DNV KEMA has analysed changes in Europe and the impact on the Norwegian electricity market. The study is based on ‘Roadmap 2050’ and ‘Power Perspective 2030’ commissioned by the European Climate Foundation (ECF). DNV KEMA has conducted further analysis and simulated three scenarios.
“The energy and power situation in Europe is changing. What opportunities and challenges does this represent for Norway? That is what we try to answer in our analysis,” says Kjell Eriksson, Vice President, Market and Business Development, DNV KEMA Scandinavia.
1: An ambitious Europe ‘Power Perspectives 2030’ points out that the European power sector will have to undergo significant changes in the period leading up to 2030 for Europe to meet its long-term goal of reducing CO2 emissions. Besides large-scale deployment of renewable energy, this scenario includes increased replacement of coal-fired power plants with gas-fired power plants, and a significant increase of the European grid capacity.
2: Delayed network development DNV KEMA has evaluated a new scenario in which European countries continue to increase the use of renewable energy, but fail to extend the necessary network infrastructure accordingly. In this scenario, one would expect to see many European nations struggling to contribute to the additional flexibility needed to handle large amounts of intermittent power generation from wind and solar power
3: A less renewable Europe In recent years, national and European policy has been heavily influenced by the limitations and uncertainty around future economic developments. As a consequence, some countries have reduced support for renewable energy, or cut funding entirely. Meanwhile, other countries have started to look for alternatives to large-scale deployment of renewable energy.
As an alternative, the third scenario therefore assumes that Europe will not meet its ambitious targets for renewable energy, but that conventional generation technologies continue to play a larger role in 2030. Similarly, this scenario assumes that one does not see any major improvements in energy efficiency or radical changes in heating.
The scenarios are designed to assess the effects of future changes in the European power markets on the Norwegian electricity market, as well as opportunities for Norway to contribute balance power to other European countries. The role of gas in the European energy mix was also studied.
“The analysis shows that an ambitious, renewable Europe has great need for balancing power and that Norway can play an important role. This requires new market mechanisms for balance capacity and additional connections between Norway and the Continent,” Eriksson points out.
Expanding on the analysis, Vibecke Hverven, Senior Vice President and Regional Manager, DNV KEMA Scandinavia says Europe is heading towards a CO2-free power sector in 2050. “Major steps must however be taken by 2020 and 2030 in order to reach the ultimate goal. The changes will be formidable, but they are nevertheless technically feasible and economically affordable. A stronger, smarter electricity grid is key, but the rate of change is highly dependent on political commitment, willingness and ability to change behaviour and consumption patterns.”
She continues: “Europe needs to invest between 1000-1400billion Euros in new, environmentally friendly power generation and double the capacity of the transmission network by 2030 if it is to meet its ambitious energy and climate goals. Investment in new plants for power generation and transmission networks creates opportunities for Norwegian knowledge enterprises and the export industry.”
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Press release, January 9, 2013; Image: DNV