ADVANCED SYSTEM STUDIES

The Advanced System Studies for Energy Transition are grouped into clusters:

  • Cluster 1 : EU Electricity Systems - Integration of Variable Renewables (VRE)
  • Cluster 2 : EU Electricity Systems - Flexibility
  • Cluster 3 : EU Electricity Systems – Market Design
  • Cluster 4 : Smart Energy and Efficiency
  • Cluster 5 : Gas and Fuel for Transport
  • Cluster 6 : Social and Human Science
  • Cluster 7 : Legislative and Policy Framework

 


CLUSTER 1: EU Electricity Systems - Integration of Variable Renewables (VRE)

 

 

Background

Renewable Energy Sources are one of the main pillars of the EU’s transition to a low-carbon, resource-efficient economy. Current projections for 2030 foresee that 50% of electricity demand at the European level will be covered by renewables. Until now, RES development has been mainly incentivized by national support schemes. However, there is evidence that such schemes have a distortive impact on the internal energy market, resulting into high costs for households and businesses.

Given the relatively small scale of wind turbines and solar panels, a significant share of their capacity is connected to low- and medium-voltage grids, i.e. not at transmission level but at distribution level. To accommodate 50% VRE share and facilitate their system integration, significant changes in the power market design and power system management are needed (both at system and distribution level). This should also allow for making use of the grid-friendly features that renewables can offer.

 

Issues

The prospect of large-scale penetration of RES calls upon transforming the current power system management and market design. A key challenge will be to integrate RES into existing markets and let them compete with other energy technologies on equal footing. Options include a reform of support schemes in a cross-border perspective and  the development of liquid short-term markets (including balancing and ancillary services) in a regional perspective. Cost-effectiveness will increase through technology learning but also through RES aggregators, providing benefits from economies of scale and risk hedging with respect to market and revenue uncertainties. Special attention is needed for the support of currently less economically mature technologies, in particular offshore wind and the associated grid requirements. In addition, grid-related constraints prevent an optimal use of renewables across Europe. Some of these constraints are technical in nature (inadequacy of distribution networks for decentralized energy, need of HVDC transmission backbones, storage and flexibility options…), while others are non-technical (regulation of system operators, grid access regulation, grid tariff design…).

 

Related Advanced Studies


Job Creation and Sustainable Growth Related to Renewables

The objective of the study is to present a detailed qualitative and quantitative analysis of the employment and labour market impacts induced by ambitious deployment of RES. The energy system transition from fossil fuels to RES and its potential implications on job creation are assessed in-depth from a holistic perspective, taking into consideration economic, technology and commercial impacts in the entire activity chain of RES technologies. The study attempts to capture both positive and negative implications of the transition to renewables on job creation, competitiveness and sustainable growth in EU-28 and in each member state up to 2030 and 2050. Creation of new jobs in RES sectors (and in sectors supplying RES-related equipment) and displaced jobs in fossil fuel extraction and processing and in carbon intensive power generation are explicitly quantified.

 

Islands and Energy Islands in the EU Energy System

The aim of the study is to define basic principles of an energy-environment-economy strategy for European islands. The principles are among others useful for the cost-benefit assessments that accompany the funding of projects with European Union involvement. The goal of the study is to assess the added value of carrying out specific policies as well as research and innovation (R&I) actions – both dedicated specifically to islands. The main focus envisaged for such actions covers:

• An increased used of local renewable energy sources;
• Decarbonisation of the transport system on the island and from the mainland to the island;
• An optimised energy system designed / retrofitted to the needs of the island and using synergies between the different networks (e.g. heating and cooling, transport), including assets for the storage of energy and potentially relation with the water network.

 

CLUSTER 2: EU Electricity Systems - Flexibility

 

 

Background

The current and future increase of RES penetration in the system is mainly driven by the deployment of variable sources such as wind and solar power. Balancing variable renewables with flexible sources is becoming a more and more important element of the system operation, especially in markets with high VRE penetration. This requires special attention to flexible fleet but also enlarging control areas, better grid management, DSM options, aggregators and storage. Flexibility will play a key role in this respect. Among large-scale power stations, gas and hydro storage can perform fast ramping to follow a fluctuating (net) demand. Additional flexibility will have to emerge from small-scale, decentralised resources, demand response and storage – most notably at distribution level. This includes small- and large-scale batteries as well as chemical storage and Power-to-X technologies. Interconnections and regionalisation of power markets can also play a key role to fulfil flexibility requirements in particular when balancing markets are well-coordinated and coupled across national borders.

 

Issues

Given the decreasing market share of centralised power stations and the increasing share of intermittent resources such as wind and solar, there is a growing need to  better understand (i) how much flexibility will be required in the future power system, (ii) what the most cost-efficient flexibility options are, (iii) which flexibility options could be used to satisfy our flexibility requirements in the most cost-effective way and (iv) how to eliminate existing barriers to flexibility increase in the European power systems. Barriers hindering the uptake of these flexibility options can be of technical, economic or regulatory nature. On the other hand, some flexibility options may simply not have reached technical maturity or economic feasibility. This is likely the case for some battery options. Yet, given the dynamically growing markets for electric vehicles, further technological and economic progress can be expected. Therefore, there is a constant need to monitor techno-economic aspects of these flexibility options in a systematic way. From a market design perspective, it is imperative to establish such market organisation that flexibility is priced and valued in the market and therefore, remunerated. This may include development of balancing- and ancillary services markets, also at regional level.

 

Related Advanced Studies

Impact of the growth of the share of RES in electricity production on frequency control

The share of renewable energy sources in the generation mix is being increased dramatically. Considering that most generation based on renewable energy sources is fundamentally different from classical generating units, while complexifying the power control in the system, the objective of the study is to define frequency control strategies to cope with increasing integration of renewables in the grid.


CLUSTER 3: EU Electricity Systems – Market Design

 

 

Background

Liberalisation has changed the European electricity system profoundly. It unbundled generation, transmission and distribution of electricity to reduce costs of electricity supply by introducing competition, also across national borders, aiming to create an EU internal market. Further changes lie ahead, because the existing market concept dates from an era in which consumers were by and large considered as passive and in which large-scale, fossil-fuel-fired power stations had the task to satisfy their demand at all times. The implementation of policy goals (e.g. reduction of GHG emission or targets for renewables) has led to deep changes in regulation (EU ETS, renewable support schemes) and has triggered a technological transformation to low-carbon, decentralised resources. This development will have to be accompanied by changes in the market structure, by more regionalisation and by a gradual strengthening of intraday and balancing market as well as their opening for renewables, decentralised resources and the demand-side.

 

Issues

The primary importance is to prepare a new market design which will be able to enable the transformation of the EU power system in the decade 2020-2030 in order to deliver the EU’s 2030 low-carbon and renewable targets in the most cost-effective way. Such a market will need to be integrated at a regional level as aimed by the European Commission to establish a level playing field for all European market actors. The main challenges can be summarized as follows:

•             Development of short-term markets (incl. balancing and ancillary services), where VRE can play a role;

•             Dealing with variations in demand and supply and overcapacity (flexibility);

•             Integration of new actors and decentralised resources;

•             Interaction between transmission and distribution system operation;

•             Interaction between wholesale and retail markets;

•             Management of grid congestion – both at transmission and distribution level;

•             Reduction of retail pricing.

 

 

Related Advanced Studies


A foresight perspective of the electricity sector evolution by 2050

A number of factors are impacting the power systems all around the world. Among them, we can cite the massive integration of renewable energy sources, the decentralization and the digitalization of the power system, the active participation of consumers in the energy transition, etc. If these factors already introduced major changes in the power system, it is expected that fundamental changes will continue to occur in the upcoming decades. The main purpose of this study is to emphasize the long-term trends(horizon 2050)that will impact power systems in general and the European power system in particular. Boundaries of the power system, such as its interactions with other energy systems will be included in the study.

 

CLUSTER 4: Smart Energy and Efficiency

 

 

Background

A growing importance of consumers is at the heart of the current market design initiative. Smart Energy Solutions in Buildings, Cities and Grids can play a key role in achieving this objective. Everyday appliances have started to be increasingly connected to the internet (“Internet of Things”) and can thus be controlled remotely. As a result, home automation solutions have started to emerge that are increasingly communicating with each other – often acting as bridge between the electricity and heat sector. At the same time, there is more and more auto-generation of electricity and heat (“self–consumption”), often combined with stationary batteries and electric vehicles. Moreover, communities of (both residential and commercial) prosumers are starting to appear, making energy transactions at local level (e.g. district/city level). For these reasons, the complexity distribution grid management as well as urban planning in general is expected to increase There is a growing need to manage variable energy flows and access the flexibility potential that will emerge at distribution grid level.

 

Issues

Self-consumption of renewable energy needs to be optimized by the use of best technologies for electricity, heating, and cooling. The role of demand response and of storage to maximize self-consumption has to be assessed. Moreover, the regulatory dimension of self-consumption (e.g. allocation of electricity bill components not related to electricity supply) is of key importance.

Smart home and buildings solutions require an efficient management of distributed energy supply and demand (smart thermostat, DSM,…). In this context, building energy management systems (BEMS) and Building Information Management (BIM) play a key role. For buildings, energy intelligence platforms have to be developed. These platforms have the potential to support the implementation of energy efficiency measures (e.g. insulation) by providing visibility of energy performance and identifying the most cost-effective measures.

Smart Cities and Communities require an optimization of energy uses at city/community level: power, heat, mobility. This would include synergies between smart electricity grids and smart heat/cooling networks (e.g. via Power2Gas, CHP, …) and synergies between smart electricity grids and smart charging of EVs at city level. Moreover, local energy community applications, where smart prosumers locally exchange energy, are starting to emerge and could potentially have a profound effect on energy decentralization, by supporting the emergence of local energy markets.

 

Related Advanced Studies

Consumer satisfaction kpis for the roll out of smart metering in member states

The study should be viewed in the context of supporting actions for delivering the "new deal" for consumers as described in the Energy Union strategy, and the new Market Design Initiative under the "Clean Energy for All" Package. Its objective is to design, building on available best practices, a comprehensive framework with key performance indicators (KPIs) to systematically and transparently monitor progress and satisfaction from a consumer perspective and ultimately establish the success of smart metering deployment in the EU. To this respect, the study should carefully analyse the effect of smart metering on consumers in terms of:
•  context, considering that a certain action could have both negative and positive impacts;
• demographics, including potential consumer vulnerabilities e.g. how to adjust information provision and smart metering services to address energy poverty, but also different levels of ICT literacy/ ability to use technology, as shown in recent studies


Dynamic Retail Energy Prices

Variable electricity prices are a component of the price or the entire price that are related to the variability of a market-based price index, for example, a wholesale market clearing price. Applying variable electricity pricing may help consumers participating dynamically in the electricity markets and incentivise demand response more effectivelyThe goal of the study is to propose strategies to be adopted for designing dynamic retail electricity prices and  variable distribution and/or transmission tariffs for achieving the objectives of the proposed Directive and Regulation of the new electricity market design with regards to dynamic contracts to be provided to consumers.

CLUSTER 5: Gas and Fuel for Transport

 

 

Background

The transport sector is one of the most challenging to decarbonise due to the relatively limited options and high cost of those available options. Apart from improving efficiency, a less carbon-intensive fuel mix is needed. In the mid- to long-term, to achieve deep decarbonisation, the road transport and rail sectors should move towards electrification or hydrogen, biofuels solutions should be reserved for heavy duty trucks as well as the aviation and shipping sectors. The aviation sector in particular currently has very few alternatives. It is responsible for 2.6% of EU GHG emissions and 13% of EU transport emissions and the transport sector as a whole is one of the fastest growing. Due to an increasing power supply from renewables power to heat, power to product and power to gas will become an economic viable option in the long-term. Decarbonisation of transport in this regard would require power to gas and then production of hydrogen and subsequently methane or ethanol to get a transport fuel.

 

Issues

Increasing electrification of road vehicles, and in the longer term a possible move to hydrogen fuelled vehicles, require significant changes to fuelling / charging infrastructure, changes in consumer purchases and significantly also advances in battery technology to drive down cost and weight and increase lifespan and range. Aviation has few options beyond biofuels. Technically, several types of biofuel and renewable fuel for aviation have by now been developed. Since 2008, five types of renewable fuels have been officially approved by ASTM for use in aviation, and commercial airlines have performed flights using biojet fuel. Currently the main barrier to the uptake of biojet fuels is price, as such fuels typically cost about three times more than conventional jet fuels. In addition, further policy intervention is needed, from regulatory measures such as a specific mandate for aviation biofuels, to softer instruments like stimulating innovations and projects in the supply chain. Finally, deep carbon emission reduction in the long run requires the use of advanced bio-kerosene in aviation as a fuel fungible to mineral oil kerosene. Advanced bio-kerosene is needed to ensure sustainability related to land use and biomass feedstock.

Related Advanced Studies

Sectorial integration long-term perspective in the EU energy system 

The objective of this study is to identify the impact that sectorial integration could have on the cost and the infrastructure requirements of the energy system. In particular, the following options are being analysed:

• Power to Gas, and the use of H2 and clean gas in decarbonising the natural gas grid

• The use of green H2 in industry (refining and fertilisers are the main users)

• Linking the power and the mobility sector

• Linking the power and heating sector


CLUSTER 6: Social and Human Science

 

 

Background

Renewable Energy Sources are one of the main pillars of the EU’s transition to a low-carbon, resource-efficient economy. Current projections for 2030 foresee that 50% of electricity demand at the European level will be covered by renewables. Until now, RES development has been mainly incentivized by national support schemes. However, there is evidence that such schemes have a distortive impact on the internal energy market, resulting into high costs for households and businesses.

Given the relatively small scale of wind turbines and solar panels, a significant share of their capacity is connected to low- and medium-voltage grids, i.e. not at transmission level but at distribution level. To accommodate 50% VRE share and facilitate their system integration, significant changes in the power market design and power system management are needed (both at system and distribution level). This should also allow for making use of the grid-friendly features that renewables can offer.

 

Issues

The prospect of large-scale penetration of RES calls upon transforming the current power system management and market design. A key challenge will be to integrate RES into existing markets and let them compete with other energy technologies on equal footing. Options include a reform of support schemes in a cross-border perspective and  the development of liquid short-term markets (including balancing and ancillary services) in a regional perspective. Cost-effectiveness will increase through technology learning but also through RES aggregators, providing benefits from economies of scale and risk hedging with respect to market and revenue uncertainties. Special attention is needed for the support of currently less economically mature technologies, in particular offshore wind and the associated grid requirements. InIn addition, grid-related constraints prevent an optimal use of renewables across Europe. Some of these constraints are technical in nature (inadequacy of distribution networks for decentralized energy, need of HVDC transmission backbones, storage and flexibility options…), while others are non-technical (regulation of system operators, grid access regulation, grid tariff design…).


CLUSTER 7: Legislative and Policy Framework

 

 

Background

This cluster is mostly a transversal cluster as policies drive developments in all areas of the energy sector. There is a number of interesting policy tools across Europe. It is key, however, to understand the, good practise, context and efficiency of these policies. The cluster will focus on internal EU policies but it will also include a broader context, addressing specific topics on the geopolitics of the energy supply and gas interconnectors in the light of security of supply. Most of the quick and long studies will be informed by this cluster and will potentially give input to relevant developments for this cluster. The main legislation and communications are described in section 2.4 of the ITT. The cluster will also include specific topics on the geopolitics of the energy supply and gas interconnectors in the light of security of supply. They cover the supply and use of energy in the EU and link to the response to climate change, particularly energy efficiency and renewable energy.

 

Issues

Profound change in the design of the European energy mix with a high share of RES needs combined action in all the areas subject to analysis in clusters 1-6. It is important however, to use the added value of corresponding policies and assure their mutual impact adds to the overall target of the new energy market design. It is also important to incorporate various drivers Member States have in their policy design to to facilitate the optimal selection of policy measures. More specifically, energy security is one of the big challenges of Europe. Without enough supply to cover the demand in the Member states, the Union has to develop strategies to secure diversity of energy sources. This is particularly relevant to fuel imports and, especially, gas imports to Europe. At the same time, access to energy becomes increasingly important, as most modern services like telecommunication and transportation rely on access to electricity. The discussion on gas interconnectors is very closely linked to the discussion on security of gas supply in Europe. There is a common understanding that stronger gas interconnectors will increase security of supply and drive gas prices down in Europe. Gas is considered as transition fuel on the road to full decarbonisation and allows for flexible capacity, reacting promptly to intermittent renewables production patterns. In that light, it has an important role in security of supply in gas – and power sectors..

 

Related Advanced Studies


Format and procedures for electricity (and gas) data access and exchange in Member States

The study should be viewed in the context of supporting actions for delivering the "new deal" for consumers as described in the Energy Union strategy, and the new Market Design Initiative under the "Clean Energy for All" Package. The task provides detailed information concerning:

· The current system: data, and technology for certain market activities, namely switching, billing, and support for flexibility & energy efficiency

· Per activity, this includes formats, protocols and procedures as well as role models for data access/exchanges used in Member States.

· The national reasons for this choice: 'why' one has opted for certain arrangements.

· The (near) future expected system: any foreseen updates towards establishing a single national framework.


DISCLAIMER

"The study is carried out for the European Commission and expresses the opinion of the organisation having undertaken them. To this end, it does not reflect the views of the European Commission, TSOs, project promoters and other stakeholders involved. The European Commission does not guarantee the accuracy of the information given in the study, nor does it accept responsibility for any use made thereof."