Electrification of the hard-to-abate sectors: implication for Net-Zero power systems in Europe

This paper examines the conditions and importance of electrification in the decarbonisation of the hard-to-abate sector in Central-West Europe. We analyse energy transition pathways until 2050 for the power sector and consider the case of the chemical sector, using a novel co-optimisation model, minimising the net present cost of both sectors. We consider different carbon price trajectories, with sensitivities performed on the availability of carbon capture and storage technologies. We find that the electrification of energy used by the industry is among the key levers toward abating CO² emissions. This could lead to a two-fold increase in its electricity consumption by 2050 which in turn would have considerable impacts on the type and pace of investments required in the power sector. Additionally, not considering the impact of electrification on the growth of power demand leads to overestimated GHG reduction potential in the interim period 2025-2040 and results in a significant underestimation of electricity demand. Finally, the availability of carbon capture and storage might result in increased electricity consumption by providing more affordable electricity to downstream sectors. These results call for considering the likely investment realised in the upstream power sector when assessing preferred pathways for GHGs reduction in downstream sectors such as energy-intensive industries. Likewise, considering different carbon price trajectories would result in significantly different power demand trajectories in the chemical sector ranging from a reduction of 13% to an increase of 280% on the electricity consumption of the chemical sector, with non-negligible impacts on investments in the power sector