Scenario DISTRIBUTED GENERATION

Macro-economic Trends and Targets

In the "Distributed generation" story line, significant leaps in innovation of small-scale generation and residential /commercial storage technologies are a key driver in climate action. An increase in small-scale generation keeps EU on track to 2030 and 2050 targets. A “prosumer” rich society has bought into the energy markets, so society is engaged and empowered to help achieve a decarbonized place to live. As a result no investment in shale gas is expected.

Power Generation

Small-scale generation technologies costs have been rapidly declining. Technologies such as solar offer a non-subsidised option for “prosumers” in most parts of Europe. Major advances in batteries enable "prosumers" to balance their own electricity consumption within a day. Nuclear mostly depends on Country specific policies. Power-to-gas becomes a commercially viable technology for the production of green gas. Technological leaps in small-scale generation challenge large-scale power generation, pressurizing the profitability of traditional power plants. System adequacy is maintained through a centralised mechanism that retains enough peaking capacity, district heating CHP are suitable for both heating and electricity adequacy. The scenario has a strong ETS scheme which favours gas before coal in the power market, and an increasing share of bio fuels.

There is a strong EU climate policy in place, the decreasing cost of small-scale generation technologies drives down the cost of climate action. As solar yields are higher in Southern Europe, investments are likely to be higher in these regions, in comparison to Northern Europe.

Electricity demand flexibility has substantially increased, both in residential and industrial solutions, helping electric power adequacy. However, wintertime with high heating needs and low solar availability remains a challenge, since batteries cannot be used for seasonal storage.

Transport

Electricity and gaseous fuels are both key components for the transport sector in reaching emission reduction goals. Lower battery costs have significantly increase demand for electricity in transportation sector. There is an increase in the use of LNG for the transportation of heavy goods and also in the shipping sectors. There is a limited penetration of hydrogen vehicles.

Heat

Electric and hybrid heat pumps are a significant technology in heating sector, helping to offset the use of fossil heating fuels. With improved building efficiencies into both existing and new buildings hybrid heat pumps are the preferred option by the ‘prosumer’s’. Hybrid heat pumps allow the ‘prosumer’ to choose which source of energy to meet their heating needs. District heating CHP represent an alternative solution for residential districts.

Electricity Demand

Yearly electricity demand has increased in the heating and transport sectors, overall electricity demand growth reduced in the residential sector due to ‘prosumer’ behaviour, high efficiency goods and building efficiency measures. Demand responds well to market prices, the daily electricity demand profile is smoothened, the effect is that peak electricity demand is reduced in this scenario.

Gas Demand

The yearly final gas demand is increasing in the transport sector. Annual gas demand is decreasing in the residential sector, driven mainly from all electric heating technologies, and building insulation measures. Gas is required for peak demand situation, such as, cold weather conditions. Natural gas for industrial use is decreasing in this scenario driven by electrification of industrial process heating, however gaseous fuels are still required to cover peak demands. The gas demand for other energy intensive industry processes is stable.