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European Union (EU) legislation is increasingly embracing the energy efficiency first (EE1st) principle. This principle seeks to prioritise energy efficiency measures whenever these involve lower costs to society than generators, networks and other energy supply options while achieving the same outcomes. This study contributes to the quantitative evidence on the relevance of EE1st by modelling the impact of moderate to ambitious end-use energy efficiency measures on energy supply and the associated system cost under a net-zero greenhouse gas emissions constraint by 2050. These measures focus on the EU building sector and include both building retrofits (e.g. wall insulation) and efficient products (e.g. lighting). The results indicate that implementing more ambitious energy saving measures reduces the total electricity, heat and hydrogen capacities needed to achieve the net-zero target. Reducing energy use in buildings by at least 21% between 2020 and 2050 is essential to avoid excessive energy supply costs. This requires actions that go well beyond business-as-usual trends. Reductions of around 30% could be justified on the grounds of (i) high fossil fuel prices and (ii) multiple impacts (e.g. health benefits). Overall, the outcomes provide reasonable justification for the EE1st principle. To put the principle into practice, policy actions such as doubling building renovation rates and setting higher energy efficiency targets are key.

Hydrogen is widely considered to play a pivotal role in successfully transforming the German energy system, but the German government's current “National Hydrogen Strategy” does not specify how hydrogen utilization, production, storage or distribution will be implemented. Addressing key uncertainties for the German energy system's path to greenhouse gas-neutrality, this paper examines hydrogen in different scenarios. This analysis aims to support the concretization of the German hydrogen strategy. Applying a European energy supply model with strong interactions between the conversion sector and the hydrogen system, the analysis focuses on the requirements for geological hydrogen storages and their utilization over the course of a year, the positioning of electrolyzers within Germany, and the contributions of hydrogen transport networks to balancing supply and demand. Regarding seasonal hydrogen storages, the results show that hydrogen storage facilities in the range of 42 TWhH2 to 104 TWhH2 are beneficial to shift high electricity generation volumes from onshore wind in spring and fall to winter periods with lower renewable supply and increased electricity and heat demands. In 2050, the scenario results show electrolyzer capacities between 41 GWel and 75 GWel in Germany. Electrolyzer sites were found to follow the low-cost renewable energy potential and are concentrated on the North Sea and Baltic Sea coasts with their high wind yields. With respect to a hydrogen transport infrastructure, there were two robust findings: One, a domestic German hydrogen transport network connecting electrolytic hydrogen production sites in northern Germany with hydrogen demand hubs in western and southern Germany is economically efficient. Two, connecting Germany to a European hydrogen transport network with interconnection capacities between 18 GWH2 and 58 GWH2 is cost-efficient to meet Germany's substantial hydrogen demand.

This report aims to develop a methodological concept for a model-based analysis of the Energy Efficiency First (EE1st) principle for the EU-27 that iscarried out and analysed in subsequent reports of the ENEFIRST project. The objective of this energy system analysis is to investigate what level of demand and supply-side resources should be deployed to provide the greatest value to the EU's society in transitioning to net-zero GHG emissions for the building sector by 2050. On the demand side, the analysis focuses on the resource option of end-use energy efficiency in buildings, investigating the contributions of thermal retrofits, efficient appliances, and other measures towards the net-zero target. On the supply side, the analysis quantifies the possible deployment and costs of various generation, network and storage options for the provision of electricity, district heat and gas products for the building sector. By determining what resource portfolio should be adopted under given framework conditions to reach the 2050 target, this analysis can help decision-makers identify priorities for policy design and technology investment. The analysis covers a set of three model-based scenarios. Each of these scenarios is geared to reach the 2050 target of net-zero emissions in the EU-27. However, the scenarios differ in terms of the contribution of different resource options towards target achievement: (1) The LOWEFF scenario assumes that energy use in buildings is decarbonized primarily via the use of renewable-based supply-side resources. (2) The MEDIUMEFF scenario is characterized by an even deployment of demand- and supply-side resources. (3) In the HIGHEFF scenario, end-use energy efficiency measures in buildings are viewed as the most favourable decarbonisation option for the European energy system by 2050, representing a future in which the EE1st principle is comprehensively applied in energy system planning and investment. To capture the interactions between the building sector and the supply side of the EU energy system, this analysis couples four bottom-up energy models: INVERT, FORECAST, ENERTILE and NETHEAT. As such, the analysis features a comprehensive coverage of the major end-uses (space heating, water heating, space cooling, electrical appliances, lighting, cooking) in residential and non-residential buildings. On the supply side, operation and investment of both power and district heating systems are explicitly modelled. To measure the performance of the three scenarios, the outputs of the analysis are analysed in two respects. For one thing, the so-called techno-economic assessment focuses on the indicator of energy system costs, indicating the sum of capital expenditures and operating expenses needed to meet the energy service demand in the building sector. Supported by additional indicators, this assessment helps determine the extent to which society is better off – in pure monetary and technical terms – if demand-side resource were prioritized in energy planning and operation. For another, the so-called socio-environmental assessment investigates selected multiple impacts of the resource configurations computed in the different scenarios. Where possible, these impacts are quantified and monetized using dedicated methodologies. In sum, this model-based analysis addresses the four criteria of quantitative assessments for the EE1st principle: (1) It features an integrated model-based appraisal of demand- and supply-side resources in the building sector and associated supply sectors (electricity, district heat, natural gas and hydrogen). (2) There is a common planning and policy objective across all scenarios of reaching net-zero GHG emissions for the EU building sector by the year 2050 while meeting demand for energy services. (3) All costs and benefits are evaluated from a societal perspective, rather than a private one. (4) A systematic appraisal framework is used to compile all relevant cost and benefit items, including a selection of multiple impacts.

In order to mitigate global climate change and air pollution, the Chinese government has assigned high priority to expanding low-carbon power generation in China. Recent studies have shown that wind power is one of the most promising renewable energy option in China. Although many studies have estimated the generation potential of onshore wind power, their results vary widely from 1783 TWh to 39,000 TWh. Therefore, we examine the different assumptions in these papers and identify three main factors influencing the results. The three influencing factors are: weather data set, land utilisation factor, and wind turbine configuration. For our model-based analysis, we define a reference scenario which is used to compare the results. Our analysis shows using a different weather data set increases the generation potential to roughly 35,000 TWh. This is 54% higher than the generation potential of the reference scenario. The land utilisation factor also has a large influence, ranging between −10% and −51%. The studies' assumptions and data should be subjected to careful scrutiny, as the calculated wind power potentials are widely used to develop decarbonisation strategies for the energy system.

In the framework of the Paris Agreement, the European Union (EU) will have to firmly set decarbonization targets to 2050. However, the viability on these targets is an ongoing discussion. The European Commission has made several propositions for energy and climate ""roadmaps"". In this regard, this paper contributes by analyzing alternative pathways derived in a unique modelling process. As part of the SET-Nav project, we defined four pathways to a clean, secure and efficient energy system-taking different routes. Two key uncertainties shape the SET-Nav pathways: the level of cooperation (i.e. cooperation versus entrenchment) and the level of decentralization (i.e. decentralization versus path dependency). All four pathways achieve an 85-95% emissions reduction by 2050. We include a broad portfolio of options under distinct framework conditions by comprehensively analyzing all energy-consuming and energy-providing sectors as well as the general economic conditions. We do this by applying a unique suite of linked models developed in the SET-Nav project. By linking more than ten models, we overcome the traditional limitation of models that cover one single sector while at the same time having access to detail sectoral data and expertise. In this paper, we focus on the implications for the energy demand sectors (buildings, transport, and industry) and the electricity supply mix in Europe and compare our insights of the electricity sector to the scenarios of the recent European Commission (2018a) report ""A clean Planet for all"".

Increasing the share of renewable energy sources in the electricity sector (RES-E) contributes to achieving the European energy and climate targets including a 27% share of renewables in final energy consumption by 2030. We assess the future costs of the power sector for different RES-target levels and support schemes including generation costs, system operation costs and transmission grid development costs based on three power sector models. The results show similar power system costs for different target levels. RES-E shares below 70% involve limited infrastructure costs that are below 2.6% of the overall system costs. The impacts of the modelled RES-E policies, an EU quota and national feed-in premiums on transmission costs are ambiguous: Contrary to expectations, the costs of transmission network development under quota obligations are lower than under technology-specific feed-in premiums for RES-E penetration levels up to 50%. The drivers of transmission costs include not only a concentration of renewable capacity, but also the exact location of RES-E capacity with respect to existing power plants and the strength of the existing infrastructure. Quota obligations lead to higher grid costs than feed-in premiums if the RES-E share amounts to 70% due to the stronger regional concentration of RES power plants.

China’s energy system is based mainly on coal power plants, which held a share of 69% in 2017. Large numbers of coal power plants lead to air pollution and high CO2 emissions. China has high potentials for renewable energies, which could bring about the transformation of the energy system in the future. The transition of the energy system from coal-based to renewables-based is a huge challenge. A carbon–neutral energy system is based mainly on fluctuating renewable energies like wind and solar power. In order to meet the hourly demand, flexibility options are needed to balance volatile energy production. In this paper, we construct two scenarios to analyse a carbon–neutral Chinese energy system in 2060. The first scenario focusses on electricity in order to decarbonise the energy system. The second scenario uses hydrogen for the decarbonisation. We found that storage possibilities like batteries and hydrogen play a major role in both scenarios. However, the number of installed batteries was lower in the hydrogen scenario although the installed capacity of renewable energies is higher. This is due to the increased hydrogen production in this scenario, which flattens the high solar photovoltaic (PV) peak at noon. Our results highlight the importance of flexibility options in a decarbonised energy system with a high share of renewables.

In this paper, we present a basic approach for modeling electricity and emissions markets under the paradigm of agent-based computational economics (ACE). Different market players will be modeled as independent entities using autonomous software agents; they operate and communicate independently on power markets and on markets for emission allowances. The agent types involved and their relationships are described. The aim of the model is to investigate the interplay between the market players, with a focus lying on the dynamics in a market for CO2 emission allowances and its effects on the electricity markets. Simulations with this model will enable us to draw conclusions about the economic performance of different possible emissions trading design options

Reducing CO2 emissions, as targeted by the European Union, requires the substitution of fossil fuels with renewable energies. This reduces the CO2 intensity of electricity generation and this low carbon electricity can then be used in other sectors, e.g. to decarbonize heating. Besides contributing to emission savings, this so-called sector coupling provides additional flexibility in the electricity sector and fosters the integration of renewable energies. We assess how heat pumps in district heating grids contribute to renewable electricity integration. We analyze different scenarios using the Enertile model, which optimizes capacities and dispatch of electricity and heat generation simultaneously. The results show that, the higher the achieved levels of decarbonization and renewable electricity, the more competitive heat pumps become in heating grids. Keywords: European energy system, Optimization model, Renewable electricity integration, Sector coupling, District heating grid, Heat pump

Decarbonizing the energy supply by substituting fossil fuels with renewable energy sources (RES) is a key task for the coming decades in order to achieve the EU's ambitious climate protection targets. Information about the possible development and marketability of RES in the electricity sector is essential for assessing future funding needs. However, rising shares of fluctuating RES generation in the energy system reduce the average market prices and increase price volatility. Balancing price variations requires a considerable degree of flexibility. Additional flexibility in the electricity market through closer interconnection between the electricity sector and other demand sectors makes it possible to keep the market values of RES closer to the general market price level, irrespective of their shares. Such sector coupling can thus contribute to a cost-efficient transition to a low-carbon energy system. This paper examines the impact of efficient sector coupling on the market values of RES in a European energy system with ambitious decarbonization. We analyze different scenarios by applying the Enertile model, which uses an integrated cost optimization approach with flexibility options due to sector coupling and provides a detailed future development of RES. In our analysis, we examine three flexibility options: smart charging of electric vehicles, decentralized heat pumps in buildings, and multivalent district heating grids. We show that the flexible use of electricity in district heating has a significant impact on market values, while the impact of both flexible electric vehicle charging and flexible heating with heat pumps is rather small. Short-term flexibility due to load shifting of the charging or heating process shows only a limited effect on market values. Fuel switching in district heating, however, offers the possibility to change the absolute demand for electricity in direct response to RES feed-in and drastically reduces the curtailment of RES.

Short version of the conference paper "Hydrogen as a flexibility option in the European electricity sector" presented in the 15. Symposium Energieinnovation, held on 14 - 16 February 2018, in Graz, Austria.

Short version of the conference paper "Modelling of heat pumps in heating networks and analysis of the effects on the German power generation system" presented in the15. Symposium Energieinnovation, held on 14 - 16 February 2018, in Graz, Austria.

In Deutschland gab es in den letzten Jahren zahlreiche Vorschlage zur konkreten Ausgestaltung von Kapazitatsmechanismen. Allerdings bestehen noch grundlegende Fragen, die vor dieser Diskussion geklart werden mussen – bspw. bezuglich des tatsachlichen Kapazitatsbedarfs, der Funktionsfahigkeit des derzeitigen Strommarkts und der Zielsetzung und Art eines moglicherweise einzufuhrenden Kapazitatsmechanismus. Der Bedarf an Kapazitaten ist ein wichtiger Inputfaktor fur Kapazitatsmechanismen und entscheidend fur die Frage, ob Kapazitatsmechanismen benotigt werden. Es bestehen aber sogar bezuglich der Einschatzung der aktuellen Situation Unsicherheiten. Diese beruhen auf der Einschatzung der Beitrage der Erneuerbaren Energien, aber auch anderer Kapazitaten zur gesicherten Leistung. Bestehende Studien kommen zudem zu stark abweichenden Ergebnissen bzgl. des Kapazitatsbedarfs ab 2020. Ob der derzeitige Energy-Only-Markt ausreichend Investitionsanreize fur Kapazitaten setzen kann, ist ebenfalls unklar. Die aktuell geringen Preise konnen aber nicht als Marktversagen gedeutet werden, sondern beruhen auf Uberkapazitaten durch die europaische Marktintegration und den Ausbau der Erneuerbaren Energien. Dennoch sind insbesondere die mittelfristigen Auswirkungen der steigenden Anteile Erneuerbare auf das Strompreisniveau noch nicht ausreichend untersucht. Zuletzt besteht in Deutschland derzeit keine Einigkeit uber die Zielsetzung eines Kapazitatsmechanismus. Zudem sind die Auswahl und Ausgestaltung eines Kapazitatsmechanismus kompliziert. So mussen bspw. Wechselwirkungen mit dem Energiemarkt beachtet werden. Parametrierungsfehler konnen zu hohen Kosten fuhren. Zudem garantieren auch Kapazitatsmechanismen nicht unbedingt eine hohere Investitionssicherheit. Aus Sicht der Autoren ist daher von einer schnellen Einfuhrung eines Kapazitatsmechanismus abzuraten, insbesondere da die jungst beschlossene EnWG-Novelle ohnehin den Weiterbetrieb systemrelevanter Kraftwerke zumindest bis 2017 garantiert. Eine inkrementelle Weiterentwicklung des Energy-Only-Markts sowie die genaue Analyse der oben aufgezeigten Fragestellungen erscheinen dagegen notwendig.

The German electricity market for private consumption is characterized by increasing prices and low participation of the consumers. This prompts us to investigate the interdependencies between the customers’ engagement in the market and the suppliers’ pricing strategies. Based on an analysis of the German retail market, an agent-based simulation model is developed. Whereas the behaviour of private customers is calibrated on field data, the suppliers learn to maximize profits with a feedback-learning heuristic. The simulation results show a tendency of rising prices, which are created without the assumption of tacit collusion among suppliers. We conclude that in Germany the current market pressure of private customers may not be a sufficient incentive for suppliers to lower electricity prices.

Feed-in tariffs for renewable electricity have proven to be an effective and cost-efficient instrument because they provide long-term investment security; however, they do not incentivize grid and market integration. Feed-in premiums are a relatively novel instrument designed with the objective of keeping investment risks low while allowing for improved grid and market integration. This article analyses the German feed-in premium. The evaluation of the operation during the first year gives first indications that the market premium can contribute to the system and market integration of renewable energies, while still maintaining investment security. First impacts can be seen in the following fields: Diversity of market actors, forecast accuracy, improved remote control and participation in the reserve markets. In general, it can be concluded that the German market premium has been able to trigger significant developments. However, additional assessments of the instrument are necessary in order to see whether the observed changes are sustainable and lead to the expected developments.

The increasing use of energy from renewable sources (RE) for the generation of heat and electricity in Germany has also led to an increasingly intensive debate on its advantages and disadvantages. The discussion mostly centers on the cost effects, because beneficial effects often are harder to quantify. Benefits comprise indirect effects or effects which lie far in the future. Scientific studies also frequently focus on single aspects, which cannot be aggregated easily, because they occur in different sectors and comprise technology system-wide effects, distributional effects or overall macro-economic effects. This study intends to answer questions refering to clear definitions of effects when increasing renewable energy, methods of adding and balancing the effects, the choice of methodological approach, support mechanisms, suitable time span or spatial system border. After a brief sketch of the basic methods applied, the contribution will present estimates for a wide range of effects. It closes with suggestions on possibilities how to add and balance the effects.

The German feed-in support of electricity generation from renewable energy sources has led to high growth rates of the supported technologies. Critics state that the costs for consumers are too high. An important aspect to be considered in the discussion is the price effect created by renewable electricity generation. This paper seeks to analyse the impact of privileged renewable electricity generation on the electricity market in Germany. The central aspect to be analysed is the impact of renewable electricity generation on spot market prices. The results generated by an agent-based simulation platform indicate that the financial volume of the price reduction is considerable. In the short run, this gives rise to a distributional effect which creates savings for the demand side by reducing generator profits. In the case of the year 2006, the volume of the merit-order effect exceeds the volume of the net support payments for renewable electricity generation which have to be paid by consumers.

Liberalisation, climate policy and promotion of renewable energy are challenges to players of the electricity sector in many countries. Policy makers have to consider issues like market power, bounded rationality of players and the appearance of fluctuating energy sources in order to provide adequate legislation. Furthermore the interactions between markets and environmental policy instruments become an issue of increasing importance. A promising approach for the scientific analysis of these developments is the field of agent-based simulation. The goal of this article is to provide an overview of the current work applying this methodology to the analysis of electricity markets.

Short version of the conference paper "Hydrogen as a flexibility option in the European electricity sector" presented in the15. Symposium Energieinnovation, held on 14 - 16 February 2018, in Graz, Austria.