Response to the ENTSO-E / ENTSOG TYNDP 2024 storylines

Ember welcomes this provision of a detailed demand dataset at the storyline stage of this TYNDP cycle, allowing a quantified assessment of the storyline assumptions and inputs.

In our opinion it is logical and appropriate to compute a single scenario for 2030 given the proximity and the greater clarity on EU targets. The inclusion of a 2035 snapshot is welcome because we agree with the ESABCC that the EU should produce a 2035 climate target (in  addition to 2040). This is also required as part of the EU’s next Nationally Determined Contribution (NDC) due in 2025. Furthermore, several critical climate milestones need to be achieved in Europe by 2035 to align with the Paris Agreement, with power sector decarbonisation being the most pressing. 

From 2040 onwards, it is insufficient to have only two storylines (deviation scenarios). European energy strategy decisions can not be (and perhaps never were) simplified into a dichotomy between distributed and centralised technology choices. The past two years have shown that global shocks can rapidly change Europe’s energy situation and political priorities, climate ambition included. It is our view that a scenario with increased climate ambition should be created. This scenario would explore the possibility of more transformative change in the energy system, and results in faster mitigation of emissions, reducing emissions by at least 90% by 2040 in line, with the ESABCC’s carbon budget advice.

At the very least, additional sensitivity analysis is needed beyond high and low growth scenarios. There are many sources of uncertainty in the future of the energy system, and these can only be robustly planned for using multiple scenarios combined with sensitivity analysis. As such, we recommend going beyond the Agency for the Cooperation of Energy Regulators (ACER) framework guidelines which require a qualitative risk assessment of each scenario (paragraph 27) by producing quantitative sensitivity analysis. Two input assumptions present obvious candidates for sensitivity analysis. Firstly, the price of gas, which is assumed to decrease on a smooth trajectory, but in reality is subject to volatility and shocks  (we note that ACER also recommends exploring higher gas scenarios in their opinion No 06/2022 on the draft TYNDP 2022 scenario report). While the price of gas is a key sensitivity, this should not become a driver to differentiate between scenarios, as Europe will continue to be exposed to international fossil fuel markets until fuel is phased out. Secondly the impact of weather extremes. As climate breakdown worsens, and the frequency of extreme heat waves and cold spells increases, each major scenario (storyline) should be tested for its resilience to these. This should cover, but not be limited to, the cooling requirements for thermal plants, the resilience of gas and power transmission, impacts on weather-dependent renewables, and the reaction in energy demand for heating or cooling. It is noted that scenario variants with higher carbon budget overshoot may be more vulnerable to these extremes, especially if the background storyline reflects a global failure to constrain emissions before mid-century.

Regarding the DE and GA storylines, in our view neither are fully self-consistent.

Firstly, a distributed vs centralised evolution of the energy system is no longer the principal axis of decision making. While Europe’s energy strategy can’t be simplified into any single binary choice, a more relevant axis for scenario definition (and decision-making) in view of recent geopolitical events would be domestic versus non-domestic sources of energy. It is noted that the existing storylines have been adapted to incorporate this but more could be done.

Secondly, a choice has been made to align a preference for distributed technologies with domestic energy production, and vice versa, a preference for centralised technologies with a more open attitude towards global energy trade. It is not clear why these two variables should necessarily be correlated. Centralised energy production can be domestic (large nuclear, offshore wind, large-scale solar, renewable district heating), and likewise a distributed energy system can still be reliant on non-domestic energy sources or material resources (imported solar panels, individual gas heating, imported small modular reactors). The alignment of the DE scenario with energy independence has created a counter-intuitive approach to offshore wind. This technology would play a huge role in a highly-domestic and highly electrified system, such as that described by the DE storyline. Yet, this technology is limited in the DE scenario compared to GA, presumably because it is classified as a centralised rather than a distributed technology. This is one example of a technology that could be further utilised in a higher ambition deviation scenario that prioritised a genuinely technology neutral approach rapidly mitigating emissions by 2040.

A risk-based approach to storyline development, where different types of risk are balanced across different storylines, would be a useful framework going forward. An approach that balances risk across storylines (including societal, technological and climate risk) would be more effective at exposing trade-offs and therefore better suited to addressing real strategic choices faced by decision-makers. This would facilitate infrastructure planning that has the best chance of delivering for likely futures while mitigating the worst risks in any single scenario.

Yes.

We commend the ENTSOs on the publication of data with the storylines (which was not the case in previous cycles) which is far more transparent and covers all sectors in detail.

Further steps could be taken to improve the accessibility and the quality of the datasets provided (such as a more intuitive user interface in the energy transition model). We have found multiple inconsistencies across the supply and demand datasets provided that have made it more difficult than it should be to analyse these scenarios.

The storyline report states that “ENTSOG and ENTSOE use a top-down methodology to identify and define contrasting political, societal and technology underlying choices – so called ‘high-level drivers’”. However, the Green Ambition driver is not used in this way. Rather than reflecting contrasting choices, only one set of climate targets is implemented (2050 climate neutrality and 55% GHG reductions by 2030). As a result of these constraints, in previous TYNDP cycles it has not been possible to remain within a Paris compatible GHG budget by 2050 (by the ENTSO’s own measure) without significant overshoot. We believe that contrasting choices should be applied to this driver in the form of a storyline that more rapidly mitigates emissions after 2030, minimising the carbon budget overshoot. Such a variant would simultaneously minimise climate risk and the technological risk that is implicit assuming that large-scale negative emissions can be deployed post-2050. These risks associated with carbon budget overshoot have been chronically under-appreciated by previous TYNDP cycles. A higher ambition scenario would anticipate a 2040 climate target between 90-95% emissions reduction, as recommended by the ESABCC, and align with the expert consensus that power sector decarbonisation must be achieved in the 2030s.

The other drivers are logical and useful. As mentioned in our response to question 1, the driving force of the transition is no longer predominantly a question of centralised versus decentralised, but domestic versus non-domestic. The problem with the existing storyline development framework is not with the choice of drivers, but how they are combined into only two variant storylines using correlations between the drivers which are not fully explained or justified. This leads to inconsistencies within storylines. For example, it is not clear why the combination of drivers for the DE scenario would lead to a lower deployment of offshore wind (see answer to question 4). Two examples are offshore wind and hybrid heat pumps. Similarly, in the GA scenario it is not clear why the combination of drivers result in a stronger market for hybrid heat pumps over more efficient pure-electric alternatives.

7

No.

If you selected No, please explain:

Heat pumps

Pure-electric heat pumps are set to become the dominant technology for individual (non-networked) heating systems. However, conventional/fossil technologies (methane, oil, and hybrid heat pumps with methane) still supply a significant share of households in 2050, averaging 9-10% across all countries. In our view, it is difficult to justify such a prolonged use of methane (especially fossil) for low-temperature heating in either scenario, especially DE, given the carbon neutrality constraint and the maturity of electric heat pumps. In our view, pure-electric heat pumps should fully supply non-networked space heating and hot water to buildings by 2050 in the DE scenario, and a much higher share in the GA scenario. Related to this, the need for hybrid heat pump systems is overestimated. Hybrid systems account for a small share of sales today. The word ‘hybrid’ appears only eight times in the IEA’s flagship Future of Heat Pumps report, and it is noted that their uptake, while justified in some specific circumstances, would hamper the full decarbonisation of buildings. Despite surging sales across Europe, the upfront cost of heat pumps is identified as a major deterrent to their uptake by the European Heat Pump Association. It follows that the even higher cost of hybrid systems (two heating systems in one) would create an even larger deterrent. It is recommended that the ENTSOs remove all fossil/methane heating systems from at least one scenario by 2050. In addition, they should provide further justification for the use of hybrid systems, including the specific circumstances in which they represent a more economic and secure option for consumers in comparison to pure electric systems. In the case of buildings with large heating demand or low-efficiency, it should be explained why pure electric solutions, considering likely advancements in technology, still could not deliver sufficient heat. 

Battery electric vehicles

Electrification of transport can go further in the DE scenario, particularly in cars, buses, and trucks. Clean hydrogen will be an expensive and limited commodity which should be prioritised to decarbonise end-uses without alternative options. The average national share of electric cars in the DE scenario in 2050 is 91%. This would be closer to 100% in a scenario that truly prioritised distributed, electrified technologies. The electrification of heavy duty vehicles, especially buses, is accelerating globally. In Europe, all-electric buses accounted for 6% of sales in 2021, second only to China with a 26% share (IEA). BloombergNEF forecast that half of the world’s bus fleet will be electric by 2032. Battery electric bus sales in Europe already dwarf fuel-cell electric sales, 4150 vs 99 in 2022. It therefore appears pessimistic and in defiance of these trends that the average share of electric buses is only 50-65% in GA and DE scenarios in 2050, while an average of 25% of buses are powered by gas in the supposedly highly-electrified DE scenario. It is even harder to explain why a significant share (around 5-12%) of heavy-duty vehicles still run on methane in both scenarios in 2050, especially if this is fossil methane. Even if this is biomethane, it is unlikely this will be competitive with the electric alternative. We recommended that both scenarios take into account the latest technological trends and market data on the growth in battery electric heavy duty vehicles and ensure fossil gas is completely phased out of this subsector by 2050 in all scenarios.

Ember considers the technology costs to be reasonable and the sources sound. However, there are cases where the costs for a technology are higher in 2050 than in 2030. This appears to be due to an error in the GA 2050 figures. The numbers seem to be incorrectly linked to the Best Estimate 2040 figures, as opposed to those for 2050 (while the 2050 DE figures are correctly linked to the 2050 Best Estimate values). It is unrealistic that costs in 2050 (in real terms) would be higher than those in 2030 or 2040. This should be a check applied to all technologies across the scenarios.

Ember notes that technology costs for generation technologies with CCS are absent from the data sheet. Given that the integration of CCS is a key defining feature of GA, this is considered to be a major exclusion from the public consultation.

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No.

If not, please provide us an alternative source (should be reliable and cover 2050 time-horizon):

Due to the approach adopted, extra-EU hydrogen imports have been maximised. Ember disagrees with this approach to determine maximum potentials for fuel imports as it is considered incompatible with the EU’s priorities of energy independence, especially following Russia’s invasion of Ukraine.

Ember also considers the high value of potential hydrogen imports from Ukraine to be unrealistic in the near term (2030) and a risky assumption in the longer term, particularly when this makes up almost 25% of the total import potential.

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If you selected No, please specify:

Ember notes that the figures in the tab “EU” do not match those in the tabs “DE Total” and “GA Total”. For the purposes of feedback provided on the draft storylines, it was assumed that the figures in the latter two tabs are correct and those in the “EU” tab incorrect.

No. 

If you selected No, please specify:

The degree and style of difference between the storylines appears to have remained relatively consistent with the TYNDP 2022 storylines, except on hydrogen (difference between GA and DE more pronounced), solids in 2040 (GA much higher, whereas previously no difference), and liquids in 2050 (difference was more pronounced in TYNDP 2022 but now there is almost no difference).

Ember welcomes the stronger differentiation in scenarios, particularly regarding hydrogen which is one of the energy carriers that is perhaps most crucial for evaluating electricity and gas infrastructure (the stated primary purpose of the TYNDP scenarios). However, the split between imported hydrogen and domestic production appears inconsistent with the storylines. GA is understood to continue to see a role for imports, and the draft figures on hydrogen demand show that imports provide 51% of the supply in 2040 and 49% in 2050. One would expect that imports in the DE scenario, which prioritises energy independence, to be far lower; however, imports make up 45% of supply in 2040 and 40% in 2050. This is considered to be inconsistent with the storyline and, particularly in light of the recent energy crisis which prompted the EU’s push towards reducing import dependencies, Ember urges the ENTSOs to reduce the portion of imported hydrogen in the DE scenario.

Ember expresses significant concern that the difference in electricity demand between the two scenarios has remained negligible – just over 10% in 2040 and 2050 – and the difference in methane demand has actually reduced compared to the TYNDP 2022.

Furthermore, the draft TYNDP 2024 storylines sees a 38-50% (GA and DE, respectively) reduction in methane demand between 2015 and 2040, a far cry from what is likely needed for the EU to remain within its greenhouse gas emissions target (expected in 2024). Ember urges the ENTSOs to increase the divergence between the two scenarios, where one sees comparatively higher levels of electricity demand and lower demand for methane. This would better allow an assessment of trade-offs between different pathways while also anticipating the upcoming EU 2040 greenhouse gas target.

Ember expresses concern that the input data for the hydrogen reference grid is directly and exclusively taken from national gas TSOs. This approach lacks transparency and legitimacy. Indeed, the resulting costs of the hydrogen candidate projects are likely to be underestimated, with the highest CAPEX being only €81.1 million and an average of less than €15 million.

Ember considers that splitting the CAPEX between repurposed and new hydrogen pipelines with a split of 75% to 25%, respectively, creates an unrealistic bias in the modelling and results in favour of hydrogen pipelines.

No. 

If you selected No, please provide an alternative source:

First, while Ember continues to commend the transparent definition of a carbon budget in the TYNDP, it remains unclear if and how this constrains the scenarios and impacts planning. We strongly urge the ENTSOs to incorporate stricter enforcement of the carbon budget into the storylines and scenario development. At the very least, the full implications of a carbon budget overshoot should be explored and presented transparently.

Second, we disagree with the extrapolation of the carbon budget until the year 2100. While it is theoretically true that negative emissions can recover the overshoot post-2050, such a strategy will have significant implications for infrastructure planning pre-2050, and could increase climate-related risks. While the transparent reporting of the carbon budget overshoot in previous editions of the TYNDP was welcome, stronger constraints should be introduced to limit gross emissions between 2030 and 2050, and hence budget overshoot. This could be done in at least one deviation scenario, or a separate higher ambition scenario. Where a significant carbon budget overshoot is still permitted, the ENTSOs should expand fully in the final TYNDP report on the consequences for infrastructure both pre and post-2050.

Furthermore, Ember is disappointed to note there has been a minimal change in total fossil demand between the TYNDP 2022 and TYNDP 2024 (draft), implying that we can again expect a significant overshoot of the carbon budget before 2030 in both scenarios. This appears incompatible with the alignment of TYNDP scenarios with the Europe Climate Law and the upcoming 2040 greenhouse gas target.

Not Answered. 

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If not, please provide us an alternative source (should be reliable and cover 2050 time-horizon):

It is unclear from the slides provided whether a portion of the fleet or all EVs are considered to be V2G enabled and from what date this technology is considered to be functioning. Additionally, it is unclear if all vehicles/ charging stations are equipped for smart charging. These two elements have significant implications for demand side flexibility and peak demand. Therefore, Ember urges clarity on these points in the final storylines report.

EV charging patterns should be explored which provide greatest synergies with the power system, in anticipation of incentives to improve power system flexibility and limit the use of fossil fuels for power generation.

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5

No. 

If not, please provide us an alternative source (should be reliable and cover 2050 time-horizon):

It is unclear why hybrid heat pumps should be anything more than a marginal technology and therefore the development of a specific methodology is a wasted effort.

Not Answered. 

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