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.