Pathways for the North European electricity supply

Journal article, 2009

This paper investigates the development of the electricity-supply systems in Northern Europe (Germany, UK, Denmark, Finland, Sweden and Norway) until the year 2050. The focus is on the response to an assumed common stringent CO2-reduction target and on the role of carbon capture and storage technologies (CCS). Special emphasis is put on turn-over in capital stock, timing of investments and the infrastructural implications of large-scale introduction of CCS. The analysis is carried out through scenario analysis with the aid of a techno-economic model, in which a case including CCS is compared to a case excluding this option. The phase out of the present capital stock (power plants) is included from the Chalmers energy infrastructure databases, which gives information on present and planned power plants down to block level for plants exceeding 10MW net electric power. Assuming technical lifetimes for these plants yield residual capacities in each year, here referred to as the phase-out pattern. CCS technologies are assumed to become commercially available in 2020. The age structure of the power plants indicate that full turn-over in capital stock will take several decades with the present generation capacities accounting for around 50% of generated electricity in 2020. The results show that CO2 emission reductions of 20% and 60% by the years 2020 and 2050, respectively, relative to 1990, can be met at a marginal cost of abatement of about 25–40 h/ton CO2 over the period studied if CCS is included as an option from 2020. At the same time the marginal cost of generating electricity lies in the range 45–60 h/MWh. Excluding CCS raises the marginal cost of abatement with about 10 h/ton CO2, whereas the marginal cost of electricity generation increases with roughly 5–10 h/MWh. The CO2 target by the year 2020 is met by implementation of renewable electricity and fuel shifting from coal to gas. After 2020 CCS technologies constitute an attractive way for cost efficient and almost CO2-free base load. However, wide-spread application of CCS is an infrastructural challenge with respect to implementing capture plants as well as building up a corresponding CO2 infrastructure for transportation and storage as well as in coal supply systems. Given the price assumptions applied, gas may not be competitive once CCS enters the system causing early retirements of such units or possibly stranded assets.