIRC, sustainable increase in the size of power generation.
1.5LIFE) imply a considerable reduction of energy consumption driven
by the reduction in the production of primary metals and non-metallic 4.2.3. Electrification
minerals. In the energy efficiency and behavioural scenarios (EE, CIRC A progressive increase in the electrification share of all demand
and 1.5LIFE), considerable reductions in transport activity are possible sectors is evident in all scenarios. In 2050, it surpasses 40% in all sce-
via the introduction of vehicle-sharing, improved logistics and the narios developed (including the Baseline) and lies close to 50% in most
further promotion of public transportation. cases; this compares with a less than 30% share of electrification in the
The improvement of energy efficiency in final energy demand is Baseline in 2030. It reaches a maximum of 53% in the ELE scenario.
threefold in the model: Electricity covers more than 50% of industrial energy needs in 2050 in
all strategy scenarios and 54% in the maximum electrification case. In
direct energy savings enabled by investment in insulation of the the domestic sector (buildings and agriculture), the 30% share of
building shell and advanced control and heat recovery systems in electricity in 2015 increases above 65% in 2050 in all scenarios and
industry, reaches 71% in the maximum electrification case. From a mere 2%
uptake of highly efficient equipment and appliances in all sectors, share in energy consumption in transport, electricity climbs to a share
between 15 and 27% in 2050 across all scenarios. The incremental

5
P. Capros, et al. Energy Policy 134 (2019) 110960

Fig. 2. Energy saving indicators in the buildings sector of the EU (a)

(a) The left-hand side figure refers to buildings renovated only for energy-purposes, and not for aesthetic reasons
Source: PRIMES model.

Fig. 3. Shares and volumes of renewables and nuclear in power generation

Source: PRIMES model.

Fig. 4. EU gross demand for electricity

Source: PRIMES model.

6
P. Capros, et al.
Fig. 5. Structure of final energy demand in the EU in 2050 (a)
(a) The figure shows electricity feedstock for producing hydrogen and synthetic fuels instead of their final consumption. The figures exclude non-energy uses.
Source: PRIMES model.
electricity demand for mobility in the period 2015–2050 represents
35–45% of the total incremental electricity demand in the same period,
depending on the scenario in question. In some of the scenarios as-
sessed, the combined share of carbon-neutral synthetic hydrocarbons
and hydrogen approaches 20% of total final energy, with implications
for the electricity needed for their synthesis.
The lowest increase in total demand for electricity occurs in the EE
scenario, where gross power generation increases by 16% compared to
2030. In the electrification scenario, among the scenarios focusing on
the supply side, the scenarios involving the production of carbon-neu-
tral synthetic fuels require the highest total electricity generation in
2050 (up to 117% above 2030 levels). The scenarios involving the
production of hydrogen require a smaller, although still significant in-
crease in electricity demand (79% above 2030 levels). The maximum
electrification case implies the smallest increase (57% above 2030 le-
vels), given that the direct use of electricity in end-user applications is
more efficient in absolute energy terms from a system-wide perspective,
compared to the case where electricity serves as a feedstock to carbon-
neutral energy carriers. The volume of electricity used as a feedstock is
in some scenarios of the same order of magnitude as the volume of
electricity consumed in final energy demand (Fig. 4).
Fig. 5 shows that climate-neutrality in final energy demand sectors
is possible mainly by saving energy and replacing fossil fuels by elec-
tricity used directly and fuels (hydrogen and synthetic gas and liquids)
produced by electricity (denoted as indirect electricity in the graph).
Part of the efficiency improvement is lost because the amount of in-
direct electricity has to be roughly 40–100% higher than the energy
content of the produced fuels. However, as electricity is produced
mainly by renewables, the issue of overall energy efficiency is less of a
problem as long as renewables are abundant.
The expansion of the power system in the long term, in terms of
additional capacity, mainly relies on wind turbines and solar PV. The
increase in offshore wind is higher than in onshore wind in the long
term. Our modelling shows that there exist sufficient resources of
variable renewables in Europe, which can support the very high vo-
lumes of renewables projected in the scenarios that use large amounts
of electricity, both for direct use and for producing alternative fuels.
The feasibility, however, depends on the capability of the transmission
systems to have access to remotely located resources, mainly solar and
wind offshore, and to share them, as well as to the deployment of large
balancing resources, within an integrated European market and system.
The modelling also shows that storage is the crucial condition for
the robustness of the renewables-based power system that magnifies 2
7
Energy Policy 134 (2019) 110960
to 2.5 times in 2050 (compared to current size) in the climate-neutral
scenarios. The introduction of very large amounts of variable RES in the
power system constitutes a huge technical, economic and regulatory
challenge and requires significant transformations in the sector. The
system will require substantial amounts of versatile storage, as well as a
balance between highly dispersed and concentrated resources, an in-
telligent management of electricity demand, especially of the new uses
of electricity (e.g. the charging of EVs), and, finally, the cooperative
operation of facilities that use electricity as a feedstock to produce al-
ternative fuels.
Developing a power system with a high share of variable RES re-
quires the development of storage technologies, demand response,
mesh grids and an efficient multi-country integrated system and
market, to share the resources that would enable the cost-effective
balancing of variable RES generation. Large-scale storage of electricity
(Fig. 6) with versatile features and seasonal cycles such as large-scale
batteries, power-to-H2 for chemical storage and compressed air elec-
tricity storage, depends on the technology readiness levels (TRL) of
those technologies that currently remain at a demonstration stage.
Without the synergy between chemical storage and the production of
hydrogen and synthetic fuels, the huge increase of the power system
size, projected in the climate-neutral scenarios, would have been un-
manageable. The non-linear increase of storage as a function of the
volume of total generation can be depicted in the right-hand side chart
shown in Fig. 6.
4.3. Is it possible to reach carbon-neutrality solely with conventional fuels
and technologies?
In scenarios targeting 80% emission reductions, a plethora of op-
tions is available to enable the transition. Energy efficiency boosting,
renewables and electrification are the dominant options for a system
compatible with a 2 °C objective. These options are also cornerstones of
the 2030 climate framework. Therefore, we confirm the hypothesis that
scaling up the 2030 effort with additional and more intense policies and
measures can lead to decarbonisation (with a 2 °C objective), following
the principles already envisaged in the current EU climate and energy
policy scene.
However, the modelling of the “1.5°C-GHG” pathways reveals that
due to technical and economic considerations, further promoting these
aspects cannot deliver a zero-GHG emissions economy that is afford-
able, with emissions remaining mainly in industry, as well as trans-
portation and agriculture (non-CO2 emissions). For instance, regarding
P. Capros, et al.
Fig. 6. EU storage systems capacity (GW), share of total power capacity and correlation of power storage capacity with variable RES generation
Source: PRIMES model.
mobility, GHG emissions persist in long-haul road freight, mobility and
aviation. The transport segments are hard to electrify, due to the low
energy density of batteries; the size needed to perform a long-distance
flight (e.g. over 1000 km long) is not suitable for the propulsion tech-
nologies foreseen even in the long-term. On the other hand, the biomass
for energy purposes that can be produced sustainably in the EU cannot
provide sufficiently high volumes to decarbonise transportation fully.
Moreover, as explained in the literature review section, several in-
dustrial processes and high-temperature energy uses cannot be fully
electrified with currently known technologies. The introduction of ad-
ditional elements in the energy system is therefore considered necessary
to reduce the unabated emissions and to compensate, along with the
LULUCF sink, the remaining non-CO2 emissions.
5. If not, what additional elements to promote in addition to
conventional policies and technologies?
Based on a post-analysis of the scenario outcomes and the consulted
literature, we classify the possible decarbonisation policy options con-
sidered in the analysis into two categories, as shown in Table 3. The
“no-regret” category includes options that already exist in the 2030
climate and energy policy packages, should be upscaled in the period
after 2030 and will unavoidably hold a significant role in the long-term
transition; their presence was evident in all scenarios modelled. On the
other hand, we contrast the “no-regret” options to “disruptive” ele-
ments; this category includes options that are not present in the energy
Table 3
Classification of decarbonisation options among no-regret ones and disruptive.
No Regret Options
• Energy efficiency improvement in buildings, equipment and vehicles
• Enhanced renewable power generation
➢ Large-scale investment in variable renewables
➢ Reliable integration of renewables (grids, market integration, storage
systems, demand response)
• Electrification of transport and heating where cost-efficient, e.g.:
➢ Private transport in urban environments
➢ Heat pumps in heating
• Produce sustainably and use advanced (second-generation) biofuels
• Extension in Long Term Operation (LTO) of the existing nuclear fleet where
possible and geological storage of CO2 where acceptable
Energy Policy 134 (2019) 110960
system today, and their introduction is envisaged to induce changes in
the way distribution systems supply end-consumers with energy, in the
types of equipment used, as well as in consumers’ behaviour. The
presence of some of these disruptive options is deemed necessary, based
on the findings of our analysis, for the realisation of an affordable cli-
mate-neutral EU economy by mid-century.
Given the insufficiency of the no-regret options to construct a cli-
mate-neutral EU scenario, items from the disruptive element lists must
be considered to bridge the gap between scenarios, including solely no-
regret options and climate neutrality. Given that the disruptive options
included in Table 3 rely on concepts that are relatively new in the lit-
erature, the complete analysis of each option is out of the scope of the
present paper. Instead, we choose to focus our discussion on some basic
technical, economic and regulatory considerations, regarding one of the
key options, namely the emergence of hydrogen and synthetic hydro-
carbons, as a means to decarbonise the end-use sectors and provide
storage services to the energy system, as well as a negative emissions
enabler.
The introduction of synthetic hydrocarbons brings sizable benefits
to end-users as the current paradigm of energy consumption and dis-
tribution can be maintained. Furthermore, the end-users will avoid
excessive capital expenditures to replace the transport and heating
equipment completely (by BEVs and heat pumps). On the other hand,
the larger the penetration of such fuels in the energy system becomes,
the larger is also the impact on the incremental electricity needs for
their synthesis and the higher the pressure on the RES resources and
Disruptive Changes
• Reduce energy demand in all sectors beyond conventional energy savings, e.g. circular
economy, sharing of vehicles, secondary materials production via recycling
• Changes in the way users use energy, e.g. high electrification in industry and transport, direct
use of distributed hydrogen and the way energy is distributed (grid and storage for hydrogen,
liquefied hydrogen or GHG-free methane) etc.
• Changes in the production and nature of energy commodities, e.g.:
➢ mix hydrogen and biogas in gas distribution
➢ replace fossil gas by carbon-neutral methane
➢ replace fossil liquids by carbon-neutral fuels
• Capturing CO2 from air or biomass for re-use (synthetic hydrocarbons) or underground
storage (carbon sinks);
• Capturing CO2 from fossil fuels combustion or industrial processes and use to produce
materials (sequestering carbon dioxide)
8
P. Capros, et al.
Fig. 7. EU gaseous fuels outlook
Source: PRIMES model.
technical capabilities of the power system. Also, their introduction may
imply high energy costs for consumers.
The technologies for synthetic fuels are not novel, but they are far
from being industrially mature. Several demonstration plants are in
operation in Europe. However, the estimated costs and energy effi-
ciency rates are disappointing when compared to fossil fuels. The syn-
thetic fuels are currently at least two or three times more expensive
than the corresponding fossil fuels. Also, both carbon and hydrogen
feedstocks have to be carbon-neutral over their lifecycle to support
climate-neutrality in the overall energy system. Although the require-
ments in carbon feedstock are rather small in volume terms, the capture
technologies need to prove commercial viability in the future.
The case of gaseous fuels presents a particular interest. Gaseous
fuels maintain an important role in final energy consumption in most
scenarios (Fig. 7). Nevertheless, continuing the use of fossil natural gas
is not compatible with a climate neutrality objective. On the other
hand, the gas grid infrastructure constitutes an important asset that
would be costly to abolish. Achieving climate neutrality requires gra-
dual modification of the carbon footprint of gaseous fuels over their
lifecycle. Post-2030, the progressive decline in the average emission
factor of distributed gas is possible via mixing biomethane, hydrogen
and carbon-neutral synthetic methane in the gas distribution network.
Given the suitability of biomass to provide carriers for many energy
applications (biofuels in mobility, BECSS, biogas/biomethane, etc.),
overall biomass supply limitation and competition for many applica-
tions may not allow blending rates of biomethane to exceed a 20–30%
share in total distributed gas. Anaerobic digestion of waste is a valuable
technology for biofuels, but the total potential is limited. Biomass ga-
sification is much more expensive, and large-scale potential would
challenge total biomass feedstock availability. Our modelling finds an
optimal allocation of limited biomass resources to the various possible
uses. The results show that priority should be given to biofuels to re-
place fossil fuels in transport sectors where decarbonisation is parti-
cularly difficult. Decarbonising transport using high amounts of syn-
thetic liquids has limitations, due to the impacts on the size of the
power sector. According to our results, biogas production is equally
important, but it should share the limited biomass feedstock with bio-
fuels. The blending of hydrogen in existing infrastructure also has upper
boundaries. Thus, removing the entire fossil natural gas from the gas
distribution calls for producing carbon-neutral synthetic methane at a
significant scale, unless, alternatively, the strategy opts for modifying
the distribution and storage infrastructure to accommodate potentially
high blending rates for hydrogen.
Transporting synthetic methane within the EU while still achieving
9
Energy Policy 134 (2019) 110960
security of supply standards will require investment in gas pipelines,
following a network topology much different than the one of the cur-
rent gas pipeline system. Today, this topology mainly serves transpor-
tation of gas from the East to the West. Within a synthetic methane
future, the grid must be meshed and serve all directions, mainly from
the periphery (North, South and West) to Central and Eastern Europe,
due to the different potential of renewables in different EU regions.
So far, the EU policy has adopted the target of 60% emissions re-
duction (from 2005) in the transport sector. This rather moderate am-
bition, compared to other sectors, is compatible with the “80%-GHG”
pathways, but not with the carbon-neutrality targets. The transport
sector has to decarbonise fully in the “1.5°C-GHG”, and disruptive
changes are necessary for this purpose.
It is also of particular interest to study the electrification possibi-
lities for the transport sector. Battery-based vehicles possess the highest
market share (60–90%) of the fleet of light-duty vehicles (LDVs) in all
scenarios (Fig. 8). Hydrogen vehicles address market segments char-
acterised by high annual mileage, and can get a market share up to
10–15% of total LDV stock, occurring in scenarios with enhanced hy-
drogen availability. In scenarios where synthetic hydrocarbons emerge,
conventional ICE vehicles maintain a fair 20–35% market share in the
long term. Trucks powered by ICEs but fuelled by biofuels and carbon-
neutral synthetic fuels, if available, appear to be the dominant dec-
arbonisation options for the heavy-goods vehicles (HGVs). The shares of
hydrogen attain up to 18% of the total stock of HGVs in the H2 sce-
nario. Electric vehicles may represent up to 22% of the total stock of
HGVs in the ELEC scenario. Reaching climate-neutrality in the “1.5°C-
GHG” scenarios requires significant amounts of climate-neutral fuels
(including hydrogen, liquid and gaseous fuels), as the total amounts of
biofuels are limited.
The development of large-scale power storage services in the long
term is a prerequisite to secure the successful transition towards a
decarbonised energy system. Versatile storage systems with daily,
weekly and seasonal cycles, both distributed and centralised, are ne-
cessary for administering flexibility in the energy system. Adequate
storage systems are necessary to match storage cycles with the com-
bined variability features of load and renewables. High electrification of
heat and transport implies strong seasonal variability that systems with
short storage cycles cannot address. Electricity-driven hydrogen com-
bined with the production and storage of synthetic fuels can operate
with chemical storage synergetically. In this manner, sectoral integra-
tion addresses both decarbonisation of final energy and multi-day and
seasonal storage adequately. Also, the system can achieve significant
cost reductions by scheduling hydrogen and synthetic fuels production
P. Capros, et al.
(a)
Fig. 8. EU fleet structure in road transport
(a) LDVs comprise cars and vans
Source: PRIMES model.
Fig. 9. Overview of carbon capture use and storage in 2050
Source: PRIMES model.
when low electricity prices or abundant renewables prevail, and using
synthetic fuels when renewables shortage occurs.
Achieving climate-neutrality also requires carbon removal options
(Fig. 9). The purpose is to compensate for unabated GHG emissions,
albeit small in magnitude, mainly in sectors emitting non-CO2 GHG.
The model includes the possibility of negative emissions via biomass
combustion in power plants equipped with CCS and by carbon se-
questration in materials. Both develop the “1.5oC-GHG” scenarios. Ne-
gative emissions are small in absolute volumes, though. The under-
ground storage of captured CO2 is more significant in the “1.5oC-GHG”
compared to the “80%-GHG” scenario, albeit limited in magnitude
overall.
In the case of carbon-neutral gaseous fuels and their distribution via
pipelines, another element that should be factored in is the nature of
measures that can support them. Market-based policies, such as the EU
ETS are ideal for conveying signals favouring investment in low-carbon
10
Energy Policy 134 (2019) 110960
options. Sectoral policies have also been conceived for the promotion of
energy efficiency progress in final energy consumption. CO2 car stan-
dards, as well as the eco-design standards, seem to work better than
price incentives, such as taxes, in the inducement of technology trans-
formations in some sectors. Technology developers need regulation
certainty to embark into investment and tap on the learning potential.
Technology standards with progressively increasing stringency might
facilitate visibility. Standards can induce changes also in the gas mix-
ture distributed to consumers by pipelines and promote climate-neutral
gaseous fuels in the future. Consumers cannot adjust individually the
carbon intensity of the gas mixture they wish to receive, as the gas
distribution operator controls the blending of gases uniformly for all
consumers. Distribution system operators are not emitters of GHG, and
thus carbon taxes or EU ETS are not applicable directly. However, a CO2
standard on distributed gas, or a blending mandate, are applicable and
distribution system operators can implement them via a “guarantees of
P. Capros, et al.
Fig. 10. EU total energy system costs
Source: PRIMES model.
origin” mechanism.
5.1. Is carbon-neutrality affordable?
In all decarbonisation scenarios, total energy system costs (for the
cost concepts used in this paper see Paltsev and Capros, 2013) increase
over time above the levels indicated in the Baseline scenario (Fig. 10).
The capital expenditures component of total costs is the main driver
behind this increase, whereas variable costs decrease compared to the
baseline scenario.
The factors driving energy costs upwards appear to be the lowest in
the electrification scenario. However, the uncertainty surrounding the
evolution of the costs of certain electric technologies in the demand
sectors makes the comparison difficult. For instance, pushing elec-
trification to the maximum requires using electric technologies that
remain rather immature and may prove much costlier than anticipated
in the modelling exercise. Similarly, the total costs of the scenarios
focused on the demand side are lower than the costs of those focusing
on supply. However, high uncertainty surrounds the amounts needed to
implement extreme energy savings and circular economy structures.
Fig. 11. EU average electricity prices
Source: PRIMES model.
11
Energy Policy 134 (2019) 110960
Total costs increase (Fig. 10) as the production volume of synthetic
fuels and hydrogen expands. Two main reasons lead to this outcome:
a. The end-user prices of alternative fuels are higher than the ones of
the fossil fuels they displace, as despite their learning effects, the
former remains more expensive (final demand sectors are not sub-
ject to additional carbon-related costs besides the ones in place at
present, e.g. the industries that are already part of the EU ETS).
b. The electricity-intensive production of synthetic fuels entails a
considerable increase in the total volume of power generation,
which in turn necessitates the use of remotely-located expensive
renewables that exert an upward effect on generation and network
costs (Fig. 11).
The economies of scale materialised in the production of synthetic
fuels are not enough to compensate the increase in the costs of the
power sector driven by diseconomies of scale. This result is subject to
currently uncertain learning assumptions for technologies, such as
electrolysis, the capture of CO2 from the air and methanation. The
growing technology progress of renewables and the cost reductions
P. Capros, et al.
Fig. 12. Overview of total investment expenditures in the EU
Source: PRIMES model.
enabled by chemical storage, in scenarios where this option is available,
imply stable and slightly decreasing electricity prices in the long-term
(Fig. 11). The grid costs will have to increase while fuel costs decrease
(Fig. 11).
The energy system transformation mainly relies on capital-intensive
options on both the supply and the demand side, including among
others the realisation of energy savings and the deployment of variable
RES. The largest investment expenditure (Fig. 12) within the power
generation system is associated with expanding and improving power
grids, driven by the development of renewables. The increase in in-
vestment expenditure for the development of renewables is also high.
Investment for synthetic fuels and hydrogen is notable, albeit modest
compared to the investments in the power sector. The demand-side
investment expenditures are higher than the corresponding ex-
penditures on the supply side, with the difference becoming more sig-
nificant in the demand-focused scenarios. The investment expenditures
dedicated to energy efficiency improvements in buildings form the
largest part of the total investment expenditures on the demand-side.
The scenarios focusing on reducing the demand for energy services
require lower total investment expenditures compared to the supply-
focusing scenarios (Fig. 12). However, the CIRC and 1.5LIFE scenarios
do not fully include the appropriate investment expenditures needed to
implement a circular economy structure. The 1.5LIFE scenario achieves
climate neutrality while requiring similar investment expenditures to
the 80%-GHG scenarios; the 1.5TECH scenario requires a twofold in-
crease in investment expenditure. The additional average annual in-
vestment requirements compared to the Baseline represent 1.0–1.5
percentage points of the GDP.
6. Conclusions
The quantitative analysis undertaken through the model confirmed
that the decarbonisation of the EU economy by mid-century is viable
both technically and economically, regardless of the ambition level
(limit temperature increases to well below 2 °C or 1.5 °C compared to
pre-industrial levels); the pursuit of a sustainable climate-neutral EU
economy by 2050 is a plausible target. It has also confirmed the “no-
regret” character of actions focusing, among others, on efficiency im-
provements – primarily the renovation of buildings – the large dom-
inance of renewables, as well as the critical role of electrification and
advanced biofuels.
It also highlighted the necessity to engage with disruptive techno-
logical options regarding energy carriers and technologies in order to
12
Energy Policy 134 (2019) 110960
achieve climate neutrality. The role of synthetic hydrocarbons is im-
portant as a means to bridge the gap between the performance of the
scenarios based solely on “no-regret” options and scenarios achieving
carbon neutrality. The analysis provided evidence of opportunities for
the encouragement of industrial symbiosis, based on the use of CO2,
originating from industrial capture, as feedstock for synthesis of sub-
stances in other sectors.
All decarbonisation scenarios confirm that electricity will play a
critical role in the transition, not only as an energy vector enabling the
decarbonisation of final energy demand but also as a feedstock pro-
ducing carbon-neutral synthetic fuels. Some of the technologies in-
cluded in the analysis are at low or medium technology readiness levels
(TRL). However, the analysis of several alternative pathways indicates
that the energy system has a plethora of innovative options available
and that none of them is irreplaceable apart from the “no-regret ones”,
mentioned above. It is worth noticing that investment in currently not
mature technologies and in infrastructure needs to be deployed in the
early stages of the transition to allow for a gradual and smooth re-
structuring of the system. Ensuring visibility of future markets by po-
tential investors is of utmost importance, even though the enabling
conditions pose challenges to policymaking. Resolving uncertainty to
opt for clear technology choices and infrastructure priorities is probably
the first step for successful policymaking.
The changes included in the decarbonisation strategies imply tre-
mendous benefits for the security of energy supply, as is proven by the
reduced net imports of fossil fuels in the EU. All policy options con-
sidered, including energy efficiency, renewables and synthetic fuels,
contribute towards this achievement. The climate-neutral scenarios
imply almost full independence from fossil fuel imports. The annual EU
bill for fossil fuel imports, which is expected to surpass 2.5% of the EU
GDP by 2030 is reduced to 0.8% in the 1.5o-GHG scenarios, mainly for
non-energy uses.
The assessment of cost impacts, based on the model, has shown that
the increase in costs for the consumers is small compared to the am-
plitude of transformations and restructuring. Economies of scale and
the achievement of the learning potential are important prerequisites.
The cost structure evolves towards a strong increase in CAPEX and a
slight decrease in OPEX in the entire energy system, the latter due to the
increase in the costs of synthetic fuels compared to fossil fuels.
Dependence on investment funding is consequently an important factor
for consideration. Investment in the demand sectors also requires spe-
cial attention, because the transition requires a large volume of capital
in demand sectors, which raises concerns about the investment
P. Capros, et al.
possibilities of individuals, who, depending on income conditions, may
lack capital funding or may face non-market barriers obstructing in-
vestment decisions. Consequently, policies combatting energy poverty
will have to also address the eventual lack of sufficient technology in-
vestment by low-income classes.
Lastly, we plan to follow-up on this assessment by further analysing
the many uncertainties associated with the various pathways studied.
That is to say; future research should place particular emphasis on the
identification of appropriate policy instruments that could be used for
the emergence of technologies and energy carriers, as long-term visi-
bility of future markets is crucial for their deployment. Finally, the
characteristics and costs of several disruptive technologies are also
worthy of further study, with emphasis on the potential of learning and
economies of scale.
Appendix A. Supplementary data
Supplementary data to this article can be found online at https://
doi.org/10.1016/j.enpol.2019.110960.
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