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Core Working Groups workshops: “Optimal Transition”

18.07.2023 | Workshops

The workshop, centred on the theme of Optimal transition, aimed to facilitate collaboration between the IAM COMPACT modelling team and policymakers, industry, and civil society representatives. By engaging with senior energy and climate policymakers, we have identified key priorities for achieving an orderly transition that addresses current challenges to both EU policy and the materialisation of greener infrastructure. CWG’s contributions are envisaged to directly influence our research.

During the workshop, we sought valuable insights on our research agenda, realistic scenario design, and potential applications of our analysis. We discussed two related modelling studies:

  1. How does the implementation of the updated draft National Energy and Climate Plans / Fit-for-55 compare to the cost-optimal EU approach? This study is led by BC3.  
  2. How can we evaluate the effects of energy system flexibility measures? This study is led by Aalborg.

At the start of the workshop, a brief introduction of IAM COMPACT as well as the aims of the workshop were discussed by Bruegel. Then, study leads briefly presented the background and approach of both studies, before splitting into two break-out rooms.

Room 1: NECPs/Fit-for 55

Topics for discussion: 
•    Relevant indicators to compare between NECP/Fit-for-55-informed and cost optimal scenarios. 
•    EU-wide policy targets (renewables, efficiency) and updates regarding the energy crisis 
•    Conditions for the role of the electricity system in complying with Fit-fir-55 targets.

The session was facilitated via Miro, which helped us gather the necessary feedback.

















Stakeholders wanted to know more about the electricity modelling and the connection between IAMs of IAM COMPACT and EXPANSE electricity system model – which may primarily reflect stakeholders’ backgrounds. Specifically, they focused on the understanding of needed flows for interconnections and analysis of volatility and flexibility. 

Regarding modelling results, they were mostly interested in household and industrial energy prices, energy system investment costs, renewable energy adoption, and total installed capacity of electricity storage and/or electric vehicles. There was also interest in whether the sum of the NECPs achieves the GHG emissions goal in the IAMs.

Finally, there was a lot of discussion around sensitivities that stakeholders thought would be important, including: 
•    Renewable penetration (especially solar PV) and early achievement of renewable energy targets 
•    Mid-term and long-term technology costs 
•    Supply shocks (fossil fuel prices) 
•    Climate impacts and feedbacks (cooling and power plant cooling) 

Room 2: Cost, security, and resilience

Topics for discussion:
•    Suitable indicators for on energy security, energy system resilience, and energy system costs
•    Energy system flexibility measures and technologies to be included in analyses.
•    Broader SDG impacts of decarbonizing energy systems – topics to be included for evaluation

The session was facilitated via Miro, which helped us gather the necessary feedback. 

Stakeholders were very interested in the question of flexibility and saw a need for further assessment of 1) the demand for flexibility (how much flexibility is actually needed), and 2) what the potential for flexibility is (how much can be provided within the energy system). Both these questions are naturally impacted by technologies and market structures, and hence the discussion also circulated on what technologies and flexibility measures are most relevant to include in analyses. These include, but are not limited to, various forms of energy storage (electricity, pumped hydro, methane, hydrogen), interconnection and grid infrastructure, smart grids, price signals (locational/zonal pricing), V2G charging, domestic heat pumps. Defining flexibility needs some attention, both in terms of spatial scale (national, regional, local), and temporal scale (seconds, minute, hourly, annual). 

The question on energy system security was also among stakeholders considered timely and relevant. Key indicators should be able to evaluate aspects of: 

•    Supply diversity (gas supply diversification, raw material supply, oil depletion scenario, biophysical limits). 
•    Import dependency (supply chain diversity, geopolitical conflict constrains, non-energy resources - e.g., rare earths etc).
•    Clean tech manufacturing (What part of the value chain of a technology within EU boundaries, e.g. batteries, Share of domestic manufacturing). 
•    Reliability indicators (Ancillary system needs, for electricity: Loss of load expectation (LOLE), Expected energy not served (EENS), Prices 
•    Interconnection relevance

The discussion on resilience started with a discussion on how to distinguish security and resilience. A general agreement could be established that security is mainly connected to long-term issues, whereas resilience is the evaluation of the short-term functioning of a system, including short-term fluctuations, demand side response, etc.. One indicators of resilience could include evaluation of what level of system shock the system is able to address (e.g., X amount of MW outage). 

Further important aspects to be included in indicators include: 
The available dispatchable capacity of a system, and the dependency on fossil fuel based dispatchable capacity, and dependency on water/river availability for dispatchable hydro power. Resilience of RES infrastructure to more intense weather/storms, adaptation vs no adaptation scenarios, impacts of temperature variations. 

•    Flexible demands (smart meters, V2G, variable price contracts for end users and elasticity of demand). 
•    Electricity demand (energy efficiency, steeply rising el. demand for cooling (in absolute terms, since it will rise also in countries where now it's nearly 0), climate dependency of demand). 
•    Price cannibalisation of RES (Storages could, in the future, help balance electricity prices 
•    Consideration of various risks e.g., climate hazards).