BRUSSELS (Reuters) - European Union nations must nearly double investment in power grid building in the decade after 2020 if it is to get on the path to carbon-free electricity by the middle of the century, think-tank the European Climate Foundation (ECF) said on Monday.
The European Commission raised the goal of virtually emissions-free electricity in its 2050 road map toward a low carbon economy, published earlier this year, as the means to achieve an 80-95 percent cut in carbon scientists say is needed by then to stave off the worst effects of global warming.
“The European Union needs to establish a credible and adequate policy framework to ensure implementation of the current plans and to steer the decarbonization of the power sector beyond 2020,” an ECF report published on Monday said.
Already to meet 2020 goals to cut carbon by 20 percent and increase the share of renewable energy to 20 percent, member states need to increase transmission lines by 14 percent, or 42,000 kilometers (26,097.6 miles), at a cost of 628 billion euros ($872.7 billion) over this decade.
For the next 10 years, the cost climbs to 1.2 trillion, said the ECF’s report -- Power perspectives 2030: on the road to a decarbonized power sector in Europe.
In what it labels an “on track” scenario, based on the EU managing fully to implement its plans up to 2020 and projects in 2030 in line with targeted emissions cuts, it anticipates a power mix in 2030 made up of 50 percent renewable energy.
The rest would include 34 percent fossil fuels, plus a further 8 percent abated by carbon capture and storage, and 17 percent nuclear.
Perfecting the grid is crucial to optimizing available renewable energy, which tends to be concentrated on the fringes of Europe.
The ever steeper challenge could require innovative approaches, especially to financing: for instance, selling asset-backed bonds to institutional investors.
“There is a growing consensus within the financial community that new financing models will need to be found to finance this transition alongside existing approaches,” the report said.
The Commission has confirmed plans to launch European project bonds as part of its infrastructure financing plans to the end of this decade.
While power grids require huge investments, gas infrastructure could be adequate until around 2040 -- provided the planned investments to 2020 go ahead -- as renewable power, rather than carbon-emitting gas provides the solution to emissions reduction.
Beyond 2030, the report finds gas can only be “a significant destination fuel” if commercially viable ways of reducing its carbon emissions are in place.
“To keep the CCS option both for coal and gas installations, more needs to be done to drive technological development,” the report said.
The ECF’s report was researched in collaboration with Imperial College, London, consultants, Royal Dutch Shell and a range of utilities and technology manufacturers.
Reporting by Barbara Lewis; editing by James Jukwey