Energy 205 (2020) 118025

Contents lists available at ScienceDirect

Energy
journal homepage: www.elsevier.com/locate/energy

Review

Challenges in the decarbonization of the energy sector

Elisa Papadis*, George Tsatsaronis
€t Berlin, Marchstr. 18, 10587, Berlin, Germany
Chair of Energy Engineering and Environmental Protection, Technische Universita

a r t i c l e i n f o a b s t r a c t

Article history: In order to limit the effects of climate change, the carbon dioxide emissions associated with the energy
Received 26 December 2019 sector need to be reduced. Significant reductions can be achieved by using appropriate technologies and
Received in revised form policies. In the context of recent discussions about climate change and energy transition, this article
27 April 2020
critically reviews some technologies, policies and frequently discussed solutions. The options for carbon
Accepted 31 May 2020
Available online 6 June 2020
emission reductions are grouped into (1) generation of secondary energy carriers, (2) end-use energy
sectors and (3) sector interdependencies. The challenges on the way to a decarbonized energy sector are
identified with respect to environmental sustainability, security of energy supply, economic stability and
Keywords:
Decarbonization
social aspects. A global carbon tax is the most promising instrument to accelerate the process of
Energy sector decarbonization. Nevertheless, this process will be very challenging for humanity due to high capital
CO2 emissions requirements, the competition among energy sectors for decarbonization options, inconsistent envi-
Carbon tax ronmental policies and public acceptance of changes in energy use.
Renewable energy sources © 2020 The Authors. Published by Elsevier Ltd. This is an open access article under the CC BY license
(http://creativecommons.org/licenses/by/4.0/).

Contents

1. Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2. Energy transition towards decarbonization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2.1. Historical background . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2.2. Current status in global CO2 emissions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
3. Options for decarbonization in each sector . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
3.1. Generation of secondary energy carriers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
3.1.1. Electricity generation sector . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
3.1.2. Heat supply sector . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
3.1.3. Petroleum products and synthetic fuels . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
3.2. End-use energy sectors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
3.2.1. Households and public buildings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
3.2.2. Trade and commerce . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
3.2.3. Transportation sector . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
3.2.4. Industry sector . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
3.3. Interdependencies of the sectors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
3.3.1. Process integration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
3.3.2. Water-energy nexus . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
4. Challenges to overcome . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
4.1. Environmental sustainability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
4.1.1. Investments in energy conversion systems . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
4.1.2. Investment needs in developing economies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
4.2. Security of electricity supply . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
4.3. Economic stability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

* Corresponding author.
E-mail addresses: elisa.papadis@tu-berlin.de (E. Papadis), georgios.tsatsaronis@
tu-berlin.de (G. Tsatsaronis).

https://doi.org/10.1016/j.energy.2020.118025
0360-5442/© 2020 The Authors. Published by Elsevier Ltd. This is an open access article under the CC BY license (http://creativecommons.org/licenses/by/4.0/).
2 E. Papadis, G. Tsatsaronis / Energy 205 (2020) 118025

4.4. Social aspects of transition and dilemmas . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

5. Solutions and policies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
5.1. Emission trading scheme requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
5.2. Carbon pricing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
5.3. Further measures and future work . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
6. Conclusions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Declaration of competing interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Acknowledgments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Nomenclature . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

1. Introduction attention. In general, decarbonization of industry and transport is

not discussed in detail. With respect to economic issues, the need
Recent developments in climate change and increasing carbon for substantial low-carbon investments in the energy sector is seen
dioxide (CO2) emissions worldwide show that, although the share as the major challenge, both in industrialized and emerging econ-
of renewable energy (RE) in the primary energy supply is growing, omies [16,18,20]. Long-term financing and policies to ensure
all countries have to significantly increase their efforts in order to decarbonization while contributing to economic development are
decarbonize the energy sector in the future. required [16]. Barido et al. [22] point out the necessity of support
The last two decades contain the warmest years on record [1e3]. mechanisms that include multiple country-specific factors. A
Weather phenomena are becoming extremer. Surveys [4e8] show further major challenge is associated with socially viable mitigation
that people are worried about climate change as they face an strategies. Public acceptance of technology options, acceptable
increased number and intensity of phenomena such as floods, energy prices and benefits to the communities are addressed in this
droughts, fires, storms or sea-level rise. In addition, climate change context [16]. Heard et al. [23], state that no carbon-free technology
is expected to worsen many kinds of diseases. Climate change is can be limited a priori. This statement overlooks the fact that some
anthropogenic and the main cause is the increasing combustion of carbon-free technologies are simply not viable because of eco-
fossil fuels to cover the growing need for energy [1,9e13]. nomic, political or social considerations. Psychological and cultural
The decarbonization of the energy sector has been the subject of aspects can be both drivers and barriers in the process. In the po-
research for several years, gaining increased attention recently. It is litical dimension, country and regional policies need to be consis-
commonly acknowledged that the most obvious way to achieve tent with international decarbonization strategies and enable
decarbonization is the use of RE. Therefore, many countries already economic growth [16].
use a continuously increasing share of their renewable resources, Rockstro € m et al. [24] mention the lack of national commitments
such as wind, solar, geothermal or hydro energy to generate elec- to following decarbonization pathways. Energy system models are
tricity. For example, some countries have already achieved very valuable planning instruments for estimating possible decarbon-
high shares of RE for electricity generation due to hydropower, such ization pathways. There are several publications dealing with
as Paraguay (99%), Norway (97%) and Costa Rica (93%) [14]. China modeling the electricity sector (e.g. Ref. [25e32]) as well as the
and the USA had the highest installed wind energy and solar entire energy sector (e.g. Refs. [31e35]) in Europe and worldwide.
photovoltaics capacity worldwide in 2019 [15]. Despite many high-quality publications addressing the urge for
However, the decarbonization of the energy sector entails decarbonization and the challenges associated with it, national and
several challenges and the interdependencies between the sec- international politics are far behind in achieving the target. Many
ondary energy carriers and end-use energy sectors should not be researchers and scientists (e.g. Ref. [13,16,24,36,37]) call for the
underestimated. With this paper we aim to contribute to the introduction of stricter controls on carbon emissions, in the form of
decarbonization efforts by providing a basis for a better under- an appropriate carbon tax, in order to encourage fast action in the
standing of the challenges associated with it. short term. There is an immense need for early action now, since
In literature, challengesdincluding those of the integration of significant time is required for innovations and for the deployment
REdare usually categorized into technological, economic, and so- of globally applicable strategies.
cial issues. The most important issue is to ensure that technology In this article we review the historical development of the global
options are available at the required scale and at an acceptable cost, decarbonization process and assess the technology options for
particularly for sectors which are more difficult to decarbonize, decarbonization in each sector. We evaluate whether the technol-
such as industry or transport [16,17]. The main challenge is to ogy options are proven and viable for the future energy sector
reduce fossil fuel use in the end-use sectors [18]. Brown et al. [19] design, analyze the challenges from environmental, technical,
introduce and distinguish viability criteria for the transition to RE- economic and social perspectives, and discuss some solutions and
based electricity systems. They emphasize the importance of policies.
proven technologies and resource availability. The challenges of the
integration of high RE shares in the electricity sector are stated and 2. Energy transition towards decarbonization
analyzed in several publications (e.g. Ref. [17,20]). Complexity in-
creases with increasing RE shares while in parallel phasing out 2.1. Historical background
fossil fuels [20]. Loftus et al. [21] review existing decarbonization
scenarios and assess the potential contributions of each primary The first worldwide common efforts to control and stabilize the
energy carrier to decarbonization. According to their analysis, most concentration of greenhouse gases (GHG) in the atmosphere took
of the studies treat economic issues and only few discuss techno- place at the Earth Summit in Rio De Janeiro in 1992, where many
logical readiness. The system integration is treated superficially or countries agreed on the United Nations Framework Convention on
not at all, and social and non-cost aspects are also given minor Climate Change (UNFCCC) [38]. The ultimate objective of this
 E. Papadis, G. Tsatsaronis / Energy 205 (2020) 118025
convention is to “achieve […] stabilization of greenhouse gas
concentrations in the atmosphere at a level that would prevent
dangerous anthropogenic interference with the climate system”
[39]. Such a level should be achieved within “a time-frame suffi-
cient to allow ecosystems to adapt naturally to climate change, to
ensure that food production is not threatened and to enable eco-
nomic development to proceed in a sustainable manner” [39]. The
UNFCCC was followed by an agreement for setting internationally
binding emission reduction targets that is commonly known as the
Kyoto Protocol. It states “common but differentiated re-
sponsibilities” of the parties [40].
The United Nations defined three mechanisms which support
the countries with commitments under the Kyoto Protocol in
reaching their emission reduction targets cost-effectively [41,42]:
1. Emission trading (ET). The parties have emission limitations,
which are expressed as emissions allowances. The emission al-
lowances can be traded between parties that are over or below
their targets.
2. Joint Implementation (JI). This mechanism allows a party to earn
emission reduction units (ERUs) from an emission reduction or
removal project with another party.
3. Clean Development Mechanisms (CDM). Parties can implement
emission reduction projects in developing countries and earn
saleable certified emission reduction credits (CER).
In another annual Conference of Parties of the UNFCCC in Paris
in 2015, the succession of the Kyoto Protocol was adopted, which is
commonly known as the Paris Agreement. The key resolution was
the commitment to “limit the temperature increase to well below
2
C compared to pre-industrial levels, with efforts to limit it to
1.5
C” [44]. It came into force in November 2016 [44].
In parallel to the Kyoto Protocol and Paris Agreement, the UN
developed 17 Sustainable Development Goals (SDGs), agreed to by
193 countries in 2015 [45]. In particular, Sustainable Development
Goal 7 has the scope to “ensure universal access to affordable,
reliable, sustainable and modern energy services by 2030” [45].
Specified indicators for success are the proportion of population
with access to electricity and primary reliance on clean fuels and
technologies, the RE share in the total final energy use, and the
energy intensity measured in terms of primary energy and gross
domestic product (GDP).
2.2. Current status in global CO2 emissions
Although the mechanisms of the Kyoto Protocol have been
ratified by industrialized countries and economies in transition, the
total global CO2 emissions have been increasing continuously
(Fig. 1). Carbon pricing (carbon tax and ET) covered only about 15%
of the GHG emissions worldwide in the year 2018 [46].
The main reason for the mechanisms associated with the Kyoto
Protocol not achieving higher emission reductions is the very low
price of emission allowances, which resulted in a surplus of cer-
tificates in the market [47,48].
The abundance of certificates made climate friendly in-
vestments not attractive economically. The profit generated
through emission trading schemes (ETSs) was not reinvested into
low-carbon technologies or research, which resulted in a lack of
effort to achieve decarbonization. Neither the transport nor the
buildings and agriculture sectors are included in the ETSs, even
though high emissions occur in them. As for the CDM and JI, there
was no incentive for investment due to low certified emission re-
ductions. In general, there was a lack of control and no sustain-
ability assessment in place for either mechanism, which made it
hard to monitor the progress.
3
Drastic global measures to cut emissions are not part of the Paris
Agreement, since each country is left to put national measures into
action. The SDGs, and particularly Goal 7, are necessary to globally
reduce the differences in the living standards among countries.
Although the characterization of energy services in the SDG 7 is
promising, it is also somewhat contradictory. Reliable, sustainable
and modern energy services are definitely desirable, yet they entail
high investments, which in turn affect the affordability.
From 1990 to today, the world’s population has been steadily
increasing, reaching 7.4 billion people in 2016. It is expected to
reach 10 billion people by 2060. In addition, the share of people
without access to electricity has been decreasing since 1990 and fell
below one billion for the first time in 2015, a number that is ex-
pected to further decline. These developments imply that the de-
mand for energy will continue to grow. Refs. [46,49e51] foresee an
increase in the efficiency of providing and using “end-use” energy,
which would counteract the increasing demand from the growing
population.
In order to identify the highest potential for decreasing CO2
emissions, the emissions from the secondary and end-use energy
sectors are examined. The highest emissions are associated with
electricity and heat generation, and with industry, in all regions of
the world, see Fig. 2, [52]. The per sector emissions of world regions
show that Asia’s CO2 emissions from electricity and heat generation
are very high. Asia’s emissions from the buildings and industry
sectors are also the highest, compared to the other regions. It must
be noted that transport does not include international marine and
aviation.
3. Options for decarbonization in each sector
In the following subsections some options for the decarbon-
ization of the energy sector are analyzed. The discussion addresses
secondary energy carriers and end-use energy sectors, see Table 1.
3.1. Generation of secondary energy carriers
The generation of secondary energy carriers such as electricity,
heat, petroleum products and synthetic fuels is dominated world-
wide by chemical reactions, mainly the combustion of fossil fuels.
Only in electricity generation is the share of renewable primary
energy substantially increasing. In the past years, with the energy
transition and the liberalization of the energy markets implying
many regulatory changes, the secondary energy sector has under-
gone major transformations and more are expected to come.
3.1.1. Electricity generation sector
In the electricity sector, an amount of RE (photovoltaics, onshore
and offshore wind) and hydropower have already been integrated,
with South and Central America and Europe reaching the highest
shares (Fig. 3). The share of RE sources in the electricity generation
mix of the regions can be attributed to efforts to increase the
installed RE capacity (as in Europe) or to the occurrence of favorable
environmental conditions, for example, the existence of potentials
to use hydropower or geothermal energy (as in South and Central
America).
Nevertheless, coal, nuclear energy and natural gas still dominate
the electricity generation globally. The use of primary energy
sources in the electricity generation depends on the natural re-
sources, the economic state and the historical development of each
region. Revenues generated from the exploitation and export of the
fuels are an essential contributor to the economy and employment
of some regions. For this reason, it is very challenging to convince
policy makers in these regions to halt coal and oil expansion.
The electricity sector is regarded as the one where
4 E. Papadis, G. Tsatsaronis / Energy 205 (2020) 118025

Fig. 1. CO2 emissions per region based on data from Ref. [43]. Transport includes international aviation and maritime transport.

Fig. 2. CO2 emissions per sector and region of the world in 2016. Own representation based on data from Ref. [52].
 E. Papadis, G. Tsatsaronis / Energy 205 (2020) 118025 5

Table 1
Energy carriers and sectors.

Primary energy Non-renewable: fossil fuels, nuclear energy

Renewable: solar (wind, hydropower, solar irradiation, biomass), geothermal, gravitational
Secondary energy Electricity
Heat
Petroleum products
Synthetic fuels
End-use energy Households
Trade and commerce (incl. agriculture)
Transport
Industry

decarbonization will be achieved first, compared to the other sec-
tors. Sector coupling options, in which a future increased share of
the heat and buildings, transportation and industry sectors will be
electrified, make the decarbonization of the electricity sector more
urgent. Yet how can this transition be achieved? From the gener-
ation side, the deployment of renewables needs to be promoted
further worldwide. In all the following discussions, it is implied that
RE sources will continuously be exploited worldwide.
Conventional power plants will still be necessary to cover the
remaining residual load, due to the fluctuation of power generation
from renewables. The efficiency increase in these plants is often
presented as an attractive option contributing to decarbonization.
However, we must realize that (a) in some plants (e.g., combined-
cycle power plants), regardless of the contribution of innovation,
we are slowly approaching thermodynamic limits which, after a
point, will make further efficiency improvements impossible, and
(b) in all thermal power plants, further efficiency improvements
can be obtained only by significantly increasing the capital cost, a
fact which makes these plants less economically attractive.
Nevertheless, a fuel switch from coal to natural gas needs to be
achieved as a mid-term solution, leading to a gradual coal phase-
out, as it is already being discussed or agreed upon in several
countries [54]. After a transition period, during which natural gas
will be combusted, a fuel switch to green fuels will likely occur. This
creates further challenges, since for instance, hydrogen generation
from RE sources is not yet economically feasible (section 3.1.3). An
increased share of RE demands higher flexibility of thermal power
plants, leading to challenges in obtaining system security (section
4.2).
An option which is often referred to as the major technology for
decarbonization of the power sector and energy intensive industry
is Carbon Capture and Storage (CCS). The technical feasibility of CCS
is established, since it is based on conventional technology (pre- or
post-combustion, oxyfuel process, see, e.g., Refs. [55]). Neverthe-
less, only very few plants for CCS in electricity generation have been
implemented (out of 32 CCS projects in the gas processing, industry
and electricity sector globally, only 3 are in operation in the elec-
tricity sector [56]). An assessment of whether CCS from power
plants can reduce the overall environmental impact of electricity
generation led to the result that, depending on the energy penalty
associated with CO2 capture, CCS does not necessarily result in a
reduction of the overall environmental impact [57], because CO2

Fig. 3. Share of fuel in electricity generation of each region in 2018, based on data from Refs. [53] (CIS: Commonwealth of Independent States).
6 E. Papadis, G. Tsatsaronis / Energy 205 (2020) 118025
capture requires additional energy input and results in significant
efficiency reductions. In the study “Integrated Energy Transition”
[58] CCS is excluded as an option for decarbonization in the short
term. Additional concerns regarding possible environmental dam-
age during the storage, low economic viability and problems with
the public acceptance of the CO2 transportation resulted in the CCS
technology not reaching the status of commercialization. In
connection with CCS, the technologies Carbon Capture and Usage
(CCU) and Carbon Capture, Utilization, and Storage (CCUS) need to
be mentioned. According to Quarton et al. [59], an emission
reduction can be achieved with CCU, whilst delivering useful
products. However, the contribution of CCU to the global CO2
reduction is found to be negligible or even a costly distraction, if the
chemicals created with the captured CO2 are used and the CO2 is
released to the atmosphere again [59,60]. As for CCUS, the weak-
nesses of both previously mentioned options (CCS and CCU) apply
combined. In our opinion CCS, CCU and CCUS are no realistic op-
tions for decarbonization and are, therefore, not further considered
in this paper.
Another theoretical technology option are nuclear fusion re-
actors, once they have reached commercial status. The electricity
generated would be safe, carbon free and adequately available.
However, given the long period of time during which nuclear fusion
has already been the subject of research, with not very encouraging
results, this technology is not considered for decarbonization.
Nuclear fission is indeed an option for decarbonization, how-
ever, as long as the questions of safety and of the treatment and
disposal of nuclear waste have not been answered satisfactorily, it
does not represent a truly sustainable solution. Nuclear fission is
associated with significant public opposition in several countries
and is considered highly risky due to societal risk and unresolved
economic issues in many recent publications [61e63]. Further
publications show model-based results, where a transition to a
low-carbon economy is possible without nuclear power
[26,30,62,64]. In addition, nuclear generation is not well aligned
with RE electricity generation, because its ramp rates are slow and,
therefore, this less flexible operation would lead to a relatively low
number of full-load hours, resulting in no economic viability due to
high capital costs [19,20,26,65]. Even though often discussed as a
broadly applicable option for decarbonization, the very high capital
cost of nuclear power makes it an unachievable option for
emerging economies [62]. Because of all these reasons, the ex-
pected real contribution of nuclear fission to decarbonization will
probably remain relatively low.
3.1.2. Heat supply sector
Since process heat is discussed in section 3.2.4, in this section we
mainly refer to heat used for space heating and hot water supply in
residential and commercial buildings.
The heating sector in rural areas is dominated by decentralized
heating systems mainly based on oil or gas. In contrast, district
heating networks (DHN) supply a high share of thermal energy to
consumers in many large cities. District heating systems are usually
supplied by combined heat and power (CHP) plants or heat only
plants based on fossil fuels. Low-carbon energy sources can
currently not compete with fossil fuels, particularly when the latter
are subsidized and legally favored by governments.
In the short term, the expansion of DHN supplied by CHP plants
should be favored, since they have a higher degree of fuel utiliza-
tion compared to the separate generation of heat and electricity
and thus contribute to primary energy savings. Waste-to-energy is
expected to play an increasing role in the CHP sector [66,67]. Excess
heat from industrial and municipal waste incineration can be effi-
ciently integrated into DHN. An environmentally friendly operation
must be ensured by commercially available technologies for flue-
gas cleaning. The transition should move towards DHN using RE
as a primary energy source. Alternative low-carbon heating sour-
ces, e.g. solar thermal energy and the use of waste heat can supply
DHN as well as individual households with decentralized heating
systems. Lowering supply temperatures can enable the integration
of various alternative heating sources. Thermal storage for seasonal
and daily storage of heat can provide the needed flexibility to CHP
plants and enable an efficient operation [68]. Power-to-heat tech-
nologies (e.g., heat pumps and electric boilers) powered by “green
electricity” can provide flexibility on the generation side while
using low electricity prices under suitable regulatory frameworks
[69].
3.1.3. Petroleum products and synthetic fuels
Liquid and gaseous energy carriers are used extensively now
and will still be indispensable in the future. Petroleum has the
highest share in the global primary energy demand [49]. Since it is
used in almost all sectors, it contributes to the emissions of all end-
use energy sectors.
Especially in the transport sector, liquid fuels dominate. Liquid
biofuels can substitute liquid fuels derived from petroleum with
minor adaptations to the existing infrastructure.
Synthetic fuels and hydrogen are attributed great importance
for decarbonization in the future [70]. Hydrogen could in the long
term substitute natural gas in power and heat generation, but also
in sectors which are harder to decarbonize, such as the chemical
and metallurgical industries, or the transportation sector, since its
combustion has no environmental impact. Relatively small adap-
tations of technical equipment would be necessary for a retrofit
from natural gas to hydrogen and the existing gas distribution
pipelines or an infrastructure similar to these could be used.
However, the generation of hydrogen has several drawbacks.
Hydrogen can be generated from synthesis gas (a mixture of carbon
monoxide and hydrogen) out of methane, heavy fuel oil, biomass or
coal. In some refinery processes, hydrogen is generated as a
byproduct (e.g., in catalytic naphtha reforming). Currently, more
than 70% of the commercially available hydrogen is generated
through steam reforming of methane, an endothermic chemical
catalytic reaction that uses additional gas to provide the required
heat.
Furthermore, hydrogen can be generated via electrolysis of
water. For hydrogen generation, however, to be declared as “green”
and minimize CO2 emissions, it must be produced solely through
power generated from RE sources. In this way, hydrogen electrol-
ysis can provide flexibility to the energy system through conversion
of power to gas and back to power, for instance using gas turbines
or fuel cells. The main challenge of H2 electrolysis are the high
production costs of hydrogen. Additionally, from the thermody-
namic viewpoint it is not meaningful to invest money to convert
electricity (having the highest thermodynamic quality) into an
inferior energy carrier (hydrogen) with significant thermodynamic
inefficiencies. Another challenge is the storage of hydrogen.
Liquefying hydrogen is highly energy intensive, and is, therefore,
only justified in specific cases.
Establishing a hydrogen economy has been a topic of research
for over 40 years now. We must be careful about how we evaluate
solutions in which hydrogen is generated through electrolysis and
how we place the boundaries of the system we evaluate: for
example, hydrogen generation that appears to be a meaningful
decarbonization solution at the local level because here the elec-
tricity used in the electrolyzer is generated from renewable re-
sources (“green” hydrogen), becomes a dissatisfactory solution, if
this electricity could have been transported to another region and
used there to reduce the amount of fossil fuels combusted there for
electricity generation. In this example it would have been more
 E. Papadis, G. Tsatsaronis / Energy 205 (2020) 118025
appropriate to use the electricity in the second region and to
consume a fossil fuel (instead of hydrogen) in the first one, because
in this way the inefficiencies and costs associated with the con-
version of electricity to hydrogen would have been avoided and the
overall emissions would be lower. With respect to setting bound-
aries for decarbonization evaluations we must always consider the
largest possible meaningful geographical area.
If we establish a hydrogen economy, the decarbonization
requirement dictates that we must effectively distinguish between
“green” hydrogen on one side and “grey” or “black” hydrogen
(hydrogen generated through steam reforming of natural gas or
through synthesis gas generated by coal gasification) on the other
side. Thus, we can conclude for the hydrogen economy that the very
large quantities of hydrogen that would be required for an almost
complete decarbonization in this century probably cannot be pro-
vided without a significant increase of electricity generated by
nuclear energy. The hydrogen economy could be meaningfully
implemented at a time point characterized by a worldwide
shortage of fossil fuels and, in parallel, large quantities of excess
“green” electricity.
It is possible that the current situation with respect to hydrogen
production will change through innovative concepts. For example
the HECAP (Hydrogen and Electricity generation from CArbona-
ceous materials and Process heat) process [71,72] that was devel-
oped by the second author in 1981 is a truly zero-emission process
and has an unusually high overall thermodynamic efficiency. This
process uses any carbonaceous material (e.g., bad-quality coal) and
process heat (which nowadays could be provided by solar energy)
to generate electricity and hydrogen, the most important energy
carriers of the future. The CO2, which is generated in the combus-
tion of the carbonaceous material with sulfuric acid (H2SO4), leaves
the process at high pressure in a liquid state and could be directly
stored or used in another chemical process. Furthermore, the sulfur
dioxide (SO2) is removed from the HECAP process as a liquid,
whereas no nitrogen oxides can be formed in the process because
the combustion is not conducted with air as an oxygen carrier, but
with sulfuric acid. On the downside, some equipment of the HECAP
process (high-temperature filters for the removal of particulate
matter after combustion, gas turbines using a mixture of CO2, SO2
and H2O as working fluid, as well as the electrolytic step in the
generation of hydrogen in the so-called Westinghouse thermo-
chemical process) are not yet commercially available. It should be
noted, however, that without the development of new innovative
concepts for hydrogen production, hydrogen will probably remain
throughout the current century an “energy carrier of the future”.
3.2. End-use energy sectors
In the group of the end-use energy sectors, households and
public buildings are treated in the same section, as they have a high
demand for secondary energy (electricity and heat). Agriculture is
considered together with trade and commerce. Further end-use
sectors are transport and industry.
3.2.1. Households and public buildings
The buildings sector is mainly shaped by the living standards. In
industrialized countries, the future demand for energy will most
probably be flattened as a result of the higher efficiency of appli-
ances. In developing countries, however, an increase is predicted
for the future, mostly due to improving standards of living [50].
The bottlenecks in this sector are the required high investments
and the lack of financial incentives for the use of more efficient and
renewable-based energy systems. Many countries do not have
mandatory building codes despite the high rate of construction of
new buildings [73]. Developing countries face a completely
7
different situation, with a share of the population lacking access to
modern housing. The energy demand for heating and cooking
purposes is primarily covered by burning biomass or coal in stoves.
Energy efficiency needs to increase through better insulation of
buildings, more efficient heat-supply (cold-supply) systems and
usage of highly efficient appliances. Lastly, the behavior changes of
people living in the buildings can also be a major driver in reducing
the energy demand in households and buildings.
3.2.2. Trade and commerce
Referring to trade and commerce, we focus on the sector of
agriculture and the supply of goods, because more than 25% of GHG
are emitted from agriculture, forestry and land use [13]. The
coexistence of a surplus society that discards food and a society
with insufficient food supply reveals major opportunities for
change, which will affect the natural resources. The report on
“Climate Change and Land” [74] addresses several issues which are
directly related to the living standards of the industrialized coun-
tries. The high demand for meat, short product life cycles and the
consumerist behavior amplify climate change and affect land use.
The need for more land area, decrease in soil fertility and forested
area, and increase in desert area are already visible consequences of
this lifestyle. The relatively high energy demand for fertilizers and
transportation increases the emissions of the agriculture sector
[75]. The challenge remains to feed a growing population. Com-
bined global efforts towards an increase in the forested area and a
termination of deforestation are necessary measures.
With respect to the increasing population of the world, humans,
especially in industrialized countries, need to accept changes in
their behavior. Reducing the demand for meat by consuming less,
wasting less food, increasing product utilization and reducing
waste can contribute to lessening CO2 emissions and protecting the
environment. This implies a huge challenge for developing econo-
mies, which need to avoid the “mistakes” made in industrialized
societies and directly adapt to new lifestyles following a more
sustainable way of living. Considering the historical responsibility
of the industrialized countries and the fact that elements of the way
of life in these countries are often adopted by developing countries,
the efforts to change the way of life in the industrialized countries
should be even greater.
3.2.3. Transportation sector
The transportation sector is split into road and rail transport, as
well as maritime traffic and aviation. The possibility to move
worldwide at comparably low cost has an impact on the increases
in land, sea and air traffic.
Light-duty vehicles, such as cars, are the most common means
of transport worldwide. Freight transport on land is mainly carried
out with trucks. Cars and trucks are further responsible for non-CO2
pollutants like nitrogen oxides, sulfur dioxide, carbon monoxide,
solid particles and more [76]. Future climate friendly transportation
should be more efficient. Electromobility can be applied to cars and
trucks and is included as an option in most future scenarios. To
reduce the overall CO2 emissions, however, the electricity used in
electromobility should be generated by RE sources and definitely
not by using coal. Fuel-cell vehicles are considered to take longer to
reach commercial status using “green” hydrogen. Improved public
transport, consisting of high frequented routes and attractive
pricing schemes, as well as car-sharing offers can contribute to
decreasing CO2 emissions. An extended rail network with fast
connections between cities can enable consumers to shift to low
carbon transport. Sharing, route optimization, relaxing of delivery
windows and higher operational efficiency can hold future CO2
emissions from trucks at low levels [77].
Aviation is used for freight and passenger transport. It accounts
8 E. Papadis, G. Tsatsaronis / Energy 205 (2020) 118025
for 2.1% of global CO2 emissions [78] and is the most challenging
sector to decarbonize [79]. Reductions in CO2 emissions in this
sector include efficiency and operational improvements, fuel
switching and regulatory measures. Improved air traffic manage-
ment can reduce CO2 emissions through more direct routing and
flying at optimum altitudes and speeds [76]. In the very long term,
switching to power-to-gas and alternative fuel solutions (i.e. bio-
fuels and green hydrogen) can be an option. In this case, however,
aviation would compete directly with other sectors for the use of
the limited quantities of these “green” fuels. The above mentioned
measures require high investments. Therefore, no substantial ef-
forts towards emission reduction are expected from that sector
without policy incentives, regulations on national and international
level or a significant fossil-fuel price increase. Currently, emissions
from international aviation are not being fully charged in the
existing ETSs. A new resolution to address CO2 emissions from in-
ternational aviation as of 2021 was agreed upon by the Interna-
tional Civil Aviation Organization [78]. The Carbon Offsetting and
Reduction Scheme for International Aviation (CORSIA) aims to
stabilize CO2 emissions at 2020 levels by requiring airlines to offset
the growth of their emissions after 2020. The participation is
voluntary from 2021 and mandatory after 2026 [78]. CORSIA is not
satisfactory because the participation should be mandatory from
the very beginning and because the ways for achieving decarbon-
ization are not convincing.
Maritime transport is based on heavy fuel oil and accounts for
2.5% of global CO2 emissions [80]. It is a comparatively efficient
mode of freight and passenger transport [76]. Maritime transport
emissions could increase in the future, in light of the increasing
demand for transported goods. Monitoring emissions, introducing
efficiency improvements to reduce emissions as well as global
strategies to include them in ETSs are necessary. The efficiency of
newly built vessels could be improved by applying the fuel price
increases and technical changes, such as waste heat recovery,
auxiliary power systems and operational measures [76]. Fuel
switching in maritime transport systems is quite unlikely in the
short term, because the fuel cost is currently low and alternatives
are still very expensive [76].
Transportation should be shifted from road and air to railway
and water wherever possible. Besides technical, operational and
market-regulated aspects, the shift also requires a behavior change
in the population.
3.2.4. Industry sector
The industry sector includes many highly energy-intensive
processes which are difficult to decarbonize [81e86]. High emis-
sions occur in the following industries: metallurgical (iron and steel
making, aluminum, copper), chemical (refineries, plastic, fertil-
izers), non-metallic minerals (cement and lime, ceramics, glass),
pulp and paper, textiles and leather, food processing and mining.
Iron and steel making require high-temperature process heat
which is usually supplied through fossil fuels, but can be efficiently
provided by (green gas-fired) CHP processes [82e84,87,88]. In-
dustrial products are used internationally and therefore the allo-
cation of emissions is challenging. In order to head towards
decarbonization of industry, energy efficiency must be increased in
all industrial sectors [82,88], for example through process inte-
gration. Utilization of waste heat in conjunction with heat pumps
can decrease the primary energy demand [84,88]. Wherever
possible, fuel switching, deployment of “green” hydrogen and
electrification of processes can decrease the CO2 emissions
[82,83,85,87]. With respect to behavior change, a reduction in
product demand will also contribute. Furthermore, a reduction of
plastic production and use, can decrease the primary energy de-
mand for oil or gas. New user habits and supply chain models are
necessary to achieve this. Nevertheless, without efficient policy
measures, decarbonization is very unlikely to happen in this sector
[85].
3.3. Interdependencies of the sectors
Process integration and energy-water nexus are not associated
with only one of the above-mentioned sectors. Therefore, they are
discussed in the following sections.
3.3.1. Process integration
Increased efficiency is an option for lowering overall emissions
which is often praised (and sometimes overemphasized). Especially
in processes which are characterized by high primary energy de-
mand and/or high fuel prices, process integration is a way to in-
crease overall efficiency while decreasing resource consumption
and waste of manufacturing procedures. Synergies can be obtained
by further utilizing energy (heat or electricity) and material (water,
solvents) flows, leading to technically, environmentally and
economically viable solutions [89]. Heat integration is a well-
known form of process integration and can be applied through
pinch analyses in heat exchanger networks [90]. Industrial power
plant synergies can be obtained when the plants are clustered at a
site [91]. Mathematical optimization methods can be applied for
designing resource and cost optimal plants (e.g., by using super-
structures) or for identifying optimal operation strategies. Never-
theless, solving these problems robustly and in acceptable time
frames can be challenging.
3.3.2. Water-energy nexus
Water and energy use are interdependent. A large part of global
electricity consumption is used for the supply of drinking water and
for wastewater treatment [49,92]. This share is expected to increase
in the future, due to an increased need for desalinated water,
wastewater treatment and transfer of water over long distances.
The CO2 emissions can be decreased through efficiency improve-
ments or by using alternative energy sources, such as solar-
powered desalination plants.
Vice versa, water is used in power generation and fuel produc-
tion [49,92]. Conventional thermal power plants depend on the
availability of water (used as working fluid, cooling fluid, etc.).
Furthermore, some technologies discussed for decarbonization can
also be water-intensive [93]. Therefore, water scarcity in certain
regions should be considered in the design of the future energy
sector [94]. Strategies for recycling water need to be further
deployed and the use of water-intensive technologies avoided
when possible.
4. Challenges to overcome
All the aforementioned options for the decarbonization of the
sectors are subject to restrictions on the energy sector, which result
from environmental and economic aspects as well as human rights.
Sustainable development is often referred to as consisting of three
pillars: the social, ecological and economic. Yet instead of looking at
them as having comparable importance as has been the case before,
they are viewed as a series of embedded systems, as suggested by
and discussed in Refs. [95,96]. In embedded systems, the main
energy sector requirements are closely related and influence each
other. These are: (1) environmental sustainability (climate protec-
tion), (2) the security of energy (electricity) supply and (3) eco-
nomic stability. Any transitions in the energy sector should be
compatible with social needs while protecting the climate.
 E. Papadis, G. Tsatsaronis / Energy 205 (2020) 118025
4.1. Environmental sustainability
In order to reach environmental sustainability, it is imperative to
reduce CO2 emissions. Looking at the current energy sector envi-
ronmental protection and sustainability are only pursued as long as
environmental restrictions are in place, and only up to the
mandatory level. There has been no incentive to develop a sus-
tainable energy sector, since there is no monetary reward. Yet the
stressed environmental boundaries necessitate a shift towards
sustainability [97]. For a decarbonized energy sector, new in-
vestments are necessary to drive the shift from CO2 intensive
technologies to sustainable technologies. However, it is not easy for
investors to choose such options. Investments in the energy sector
are long-term decisions for technology options to be used for
several decades. Inconsistent and not elaborated climate policies in
most countries have created uncertainty and, as a result, investors
are concerned about the increasing regulatory risk [16,98].
Future energy demand forecasts rely on models that contain
uncertainties about forthcoming needs for installed capacity. The
model results vary broadly depending on the institution and the
considered scenarios. Improvements in efficiency would decrease
the final energy demand [17,49,99,100]; the electrification of other
sectors, however, will increase the electricity demand and, there-
fore, the total energy demand. This reveals a lack of a guided lead
for the design of the future overall energy sector.
To obtain environmental sustainability, the following challenges
must be addressed:
4.1.1. Investments in energy conversion systems
The investment in fossil fuels and consequently their exploita-
tion and combustiondespecially of coaldshould be decreased and,
if possible, eliminated. Permits for the construction of new coal-
and oil-fired power plants should not be issued in the future, if the
generated CO2 would be released to the atmosphere. The electricity
and heat generation from fossil-fired power plants should be
reduced. This requirement contradicts the economic planning of
many countries, which are highly dependent on the exploitation of
their natural resources, such as oil, gas, coal and on the exploration
of new reservoirs. Their incentives for leaving these resources in the
ground are low.
Changes in the market structure could lead to a situation in
which technical units are unable to earn money before the end of
their lifetime and thus become stranded assets [16,30]. This situa-
tion can be market-related or politically induced, for example in the
event of a phase-out of certain technologies. Stranded assets can
also occur in the renewable sector when, for instance, supporting
schemes expire. The concern over making (the right) investments
in the energy sector during an uncertain period can result in a
reduction of electricity or heat generation capacity and, in the worst
case, incapability to cover the demand.
Conventional fossil-fuel power generation entails a large
amount of running costs, such as fuel and maintenance costs, while
the capital cost usually has a lower share in the overall cost
structure. In contrast, low-carbon power generation technologies
have a high initial capital cost and low operating costs. This leads to
an increased importance of capital expenditures. Since renewable
technologies have zero marginal cost, they reduce the average
electricity prices. Renewables can, however, amplify market design
flaws, leading to negatively priced periods at times [101]. This calls
for well-designed and flexible electricity markets.
To attract investments in low-carbon generation, a consensus on
the framework of the transition towards sustainable investments is
necessary [47]. Policies which increase the predictability of long-
term cash flows as well as policies and components which pro-
vide a higher certainty about future prices for low-carbon
9
electricity can be steps in that direction [47].
4.1.2. Investment needs in developing economies
A high willingness to invest in RE technologies is seen in
industrialized countries. With low interest rates, robust credit
markets and very little currency risk, the conditions for in-
vestments are favorable. In contrast, developing countries have to
deal with high interest rates, less robust credit markets and high
currency risk, which make the conditions for investment less
favorable [47]. A comparison of interest rates in different countries
reveals a broad range with interest rates, starting close to zero (in
countries like Switzerland, Germany and Japan) and ranging up to
25% in countries like Yemen, Venezuela and Haiti [102]. The need
for large investments in developing countries is high and will
continue to increase with the growing demand for energy. The
main challenge is to overcome the capital scarcity in those markets.
55% of the globally estimated required investment will be in
developing countries in the next 15 years [47].
4.2. Security of electricity supply
The changing requirements on thermal power plants, the lack of
investment incentives and technical feasibility are seen as obstacles
that make it difficult to achieve a fast decarbonization while
ensuring electricity supply.
Power delivery is necessary on demand. Thermal power plants
based on fossil fuels are flexible and can easily adapt to demand.
They are, therefore, called load-following units. In an electricity
system the units are dispatched and operated in order to exactly
meet the demand. In present and future electricity systems,
covering the demand becomes more challenging than it has been in
the past, as the share of RE increases. Electricity generation from RE
is intermittent and cannot easily adapt to demand fluctuations,
which often results in a mismatch between generation and demand
[103].
In times of growing numbers of extreme weather phenomena
and more importantly longer cold periods with no solar/wind po-
wer generation, only flexible thermal power plants and (seasonal)
energy storage can bridge longer supply gaps resulting from
intermittent RE sources. A fast reaction to weather changes in order
to balance renewable generation calls for very accurate weather
forecasts, as well as highly flexible thermal power plants and ne-
cessitates frequent start-ups and shut-downs, faster ramp rates and
lower minimum load [103]. Increased thermal material stress due
to these factors calls for more robust, advanced materials, which are
still in early pilot-project stages or not cost effective yet.
In the case of fossil-fueled CHP plants, the heat demand must be
covered, even if there is no need for power. The necessary phase-
out of coal-fired power plants calls for alternative methods to
cover heat demand and for flexibility options like thermal storages
[68,103].
In Germany, with an expected phase-out of coal power plants
until 2038 [104,105], the gas-fired power plants will constitute a
bridging technology for the decarbonization of the energy sector.
They will probably undergo changes in their operation in the me-
dium term, which will result in a broader capacity utilization.
The coal phase-out plans of individual countries are not suffi-
cient; a global coal phase-out is necessary in order to reduce the
carbon intensity in the energy sector and to increase environmental
sustainability. The coal power plants could be replaced by natural-
gas-fired power plants with green gas substituting the fuel in the
long run. From an economic perspective, the phase-out could be
implemented via a forced phase-out or a market-driven phase-out,
through increasing CO2 prices or other incentives. The phase-out
should be accompanied by a deletion of the released CO2
10 E. Papadis, G. Tsatsaronis / Energy 205 (2020) 118025
certificates from the ETS. Otherwise this measure will contribute
little to decreasing emissions. In order to avoid a negative spill-over
effect from carbon leakage, the measures must be applied globally.
For a smooth transition, the system’s stability during integration
of large amounts of RE should be ensured, which can be accom-
plished through electricity or thermal (seasonal) storage, power-to-
X approaches, price responsive consumers and increased demand
side management measures in the long term [103,106]. For the
interim time, investments in gas distribution systems and liquefied
natural gas terminals can contribute. Besides sufficient electricity
and heat generating capacity, conventional power plants are
necessary to provide a certain amount of spinning mass (inertia)
[79]. Alternative systems need to be developed that can take over
the part of the conventional must-run capacities. Storage technol-
ogies can provide multiple ancillary services, such as electric en-
ergy time shift, supply capacity, black start, frequency regulation,
and spinning reserve. The technologies range from pumped hydro
storage, mechanical energy storage (compressed air, flywheel en-
ergy, cryogenic energy storage), to electrochemical (batteries) and
thermal storage (hot water or molten salt) [107]. Some storage
systems are still in the R&D phase, for example, adiabatic
cryogenic-based energy storage systems [108]. The drawback here
is the relatively low round trip efficiency [109]. Power-to-heat-to-
power concepts [110], where heat is stored in order to be used in
a thermal power plant, are also being investigated. However, they
are not very promising in part because of the low round trip effi-
ciency when a thermodynamically inferior energy carrier (heat) is
initially produced and then used to generate electricity. Although
standardized components are used in many cases, these systems
are not profitable under today’s conditions. Since decarbonization
is a global issue, the coupling of markets to enable and simplify
cross border trade of electricity will be indispensable [106]. Steps in
that direction are taken already, for example with the Clean Energy
Package of the European Union [111]. Nevertheless, more efforts on
a global basis need to be set into action. Grid expansion and in-
vestments in transmission and distribution networks are also
crucial [106,112].
Whichever way the decarbonization is structured and imple-
mented, major new investments will be required to meet global
and regional energy needs and secure the energy supply [47]. The
lack of investment incentives for flexible generation capacity is a
great challenge to securing electricity supply at all times, especially
when considering the simultaneous phase-out of certain technol-
ogies. For an increased flexibility in the market structure, in-
vestments need to be secured and economic viability ensured.
Finally, climate-friendly operation must become more economical
than climate-damaging operation through rewarding reduction of
CO2 emissions rather than subsidizing specific technologies.
New energy sector requirements raise issues regarding the
technical feasibility of the suggested options. The existence and
availability of materials determines which technologies can be
deployed in future energy systems. For example, rare earths are
used for digitalization applications, catalysts, and batteries,
whereas high-temperature materials are needed for combustion
chambers, heat exchangers and turbines. The technological readi-
ness of solutions needs to be given or be economically attractive, for
example for large-scale energy storage, hybrid vehicles, next gen-
eration biofuels, and finally, hydrogen technology.
The long duration of planning and construction of energy con-
version systemsdwith a time horizon of 5e10 years from the start
of planning to the start of operationdis often a high barrier for such
investments. It shows the need for an early transformation of the
energy sector, to prepare it for future requirements.
4.3. Economic stability
Next to environmental sustainability and security of energy
supply, the third dimension of the energy sector is economic sta-
bility. Economic systems need to serve human needs within the
boundaries of available resources [97]. Besides other needs, such as
water, food, income, education and safety, the need for energy is
fundamental for the well-being of humans.
Energy is supplied within the framework of current economic
conditions. However, focusing more on serving the socio-ecological
system and less on private profit can increase the sustainability of
the energy sector and drive decarbonization forward.
The impact of global economic activities needs to be determined
also on the basis of environmental repercussions and not only
growth in GDP. Perhaps the Human Development Index, which
includes education, life expectancy and per capita income [96,113],
expanded to include ecological factors would be a better metric of
the wealth of a nation. Economic activities within environmental
limits must be rewarded, while activities which stress the bound-
aries should face penalties.
When talking about economic stability we must also consider
political barriers that may exist during the deployment of innova-
tive technology options. This applies especially for options such as
transportation of electricity or fuels between regions with different
political systems. Guaranteeing the safety of energy supply is a
crucial issue for future energy systems and it can be more easily
achieved under stable political conditions.
The transition to a decarbonized energy sector will be very
costly. To satisfy the SDG Goal 7 of “affordable and clean energy”,
measures to compensate the investment intensive transition need
to be elaborated. Otherwise, consumers will bear a significant cost
burden on the way to reaching a sustainable, decarbonized energy
sector.
It should be noted that high energy costs to consumers are a
trigger for dissatisfaction and political instability as well as an op-
portunity for populistic parties in a democratic system to increase
their power and through their policies and actions to cause a
regression in the decarbonization progress. Therefore, all price in-
creases that will be unavoidable in the future in order to meet
decarbonization targets must be accompanied by measures to
lighten the economic burden on the population, particularly on
socially disadvantaged consumers.
4.4. Social aspects of transition and dilemmas
One crucial aspect of the decarbonization of the energy sector is
the socially compatible design of the process. A fair transition must
consider the changes in the economic structure of the affected re-
gions and ensure social and economic justice. The real cost for the
end user is, in that perspective, the most important aspect.
Psychological and cultural aspects can also represent challenges
for the transition [114]. Changes in energy use need a long time to
be accepted and require a major shift in mindset and culture. Cit-
izens must be directly involved in the processes and decisions. In
this way, aversion towards changes and the unknown can be
minimized. Strengthening education on technological and eco-
nomic aspects as well as increasing awareness for climate issues
need to become priorities. Aversion to certain technology types for
instance due to landscape interference (i.e. wind turbines), fear of
an increasing amount of blackouts and the concern of having to pay
for the transition are important issues which need to be addressed.
Public acceptance of various solutions must increase. This can be
achieved through the direct involvement of citizens, understanding
of the alternatives, campaigns and education. Decentralization can
also empower communities, as shown in projects where the
 E. Papadis, G. Tsatsaronis / Energy 205 (2020) 118025
municipal utilities repurchased the local (electricity and/or heat-
ing) grid from private operators.
More economically developed countries with stable and well-
functioning governments in place will provide technical solutions
and infrastructures in the coming years and in that way pave the
way for other regions. Communities in the global South, especially
in Africa, cannot assume leadership in these efforts. Yet their direct
dependency on agriculture and land use makes them severely
affected by climate change. This discrepancy needs to be addressed
by industrialized countries, keeping the historical responsibility in
mind. Otherwise, the migration of large population groups will
intensify.
5. Solutions and policies
Until now we see a failure to incorporate the cost of environ-
mental damage from GHG emissions in current regulations. The
application of existing mechanisms has proved to be insufficient,
which led to the redesign and reformation of some instruments
after the Paris Agreement (see Refs. [115,116]). Controlling the
emissions and surpluses on the market while setting and adapting
targets is definitely one step in the right direction.
The price for CO2 emissions has been very low for many suc-
cessive years in the past, resulting in a lack of effort and insufficient
pace towards decarbonization. This leads us to the question of
whether ETSs alone are enough to achieve the decarbonization of
the energy sector.
5.1. Emission trading scheme requirements
Today’s ETSs need to be adapted to flexible ones, but still they
cannot alone ensure the decrease of CO2 emissions. The quantity of
certificates in ETSs must be continuously re-discussed, excess cer-
tificates deleted and free certificates cut. Carbon leakage needs to
be monitored more tightly and, if possible, prevented. Further
sectors, like buildings, transport and agriculture, need to be
included in existing ETSs and combined with additional policy
packages. Finally, a minimum price for CO2 emissions should be
introduced.
5.2. Carbon pricing
An effective carbon pricing scheme could contribute to less-
ening CO2 emissions and thereby limiting the effects of climate
change while simultaneously fostering economic growth and
development according to the SDGs. It can trigger changes in in-
vestment patterns and technologies and drive the shift from coal to
gas within the constraints of existing capacity. A carbon tax can be
such an efficient way to raise revenues while encouraging lower
emissions [16].
There are several publications which give the magnitude of the
cost of the carbon tax. Back in the year 2008 Stern demanded a
carbon tax that could start in the range of around 20 to 40V/t CO2
for the year 2020 [36,117]. In order to continuously intensify the
efforts for decarbonization, the tax should increase, reaching values
around 120V/t CO2 in the year 2030 [118]. To achieve significant
CO2 emission reductions, further model-based analyses propose
significantly higher CO2 prices in the range of 330e380V/t CO2
[119,120]. In order to promote investment and innovation,
Edenhofer et al. [118] state the importance of setting the price in
advance. The German Environmental Agency states that the envi-
ronmental damage of 1t CO2 was 180V/t CO2 in 2016, increasing to
205 and 240V/t CO2 in 2030 and 2050, respectively [121].
The design of a carbon tax should be administratively simple. It
can be implemented using existing energy policy instruments (like
11
taxes and levies on energy sources). In order to consider learning
effects and technological evolution it should be adjustable and in-
crease gradually [100]. Taxing emission-intensive imports should
establish internationally fair competitive conditions. In order to
ensure broad public acceptance and to contribute to a fair society,
the carbon price should be socially viable. The income from the
carbon tax needs to be redistributed in the population, support
poverty reduction and education, foster development and reduce
other taxes [100]. It can also be directly used to support further CO2
reduction measures, like investments in renewables, and in emis-
sion friendly means of transport, renovation and refurbishment of
buildings, and public infrastructure.
5.3. Further measures and future work
Though carbon pricing is perhaps the most important option, it
is not the only solution. Effective planning ahead, by defining long-
term targets and short-term sector specific plans, can also
contribute to reaching the targets [16]. Individual countries and
cities need to develop decarbonization strategies. Well-designed
policy packages that will trigger the required changes are indis-
pensable, with measures such as carefully introduced targeted in-
vestment subsidies, performance standards and mandates,
communication and education campaigns and a CO2 tax for global
aviation and shipping [16]. Research on the socio-economic
dimension is necessary to provide further options on viable ways
of imposing a global CO2 tax.
Each country’s share in the total global CO2 emissions should be
considered to distribute the efforts among them in an equitable
manner. This is already stated in the Kyoto Protocol as “common
but differentiated” responsibilities of each party. The share of each
country’s historical emissions and the global use of products pro-
duced in China, India and the USA have to be considered for the
allocation. An exergoenvironmental analysis can assist in assessing
the environmental responsibility of each country [122]. From a
historical perspective, however, the industrialized countries have
emitted the largest part of CO2 and, therefore, have the obligation to
compensate. Following this, international policies and laws need to
be developed and implemented, which will bind the countries to
decrease the emissions and report their progress to the interna-
tional community.
More efforts in research and innovation are necessary. For
example, technologies and materials need to be developed further.
The broadness of the energy sector worldwide poses challenges
towards choosing the right methodology to evaluate decarbon-
ization effects. Mathematical modeling can be applied to holisti-
cally evaluate (a) the impact of different technology options, (b) the
appropriate magnitude of a CO2 tax on the global energy sector and
(c) the contribution of this tax to decarbonization. Finally, the ne-
cessity and benefits of energy system (and especially open-source)
modeling need to be highlighted. With the aid of these models, the
most economically viable solutions, considering the technical
constraints, can be determined and evaluated [19,123]. Robust
models with fast solving times, that are able to consider country-
specific market structures and social effects, are necessary. Fast
actions are needed to ensure these models are developed further
and support decision making.
6. Conclusions
In this paper we show that the decarbonization of the energy
sector is a very complex issue where many environmental, eco-
nomic, technical, social and political aspects need to be considered
simultaneously.
The current situation with respect to the decarbonization of the
12 E. Papadis, G. Tsatsaronis / Energy 205 (2020) 118025

energy sector is far from being satisfactory. We see the necessity of according to the long-term interest of humankind. Finally, we have
a turn away from an economy in which the energy sector provides to become more sensitized, attentive and thoughtful when it comes
inexpensive and very large amounts of energy and a society with to the consumption of food and products and to the use of resources
increasing inequality and towards an environmentally sustainable such as energy (electricity and heat) at home and in the office, as
and socially viable system. From the energy crises of the last cen- well as of means of transportation. We must change our behavior
tury we learned that when the energy prices increase the per capita and our habits. The sooner this happens, the better it will be for the
use of energy decreases, while the efficiency of energy systems and climate.
the creativity of scientists increase. Since we need these three ef-
fects (among others) to decarbonize the energy sector, we conclude Declaration of competing interest
that energy must become more expensive in the future without
causing political instability in the world. A carbon tax is one of the The authors declare that they have no known competing
most effective measures for moving in the desired direction. In the financial interests or personal relationships that could have
interest of a socially fair global transition, the affordability of energy appeared to influence the work reported in this paper.
prices for the society must consequently be guaranteed through the
redistribution of the largest part of the tax in the society. Providing Acknowledgments
both “clean and affordable” energy for all compels us to unite
environmental sustainability and social justice, while staying inside Parts of this work have been presented as keynote lectures at the
the social and planetary boundaries as defined by Ref. [97]. 32nd International Conference on Efficiency, Costs, Optimization,
There have been several studies that predict future de- Simulation and Environmental Impact of Energy Systems (ECOS 2019)
velopments in the energy sectors. Some of these studies “demon- in Wroclaw, Poland (June 23e28, 2019) and at the Qatar Sustain-
strate” how we can reach a complete decarbonization in some years ability Summit in Doha, Qatar (October 27e28, 2019). Financial
by making rough assumptions and ignoring (a) the technical diffi- support from the Federal Ministry for Economic Affairs and Energy
culties of decarbonizing aviation and certain industrial sectors (e.g., (BMWi), Germany, within the scope of the research project “DEK-
concrete and steel production), and (b) the fact that to house a ADE-F-W€ arme” with the project reference number 03ET4071A is
continuously increasing population on earth more concrete and gratefully acknowledged. Finally, the authors would like to thank
steel will be required. The danger is that decision makers decide to the three reviewers of this paper and Chrissa Tsatsaronis for their
delay action that is required today with the justification that, even if constructive comments that helped improve the quality of the
we start later, we can still achieve complete decarbonization in, for paper.
example, 50 years.
We do not believe that a complete global decarbonization can be Nomenclature
realistically achieved in the 21st century, although a plethora of
theoretical solutions is available today. The reasons for the authors’
assessment include the following: Abbreviations
CCU Carbon Capture and Usage
1. The capital required for investment and for establishing new CCUS Carbon Capture, Utilization, and Storage
infrastructures is very large. Besides climate change, govern- CCS Carbon Capture and Storage
ments must solve various issues associated with health insur- CDM Clean Development Mechanism
ance, payment of pensions in future, education improvements, CHP Combined Heat and Power
etc. The profitability of the required investments in the energy CORSIA Carbon Offsetting and Reduction Scheme for
area will not be very high at least in the beginning. This article International Aviation
was written before the corona crisis. The current pandemic and DHN District Heating Network
the associated indebtedness of almost all countries clearly ET Emission Trading
demonstrate the importance of this point. ETS Emission Trading Scheme
2. The energy sectors discussed above will compete for the GDP Gross Domestic Product
decarbonization options that are available today and priorities GHG Greenhouse Gas Emissions
need to be formulated. JI Joint Implementation
3. The environmental policies are often inconsistent. RE Renewable Energy
4. Political calculation, lobbying efforts, populism and corruption UNFCCC United Nations Framework Convention on Climate
often make the implementation of required policies impossible Change
or cause a regression in the decarbonization progress.
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