Decarbonisation of Europe’s power sector – some considerations

Author: Thomas Sattich

In October 2009, the European heads of state and government agreed on an ambitious long-term climate policy objective in order to prevent dangerous anthropogenic interference with the climate system and to ensure the European Union (EU) plays its part in limiting global temperature increases to 2°C. Moreover, European policy makers decided to bring the European Union on a demanding decarbonisation path, with the  objective to reduce greenhouse gas (GHG) emissions by between 80 and 95 per cent by 2050, as compared to 1990 levels.

Many decisions taken today influence the EU’s ability to meet these goals. Energy policy is one of the main fields in this regard, as decarbonisation of Europe’s economy in only a few decades implies a major and swift transition of Europe’s energy sector in order to reach almost zero GHG emissions from energy production, transportation and consumption. The electricity sector plays a particular role in this regard, as renewably-generated electricity has to a large extent replace fossil fuel consumption according to the decarbonisation plans.

EU’s energy transition in a nutshell

A look at different reference values of Europe’s energy system reveals remarkable shifts and trends. Most importantly the, the mix of energy carriers which supplies industry, utilities, transport and households with necessary fuels, is in flux and seems to indicate an on-going transition from carbon-based (e.g. coal, gas) to renewable sources (see Fig. 1). If this trends continues, renewables might soon cover a significantly higher share of Europe’s energy mix and deliver a main part of the energy necessary for daily life and business (Commission 2011:5). Increasing depletion of indigenous oil and gas reserves might foster this process.

The greenhouse gas emission intensity of EU’s energy system is following this development and fell of about 9 per cent over the last decade (see Fig. 2). Power generation, distribution, and consumption stands in the centre of this development, as many indicators suggest stronger electrification across the end-use sectors like industry, transport and buildings (Sugiyama 2012). In this segment of the energy system renewables grew of about 70 per cent over the last decade (see Fig. 3). In sum renewables today account for about 20 per cent of electricity generated, which equals the burning of about 409 million barrels (65bn litres) of crude oil (Share of electricity generated from renewable sources in the EU-27 (2011): 20.44 per cent = 670344.108 GWh = 57639218.229 toe = 409.814.841,61 barrel of oil equivalent = 651.553.551.68 l of crude oil (data: Eurostat)) or 4.5 times the world’s daily oil production (BP 2013:8).

Hence, a cursory glance at the EU level might suggest a successful decarbonisation policy. Moreover, figures seem to indicate a relatively smooth integration of renewables into the power system, with no interference of the newly introduced RES power stations with the overall capability of utilities to uphold supply (see Fig. 4 and 5). Yet the trends which seem to underpin such an inference have to be treated with great caution. In fact a deeper analysis shows that Europe’s energy transition is about to enter a new phase in which the rapid growth of renewables and the relative decline of conventional energy sources will probably meet serious constrains (Commission 2013:2).

Greenhouse gas emissions intensity EU-27

The inclusion of RES plants (RES= Renewable Energy Sources, e.g. wind farms) into the existing power system and the alignment of the given infrastructure to their operation is one of the most significant of these constrains. At the bottom of this assumption are some characteristics of renewable energy (see below), which run contrary to the inherited logic of the power system. Further  recourse on renewables therefore will be more than a mere replacement of old power plants, but imply a significant reorganisation of the established system of power generation, distribution and consumption.

Further increase of renewables will hence be constrained by the fact that such a policy  can only partly rely on the established structure of the power system, because the latter is designed for the characteristics of the still largely dominant conventional plants (These include carbon-based power stations (e.g. coal, gas, oil) as well as low-carbon or carbon free plants (e.g. hydro, nuclear).) and not for the operation of some (but not all) forms of electricity generation from renewable sources. The necessary transformation of the power system therefore does not stop at the construction of new power generation units, but implies the necessity to adapt the environment in which these units operate.

Fig. 3: Share of electricity generation from renewable sources in the EU-27 (per cent, data: EUROSTAT)

Yet as the European level in many respects is only the thinnest layer of Europe’s energy system, these constrains for the integration of renewables into the power system mainly relate to the national, not the EU level: Due to limitations in the cross-border power transmission infrastructure, unsolved regulative and technical provisions and the particular nature of electricity as a commodity, lead to a situation where the overwhelming proportion of power is generated and consumed on a national (and subnational, regional) basis: Exchange between the different national systems varies between 7 and 10 per cent and can therefore be described as limited (see Fig. 6).

But even though the cross-border exchange of electricity is still very limited (as are the means of EU-level policy making when it comes to energy), it is nevertheless of great importance for the integration of renewables and will play a key roles in the transformation of the European power system. The question is, how and where decarbonisation (i.e. the increase of renewables) concerns cross-border issues, how the EU could intervene, what measures actually have been taken and envisaged, and whether these are effective and sufficient.

In order to answer these questions, the following section attempts to determine the relation between the integration of renewables into the power system and cross-border power transmission infrastructure in Europe. Regardless of the details, it is obvious that this issue is of great relevance, since it is not only concerns the attempts to decarbonise Europe’s energy system, but touches national sensitivities. Because of it’s strategic relevance, policy makers have to treat the issue of cross-border power transmission with great care when deciding and implementing further decarbonisation initiatives.

Fig. 5: Excess generation in the European Union (per cent; data: ENTSO-E)

Conventional electricity generation, renewables and cross-border power transmission

The existing system of power generation, transmission and consumption is largely defined by so called conventional power plants; these have two main characteristics: Dispatchable generation on the one hand, and centralized generation on the other. Whereas the first item describes the capability to adjust the power output to the system’s varying demand,[1] the second refers to the limited number of central plants which provide the electricity for a (geographically) defined part of the power grid. In both regards some aspects of renewables runs contrary to the logic of the system in which they are supposed to operate;  their integration into the existing power system therefore does not only imply the phase-out of old power plants and their replacement with new ones, but the reorganisation of large parts of the power sector, which is very demanding[2].

By and large the necessary reorganisation process to accommodate large numbers of renewables is defined by the weight of conventional, carbon-based electricity generation plants in the existing system on the one hand, and the specific requirements of power generation from renewable energy carriers on the other. But whereas a definition of the first is relatively easy[1], the term renewables is rather vague description for the true spectrum of technologies which it encompasses.[2] Yet the different forms of renewables impact the power system in very different ways when it comes to dispatchable and centralized generation. Clarity therefore is vital for any further analysis.

For one thing, not all forms of power generation from renewable sources rely on the combustion of energy-rich materials: Only about six per cent of power generation from renewable sources in the EU relies on combustion, with biogas, bioliquids and biomass as energy carriers (see Fig. 6). Regarding dispatchable generation, these should fit relatively well with the established power system, as their output can be controlled and their use should only require slight adaptations of the infrastructure in place. The combined combustion of coal, gas and biomass in modern power plants, or the utilization of the local gas distribution networks  are good example in this regard.

Yet the rest of renewables accounts for forms of power generation, where combustion no longer is the driver of electricity production: Wind, solar and hydro power are the main examples in this respect. In these cases the combustion of carbon-based energy carriers is replaced with wind flows, water streams and solar energy to drive power generation, which is why these forms of electricity do not emit greenhouse gases. This may be the intention behind their introduction into the power system; however, the carbon-neutrality of these technologies comes with a price, as these alternative forms of power generation are not to the same extent dispatchable as conventional (carbon based) power plants.

Put differently: Since the energy which drives these renewables is difficult or impossible to control and varies largely over time (see Fig. 7), the resulting power output equally varies and hardly ever coincides with the momentary demand. Because of the strong variations of wind-, solar- and hydroelectricity, these forms of power generation are therefore also labelled intermittent renewables. But again, there are differences: Whereas (pumped) hydropower stations with a reservoir (hydroelectric dams) are dispatchable by means of the water stream passing through the plant,[3] the same is much less given in the case of tidal, wave and ocean power, where the passage of water is much more difficult to control.

Fig. 6: Share of power generation from renewable sources in 2011 (data: EUROSTAT)

Regarding dispatchable generation, the characteristics of (pumped) hydropower (with reservoir) therefore equal those of conventional carbon-based electricity generation units; its historic role in the power system proves that. The same is, however, not true for other forms of hydroelectricity such as ocean power (see above). But the latter only play a minor role in the power system. The intermittency of wind and solar power otherwise represent one of the main main challenge for the large-scale integration of renewables into the power system, as they can be only insufficiently dispatched to the need of grid operators.

According to the International Energy Agency (IEA) and the European Commission, network balance is considered to be in jeopardy if intermittent renewables exceed 5 per cent in the power system. Whereas the existing power system does not face balancing problems with less than 5 per cent intermittent renewables, more than 5 per cent of wind, solar and intermittent hydropower require measures to ensure grid stability (Commission 2012:8). Yet in 2011 intermittent renewables already amounted to 35 per cent of electricity from renewable sources generated in the EU-27 (compared to 9 per cent in 2002). By 2020 this figure will rise to 49,7 per cent (ECN 2011:14, see Fig. 7).

Fig. 7: Share of intermittent and non-intermittent renewables in the EU (per cent; data: EUROSTAT; 2015, 2020: calculated capacity; data: ECN)

Intermittent renewables therefore already represent about 7 per cent of all electricity (renewable and conventional) generated in the European Union. According to observable trends and the existing national renewable energy action plans, this figure  will rise to about 17-20 per cent by 2020. Without a sufficient infrastructure which provides the power system with the necessary capacity to counter and equalize the erratic ups and downs in the grid caused by intermittent renewables, the further decarbonisation therefore will soon meet serious constrains.

The importance of this growing intermittency in the power system due to increasing numbers of renewables can hardly be overstated, as it not only will progressively disrupt the balance of generation and consumption on the local level, but is also highly relevant for the issue of cross-border power transmission (see below). But there is no one-off measure to tackle the growing intermittency, the actions to be taken will thus include all levels of the power system such as electricity markets, transmission infrastructure and generation. In sum these measures have to provide the system with enough capacity to compensate for the enormous variations of intermittent renewables.

Fig. 8: Wind power generation in Germany, 2012 (source: Fraunhofer Institute; data: EEX)
Fig. 8: Wind power generation in Germany, 2012 (source: Fraunhofer Institute; data: EEX)

Flexible generation (to cover periods of low RES production), storage facilities (to take up RES generation surplus) and power markets which enables the immediate reaction of consumers to the current generation of electricity are the corner stones of this idea. The power distribution and transmission infrastructure interlinks these different parts of the power system; new investments in the grid are therefore widely believed of being vital to achieve the necessary increase in the flexibility of the entire system and hence play an important role in the decarbonisation process.

The adjustment of the grid infrastructure is closely related to the geographical distribution of intermittent RES generation in the power system. In this regard the transition from (carbon-based) conventional to renewables not only results in greater intermittency of electricity generation, but changing locations of the power generation plants: Whereas conventional utilities in most cases are designed as central units which provide the electricity for a large part of the power grid, renewables mostly follow a different approach, with numerous generation dispersed over large territories.

The differences between the two approaches are considerable and do not only relate to intermittent renewables, but with the exception of hydropower all forms of RES electricity generation. Further increasing numbers of renewables therefore imply the necessity to construct new power lines in order to channel the electricity to the consumer. And since the location of new, decentralized renewable generation units on the one hand, and centralized conventional plants on the other can vary greatly, this implies major investments into the power grid.

Yet stronger interconnection is not only supposed to connect RES plants to the power system, but is also expected to provide the system with the needed capacity to react flexibly to the ups and down caused be intermittent renewables. This approach follows three different assumptions:

1) New power lines could connect the power generation with storage facilities such as pumped hydro or power to gas facilities (and these with consumption centres);

2)   together with smart metering and flexible market models an advanced distribution grid could enable the flexible reaction of consumption to changes in the power output;

3)   new power would provide the power system with  more capacity for exchange between different regions with excess electricity/low consumption on the one hand, and such with (currently) low generation/high consumption (or available storage). The more distant the interconnected regions are, and the more efficient electricity transmission, the better the absorption of variations in the grid.

A reorganisation of the power system according to these three assumptions would cover the local, regional, international level alike. With regard to the European dimension, the third seems to be of particular importance, as the still largely national structure of power grids in Europe make more cross-border exchange capacity a convincing but largely untapped possibility for more exchange and network stabilization. The integration of ever growing numbers of intermittent renewables could therefore result in a deeper integration of the European power sector.

Ideas for such a policy are far reaching and include overlay networks  of transcontinental (the ‘super grid’) or regional scope. The per area generation of intermittent electricity (see Fig. 8) is an interesting figure in this regard, as it reveals sharp differences between the single EU member states: Whereas some countries show only a moderate density of wind, solar and tidal power and intend to keep their numbers limited according to the national action plans submitted to the European Commission, others decided to integrate large numbers of these plants into their systems.

Fig. 9: Calculated per area generation of intermittent electricity (solar, tidal, wind), MWh/km² (data: ECN)

With the density of intermittency, the need for deeper interconnection varies – not only on the national but also the European level. It seems therefore certain that the costs and benefits resulting from a policy to increase intermittent renewables by deeper grid integration would be unevenly distributed among the different member states involved (Sattich 2014); any initiative in this direction – be it national or European – therefore demands great sensitivity towards possible economic, technical and political side effects, with the latter as potentially one of the most  serious constrains for any further increase in intermittent renewables in the European Union.

References

BP (2013). BP Statistical review of world energy 2013. London: BP.  http://tinyurl.com/ozfea2d. Accessed: 24 October 2013.

Desbrosses, Nathalie (2012). Understanding the electrification of industrial energy consumption in europe. Leonardo Energy. 02 July 2012. http://www.leonardo-energy.org/understanding-electrification-industrial-energy-consumption-europe. Accessed: 18 October 2013.

Commission (2011). Executive Summary of the impact assessment. Energy roadmap 2050. Commission staff working paper. Accompanying document to the communication from the commission to the european parliament, the council, the european economic and social committee and the committee of the regions. SEC(2011) 1566 final. Brussels: European Commission.

Commission (2012). Renewable energy: a major player in the European energy market. Communication from the commission to the european parliament, the council, the european economic and social committee and the committee of the regions. COM(2012) 271 final. Brussels: European commission.

Commission (2013). Renewable energy progress report. Report from the commission to the european parliament, the council, the european economic and social committee and the committee of the regions. COM(2013) 175 final. Brussels: European commission.

ECN (2011). Renewable energy projections as published in the national renewable energy action plans of the european member states. Covering all 27 eu member states with updates for 20 member states. Petten: Energy research centre of the netherlands ECN & European environment agency.

ECN (2011). Renewable energy projections as published in the national renewable energy action plans of the european member states. Summary report. Petten: Energy research centre of the netherlands ECN & European environment agency.

Sattich, Thomas (201). Germany’s energy transition and the european electricity market: Mutually beneficial? Journal of energy and power engineering, forthcoming.

Sugiyama, Masahiro (2012). Climate change and electrification. Energy Policy, 44(5), 464-468.

WEC (2011). Global transport scenarios 2050. London: World energy council.


[1] Centralised, dispatchable power generation units, combusting carbon-based energy carriers – principally coal, lignite, natural gas and petroleum products – to drive turbines and generators.

[2] In this regard renewables are similar to conventional plants, which also rely on a broad variety of fuels to produce electricity such as carbon-based, nuclear or hydro energy.

[3] The limited is the available water in the reservoir, which may vary between the different seasons of the year.


[1] Typically the power demand varies significantly between night and day, over the days of the week and the different seasons. Generation has to be adjusted in real time to avoid blackouts (overcharge) or brownouts (voltage drop).

[2] Others would say problematic.

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