Impact of CO2 prices on the design of a highly decarbonised coupled electricity and heating system in Europe

Abstract

Ambitious targets for renewable energy and CO 2 taxation both represent political instruments for decarbonisation of the energy system. We model a high number of coupled electricity and heating systems, where the primary sources of CO 2 neutral energy are from variable renewable energy sources (VRES), i.e., wind and solar generators. The model includes hourly dispatch of all technologies for a full year for every country in Europe. In each model run, the amount of renewable energy and the level of CO 2 tax are fixed exogenously, while the cost-optimal composition of energy generation, conversion, transmission and storage technologies and the corresponding CO 2 emissions are calculated. We show that even for high penetrations of VRES, a significant CO 2 tax of more than 100 e/tCO 2 is required to limit the combined CO 2 emissions from the sectors to less than 5% of 1990 levels, because curtailment of VRES, combustion of fossil fuels and inefficient conversion technologies are economically favoured despite the presence of abundant VRES. A sufficiently high CO 2 tax results in the more efficient use of VRES by means of heat pumps and hot water storage, in particular. We conclude that a renewable energy target on its own is not sufficient; in addition, a CO 2 tax is required to decarbonise the electricity and heating sectors and incentivise the least cost combination of flexible and efficient energy conversion and storage.heating sectors in Europe. The annual end use demands in both sectors are similar: electricity consumption in Europe in 2015 accounted for 2,854 TWh el (in terms of electricity), while the heating demand in the residential and services sectors represented 3,562 TWh th (in terms of thermal energy), [5]. Regarding greenhouse gas emissions, electricity and low-temperature heating accounted for 1066 Mt and 556 Mt of CO 2 emissions respectively [6]. Previous energy models applied to different regions [2,3,[7][8][9] have shown that imposing a strong CO 2 constraint leads to high Variable Renewable Energy Sources (VRES) penetrations combined with a high-efficiency sector-coupled energy system, referred to as 'Smart Energy System' by Lund and coauthors [4,8]. For instance, under a 95% CO 2 reduction constraint relative to 1990 in Europe [10], energy modelling approaches based on scenario comparison [8] or cost optimisation [2]

The role of storage technologies throughout the decarbonisation of the sector-coupled European energy system

“…The adjective 'gross' indicates that γ i is calculated based on the energy that can be potentially generated, that is before curtailment, and including onshore and offshore wind as well as solar photovoltaics. This 'weakly-homogeneous' constraint was proposed in [13] and used in [19], but it should be mentioned that it was not included in the implementation in [17,18].…”

“…The model used in this paper is the PyPSA-Eur-Sec-30 whose code was used in [17][18][19] and can be accessed through the repository 10.5281/zenodo.1146666. Moreover, additional code to plot the figures is available at github.com/martavp/PyPSA-plots.git.…”

Impact of climatic, technical and economic uncertainties on the optimal design of a coupled fossil-free electricity, heating and cooling system in Europe

“…It depicts a plausible future scenario where the European countries need to be relatively self-sufficient in terms of renewable supply. The same constraint is imposed in [8], but not in [4]. A fossil-free system allows consuming synthetic gas only after it has been produced, via power-to-gas where direct air captured CO 2 (DAC) and electrolysed hydrogen are combined to produce methane.…”

“…In this paper, we investigate how changes in climatic, technical and economic assumptions affect the design of a future fossil-free energy system in Europe. The large seasonal variation in heating demand is one of the challenges for the decarbonisation of this sector [8]. However, future heating demand could be significantly impacted by climate change, savings due to building retrofitting, and demand-side management strategies.…”

“…In [8], we focus on the role of CO 2 prices for a highly decarbonised coupled electricity and heating system in Europe. We find out that not only a renewable target is necessary, but also a CO 2 tax is required to incentivise the cost-optimal system configuration.…”