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Impact of declining renewable energy costs on electrification in low-emission scenarios

An Author Correction to this article was published on 03 March 2022

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Abstract

Cost degression in photovoltaics, wind-power and battery storage has been faster than previously anticipated. In the future, climate policy to limit global warming to 1.5–2 °C will make carbon-based fuels increasingly scarce and expensive. Here we show that further progress in solar- and wind-power technology along with carbon pricing to reach the Paris Climate targets could make electricity cheaper than carbon-based fuels. In combination with demand-side innovation, for instance in e-mobility and heat pumps, this is likely to induce a fundamental transformation of energy systems towards a dominance of electricity-based end uses. In a 1.5 °C scenario with limited availability of bioenergy and carbon dioxide removal, electricity could account for 66% of final energy by mid-century, three times the current levels and substantially higher than in previous climate policy scenarios assessed by the Intergovernmental Panel on Climate Change. The lower production of bioenergy in our high-electrification scenarios markedly reduces energy-related land and water requirements.

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Fig. 1: Key characteristics of renewables-based electrification and conventional scenarios.
Fig. 2: Evolution of energy prices at the secondary energy level.
Fig. 3: Energy supply system developments in 1.5C-Elec scenario.
Fig. 4: Final energy demand and energy services in electrification scenarios.
Fig. 5: Economic and environmental implications.

Data availability

The specific model runs and scenario data for this study are archived at Zenodo under https://doi.org/10.5281/zenodo.5546598 under a CC-BY-4.0 license.

Code availability

The REMIND code is available under the GNU Affero General Public License, version 3 (AGPLv3) via GitHub (https://github.com/remindmodel/remind, last access: 30 June 2021). The technical model documentation is available under https://rse.pik-potsdam.de/doc/remind/2.1.3/ (last access: 1 December 2020). The source code and input data of MAgPIE v.4.3.1 (https://github.com/magpiemodel/magpie) are openly available at https://doi.org/10.5281/zenodo.4231467. The technical model documentation is available at https://rse.pik-potsdam.de/doc/magpie/4.3.1/.

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Acknowledgements

The research leading to these results has received funding from the German Federal Ministry of Education and Research under grant agreements no. 03SFK5A (Ariadne; G.L., F.U., M.P., R.P., M.R., F.S., A.D., A.L., R.R.) and no. 01LA1809A (DIPOL; L.M., N.B., J.S.) and from the European Union’s Horizon 2020 research and innovation programme under grant agreements no. 821124 (NAVIGATE; S.M., E.K.) and no. 821471 (ENGAGE; C.B.). We thank D. Soergel for editing and feedback as well as P. Agrawal and F. Benke for support in data analysis.

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Contributions

G.L. designed the research together with F.U., R.P. and E.K.; G.L., S.M., L.M., F.U., M.P., R.P., M.R., F.S., N.B., L.B., C.B., A.D., A.L., A.P., R.R., J.S. and E.K. contributed to developing the energy–economy modelling. A.P., F.H. and L.M. contributed the land-use modelling. S.M., L.M., M.P. and M.R. performed scenario modelling. G.L., M.P. and F.S. performed data analysis and created the figures. G.L. wrote the paper with input and feedback from all authors.

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Correspondence to Gunnar Luderer.

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The authors declare no competing interests.

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Peer review information Nature Energy thanks Stefan Vögele, Matthew Binsted and the other, anonymous, reviewer(s) for their contribution to the peer review of this work.

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Extended data

Extended Data Fig. 1 Sectoral electrification shares in 2050.

Electrification shares in the transport, buildings and industry sectors in 1.5C-Elec and WB2C-Elec compared to overall electrification and electrification in corresponding IPCC SR15 scenarios.

Extended Data Fig. 2 Fossil carbon intensity of electricity and non-electric fuels (incl. hydrogen).

Fossil carbon intensity excludes negative emissions from BECCS. Thick solid and dashed lines indicate scenarios from this study, thin lines and shading corresponding SR15 scenarios. In all scenarios, the fossil carbon intensity of electricity declines much faster than the fossil carbon intensity of non-electric fuels.

Extended Data Fig. 3 Gross residual fossil emissions and carbon dioxide removal.

Sectoral residual fossil CO2 (that is, not accounting for negative emissions from BECCS) emissions from the electricity supply, non-electric supply, transport, buildings and industry sectors (positive emissions). Carbon dioxide removals from BECCS (bioenergy with CCS) and DACCS (direct air carbon capture and storage) are displayed as negative emissions. Emissions from land use, land use change and forestry (LULUCF) are currently net positive but turn net negative in some periods and scenarios.

Extended Data Fig. 4 Sankey diagram of energy system flows in 2050 in 1.5C-Elec scenario.

Energy flows are given in units of EJ per year and describe secondary energy generation by primary energy input (left to middle), and final energy provision by energy carrier (middle to right).

Extended Data Fig. 5 Regional Energy Systems in 2050.

Shares of (a) sectors and energy carriers in final demand, (b) technologies in electricity generation, (c) primary energy supply across model regions.

Supplementary information

Supplementary Information

Supplementary Tables 1–3 and Figures 1–13.

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Luderer, G., Madeddu, S., Merfort, L. et al. Impact of declining renewable energy costs on electrification in low-emission scenarios. Nat Energy 7, 32–42 (2022). https://doi.org/10.1038/s41560-021-00937-z

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