Why electricity grids?

The signing of the Paris Agreement in 2015 was a landmark event in the ambition to fight climate change. It is a driver for Europe to decarbonise its economy and move towards an energy supply system based on renewables. Grids play a vital role in enabling such higher shares of variable renewables in the energy system. This is due to several reasons:

1 – Geographical areas with a lot of wind or sun are often far away from load centres. Offshore wind parks or solar generation in a desert area are clear examples of this. If you still want to benefit from such generation sites – because a lot of energy can be ‘harvested’ here – you need grids to then bring the energy to where it will be consumed.

2 – Overall, it is cheaper to produce wind and sun away from human settlements. Land prices are more expensive near densely populated areas than in places where no-one lives. Furthermore, economies of scale lead to bigger plants allowing for cheaper production of electricity. Larger wind farms and solar plants are easier to build where no one lives and consume the energy. Yet, similar to the previous example, we end up with a geographical distance which needs to bridged. 

3 – Supply and demand of electricity need to be equal at any given point in time to avoid black-outs. In an electricity system with a high share of wind and solar PV, this is a more challenging task because generation of electricity is variable. More precise forecasting and usage of grids to balance volatility have proven to allow for higher shares of renewables in the system. For example, Germany today frequently handles more than 40% of electricity from renewables in its system, thanks to being well-connected to neighbouring countries.

Due to the time it takes to build and the lifetime of the investments, planning of the necessary energy infrastructure needs to happen now.

What is the role of scenario development in the energy transition?

In order to properly plan investments to expand this critical energy infrastructure, we first have to find out what kind of infrastructure is expected to be needed. This is where scenario development becomes an essential step.

A scenario is a quantified description of an energy future. It describes the when and where of demand and supply, taking into account aspects like costs and efficiency of different technologies. 

A future energy system compliant with the Paris Agreement will be very different from today’s system. We will rely to a much larger extent on variable renewables. Substantial parts of energy for production of heat or for transport will be electrified. Decentralised energy production will become much more important. Consumers of electricity will become active players. The electricity sector and the gas sector will have to interact in a new manner.

These scenarios all have vast implications on the energy infrastructure. A scenario describes such changes. Different future worlds can be imagined, and each can be described via a different scenario.

Once a coherent set of energy scenarios have been decided upon, the next step is to model them. A market model provides information on which supply sources would respond to a given demand. A grid model then looks into infrastructure constraints, identifying physical bottlenecks to what the market model suggests and, in turn, the specific infrastructure needs. Such scenario development and modelling exercises are therefore fundamental in the identification of future infrastructure and hence investment needs.

How is the European grid planned?

The European Networks of Transmission System Operators for Electricity and for Gas (ENTSO-E and ENTSOG respectively) play a central role in defining what grid is needed for the future. Every two years they run the Ten-Year Network Development Plans (TYNDP) – two grid planning exercises which describe infrastructure needs for Europe by moddeling a set of different future energy scenarios.

In the past, TYNDP scenarios have been criticised for not being aligned with the 1.5°C Paris target and for not looking into a 100% renewable energy scenario. There is therefore a risk that, if not planned for and developed, the lack of correct energy infrastructure might restrict the growth of renewables, whilst the expansion of the wrong infrastructure may deepen Europe’s dependency on fossil fuels.

Despite the importance of the TYNDP for decarbonisation, only relatively few civil society organisations take an active role in the process. Two key reasons for this low involvement are the highly technical content and long implementation periods.

The role of the PAC project

The PAC project – “Paris Agreement Compatible Scenarios for Energy Infrastructure”– has been established to give a wider stakeholder group the opportunity to provide feedback to the TYNDP scenario development and develop its own “Paris compatible” scenario. The PAC project is also a capacity building opportunity for stakeholders who understand the importance but who are not knowledgeable of the technicalities of developing and modelling scenarios. The project will facilitate discussion on pathways to reach the Paris targets amongst groups who usually do not associate with each other.

Further information on the TYNDP process