The European renewable energy target for 2030 – An impact assessment of the electricity sector

Abstract

The European Union set binding targets for the reduction of greenhouse gases (GHG) and the share of renewable energy (RE) in final energy consumption by 2020. The European Council agreed to continue with this strategy through to 2030 by setting a RE target of 27% in addition to a GHG reduction target of 40%. We provide a detailed sectoral impact assessment by analyzing the implications for the electricity sector in terms of economic costs and the regional distribution of investments and shares of electricity generated from renewable energy sources (RES-E). According to the Impact Analysis by the European Commission the 27% RE target corresponds to a RES-E share of 49%. Our model-based sensitivity analysis on underlying technological and institutional assumptions shows that the cost-effective RES-E share varies between 43% and 56%. Secondly, we quantify the economic costs of these variants and those which would be incurred with higher shares. The long-term additional costs for higher RES-E shares would be less than 1% of total system costs. The third aspect relates to the regional distribution of EU-wide efforts for upscaling renewables. We point out that delivering high RES-E shares in a cost-effective manner involves considerably different efforts by the Member States.