Updated policy pathways for the energy transition in Europe and selected European countries. Deliverable 7.3 MUSTEC project

In a decarbonised future electricity system, Europe will rely on fluctuating renewable sources, such as solar PV and wind power, to a much larger extent than today. This means that Europe as a whole and each individual country on the continent must increase the availability of flexibilityoptionsin order to balance the grid. Such flexibility options include dispatchable renewable sources (e.g. concentrating solar power (CSP)with thermal storage), electricity storage, anddemand-response. We start from the notion that the future does not happen, but it is madeby a series of policy decisions between now and then. If this is true, then the electricity system of 2050 is determined by the sum of all policy decisions affecting the power system – the policy pathway – in all legislations in Europeuntil 2050. In this report, we take the first steps towards identifying the potential future role for dispatchable renewables – specifically CSP with thermal storage – as a function of policy decisions that either increase the need for power system flexibility (e.g. fluctuating renewables) or provide flexibility (e.g. storage, dispatchable renewables, flexible demand). We draw on the energy transition logics framework developed by Foxon and colleagues. This framework poses that the space of possible energy transition pathways is a triangle with three distinct policy logicsin its corners: a state-centred logic, in which the central government leads or carries out the transition; a market-centred logic, in which the government sets the framework but leaves all other decisions to market actors; and a grassroots-centred logic, in which the transition is carried out locally with the resources available to each community. Any transition strategy will consist, in some constellation, of policies from these corner. We investigate policy strategies in France, Germany, Spain, Italy, Switzerland and of the European Union as a whole. For each case, we define one dominant pathway, consisting of currently valid, implemented policies of the current (or newly resigned) government. In addition, we identify up to three minority pathwaysfor each case, describing the energy policy visions and strategies of parties that are currently in opposition but could form a government in the future. For each case, we identify pathways representing each of the three logics, bothin narrative formand as a set of 41 quantitative variables affecting the need for and provision of power system flexibility. This report is a primary data source for the power system modelling in the MUSTEC project. This modelling will happen in 2019 and 2020, and will bring detailed, quantitiave insights of how the potential role for dispatchable renewables is affected by energy policy decisions. However,from the data we have derivedhere, we can draw a number of conclusions. We show that all countries and the EU as a whole seek to strongly decarbonise their power systems, as a key part of economy-wide decarbonisation efforts. Some countries have plans that would suffice to fulfil the European (Union and national) commitments under the Paris Agreement: net-zero emissions, mainly or exclusively based on renewables. We also show that all countries seek to vastly expand intermittent renewables, which will trigger a greatly increased need for flexibility. However, this is not reflected in the policies we analysed: no pathway, dominant or minority, is specific on how they want to provide flexibility, especially not at the scale and pace needed. This problem will be exacerbated as the climate targets are tightened and fossil fuels – first coal and lignite (mainly in the 2020s) and later gas power (especially in the 2040s) – are phased out: once this happens, the European power system(s) will lose much of its current flexibility, and unlessother, carbon-free flexibility options are expanded, it will be increasingly difficult to maintain power system stability.