Scenario SUSTAINABLE TRANSITION

Macro-economic Trends and Targets

In the Sustainable Transition storyline, climate action is achieved with a mixture of national regulation, emission trading schemes and subsidies. National regulation takes the shape of legislation that imposes binding emission targets. Overall, the EU is just on track with 2030 targets, whilst being slightly behind in 2040 on the path to the 2050 decarbonisation goals. However, targets are still achievable if rapid progress is made in decarbonising the power sector during 2040s.

The economic climate in the Sustainable Transition scenario is moderate growth; regulation and subsidies are achievable since there is the capital available from national governments to fund RES projects (both intermittent and non-intermittent). There is a societal ambition to support and participate in climate action, as long as the climate action is seen to be managed in a cost effective way. As a result, shale gas is not developed.

Power Generation

Gas-fired power generation flourishes due to relatively cheap global gas prices and strong growth of bio-methane. A regulatory framework in place decreases the use of coal-fired power stations. Gas-fired generation provides the

necessary flexibility to balance renewables in the power system. There is a decrease in CO2 emissions since much coal-fired base load power generation retires or is out of merit due to a reasonably high ETS, carbon prices and governmental policies. Depending on national policies, there could still be room for a minimum number of new units but overall the number of nuclear plants in Europe is decreasing. Carbon capture and storage does represent a viable option in industries for those processes characterised by high load factors. An efficient electricity market and strong price signals ensure necessary investment to peaking power generation, with gas being the preferred fuel.

Heat

There are no significant changes in the heat generation sector; in most countries, gas will remain the most prominent source; however, the use will decrease due to increasing energy efficiency. Hybrid heat pumps are considered an option in new buildings. Industrial gas and electricity demand is relatively stable. Development of energy efficiency is moderate.

Transport

Driven by cheap gas prices and bio-methane development, gas is the preferred option for passenger cars to switch from oil in reaching emission reduction goals, while electricity use for residential transport is growing moderately. There is an increase in LNG use in heavy goods and shipping sectors. There is a limited penetration of hydrogen vehicles.

Electricity Demand

Overall, electricity demand stagnates or grows moderately. Use of gaseous fuels increases for transport and power generation, but slightly decreases for heating.

Gas Demand

The yearly final gas demand is increasing in the transport sector. Annual gas demand is decreasing in the residential sector, driven mainly by efficiency measures, but gas still provides a large proportion of peak heating demand situations. Industrial demand is relatively stable.

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