Gas power — How much is needed on the road to carbon neutrality?

Abstract

The national and international expansion of renewable energy and the retirement of conventional capacity are increasing the challenge of ensuring generation adequacy in the European power system. New gas-fired power plants have been perceived as a promising option to secure supply. However, recent geopolitical developments have raised concerns about the high dependence on natural gas. This paper explores how different scenarios of power consumption and renewable energy targets in Germany determine the reliance on gas-fired power generation capacity in 2030, 2040, and 2050. Using the electricity market model ELTRAMOD it examines the effects of the different scenario assumptions on gas-fired capacity and generation, renewable capacity, electricity trade, and greenhouse gas emissions in Germany and abroad. The results demonstrate a clear need for reliable capacity in the future, with gas-fired capacity accounting for the largest share. In all scenarios analyzed, Europe’s dependence on natural gas increases from historical levels until 2030 and then falls only slightly below historical levels until 2040. Stricter German renewable energy targets shift natural gas use from Germany to other European countries. Phasing out coal in Germany before 2030 instead of in 2038 makes Germany dependent on reliable capacity from abroad and increases its reliance on natural gas.