The EU a solar and wind-powered road

The key to EU decarbonization is electrification... The utility sector is a critical emphasis area if climate neutrality is achieved by 2050: power consumption is growing and will reach record highs, driven by transportation and industries, where electrification rates are expected to climb from 30% to 60% by 2030. If existing technologies are used, electrification might reach 76 per cent by 2050. As a result, wind and solar photovoltaics must treble their growth rates.

Renewable energy isn't ramping up quickly enough to increase electricity demand. While 2020 was a watershed moment, with renewables surpassing fossil fuels to become the EU's primary source of electricity (38 per cent of total generation), hydropower and bioenergy have stalled, and 2020 also saw the most significant drop in the nuclear generation since 1990. This trend is expected to continue as countries set national phase-out targets, emphasizing the necessity for a solar and wind ramp-up, especially since the EU's recent Fit for 55 initiative targets at least 60% renewable power by 2030 and 85% by 2050. However, even leaders in solar and wind development (Denmark, Ireland, Germany, and Spain) have a long way to go since phasing out coal by 2030 remains a significant challenge; as a result, the Ff55 plan risks a five-year implementation delay.

A front-loading of EUR40.8bn per year for the electricity system and EUR44.7bn per year for power plants is required until 2030. Furthermore, the coal phase-out will necessitate an extra EUR131 billion across the EU, with EUR83 billion (63 per cent) going to wind, EUR30 billion (23 per cent) going to solar, and EUR19 billion (14% going to new gas plants). Of this total expenditure, EUR96 billion must go to the Coal-6 nations — Germany, Poland, Romania, the Czech Republic, Bulgaria, and Slovenia — who have set coal phase-out dates later than the 2030 deadline. Furthermore, by 2030, a carbon price of EUR152 per ton is required to encourage a market-based shift.

Carbon capture and storage (CCS) technologies can assist sectors in decarbonizing more quickly, but they must be deployed sooner and at a quicker rate.