TNO experts Martin Scheepers, Ruud van den Brink and André Faaij wrote a study on the future of our energy supply in the light of the climate targets and the possible - and preferably cheapest - routes to them. They outline two different scenarios, ADAPT and TRANSFORM. A striking conclusion of both: not actively investing in sustainability, continuing down the fossil route and ignoring the climate targets could cost society billions of euros. So what’s the story?
Would you like to know more?
To find out more about the TNO scenarios for the future of our energy supply, contact Katharina Andrés.
If we do not meet the climate targets, the total system costs for our energy supply in 2050 will be higher than if we did. If we do not invest in sustainability but continue along the fossil route, it could even cost society billions of euros a year in the long run. That is the striking conclusion of the study published this spring by TNO experts Martin Scheepers, Ruud van den Brink and André Faaij.
Katharina Andrés, energy transition business developer, read the study written by her colleagues and went to 'get their story'. Because what are the underlying assumptions and calculations? How does this conclusion relate to the noises being made that climate policy is going to cost us tons of money?
To begin with, what exactly did you do, and why?
Martin Scheepers: “We have made a long-term study for 2030, 2040 and 2050 to find out how we as a country can hit the climate targets at the lowest possible cost. Prior to that, we looked at all the energy scenarios that have been made by various parties in recent years in a meta-study. We then worked out two scenarios and quantified them using our integrated energy model OPERA. These include sectors, forms of energy, regions, markets and numerous other relevant data. OPERA also contains more than six hundred technologies. With this unique optimisation model we show what the energy system will look like and what the costs will be when climate targets are achieved in various scenarios.”
Why two scenarios and why these?
Ruud van den Brink: "We chose two scenarios that are not too extreme to achieve the target of 95 percent reduction of greenhouse gases by 2050 while the economy continues to grow by 1.5 percent per year. The corona crisis appears to have put paid to that figure but in long-term scenarios you don't take that kind of disruptive development into account. The first benchmark is 2030, when everything may be completely different again.
“In the ADAPT scenario, we go for certainty and build on our economic strength. Fossil will continue to play a role for a long time to come, but we capture the CO2 and store it to reach 95%. We also import biomass for this purpose. In TRANSFORM, where sustainability comes first, we work on CO2 reduction through innovative technologies, and citizens and companies operate in a very environmentally conscious manner. CO2 capture and storage is taboo and biomass plays a more limited role.”
“The two scenarios outline two realistic developments resulting from different societal choices”
Martin adds: “The scenarios outline two realistic developments resulting from different societal choices. In both the more conservative and the innovative scenario we achieve the climate targets, only the path towards them differs. In ADAPT, the government has a more steering role and decisions are taken at national and local level on how the energy transition will take shape. In TRANSFORM, the initiative is based much more on citizens and companies who are intrinsically motivated to do something about the climate.”
An astonishing outcome of both scenarios is that the costs of the energy system will eventually be lower than if you do nothing to reduce emissions. How does that fit in with the often-heard noises that the energy transition will be very expensive?
Ruud: “You hear that a lot indeed, but I don't know what that statement is based on. Last year at TNO we published a paper which shows that innovation can make the energy transition considerably cheaper and at the same time strengthen our economy. Smart innovation leads to financial benefits, new business activity, employment and improved health. It has also been shown that solar panels, wind energy and batteries have become significantly cheaper and better in a relatively short period of time.”
“Innovation can make the energy transition cheaper and strengthen our economy”
Martin: “In the ADAPT scenario the industry will not differ substantially from its current state because we will continue to run on fossil fuel for a long time to come. In Transform we will eventually have very clean production processes and we will earn our money from services and products with high added value. But even without emission reduction as an objective, emissions will be reduced, simply because the share of sun and wind will continue to grow autonomously. And if we do nothing about emissions and remain dependent on imports of fossil fuels for a long time, we will soon lose ten billion euros more than even in the ADAPT scenario. Per year!”
Have you come across any surprises in the calculations?
Martin: “What struck me is the high degree of electrification that’s ahead of us. Electricity now plays only a modest role in our energy supply: barely twenty percent. For industry, mobility and home heating, oil and natural gas are now dominant. In the ADAPT scenario, electricity will account for more than forty percent of the energy supply, and in Transform more than seventy percent. Electricity from solar and wind energy will become very attractive for all kinds of functions: heating, mobility, industrial processes. This will be an enormous turnaround.”
“An important lesson from our study is that you must continue to invest in technological options that are still in their infancy”
The Netherlands is a small country, but energy transition is a global issue. How dependent are we on what is happening around us and what can we do ourselves?
Ruud: “As TNO we are internationally active in all kinds of technological innovations from which we will also benefit. These will make the energy transition cheaper. At the national level, there is little more you can do in your policy than remove obstacles or put incentives in place to encourage citizens and businesses to become more sustainable. An important lesson from our study is that you must continue to invest in various technological options. Make a portfolio with technologies that are still in their infancy but can grow into something promising. If you want to make large-scale use of fuels more sustainable, then as long as ships and aeroplanes are not powered by electricity, you are talking about biofuels and synthetic fuels. These are technologies that are still in their infancy. As a country, you can invest in them. You can invest mainly in technology related to specific Dutch applications. Geothermal energy, for example, is an area in which investment in reducing costs leads directly to increased use of this renewable energy source.”
For whom is the study intended?
Ruud: “This provides the government with tools for making choices. For industry, this study is useful to prepare for scenarios in which, for example, much more electricity will be used and traditional processes become electrified. Or think of supplying residual heat to heat buildings or even entire residential areas.”
Martin: “We have tried to paint a comprehensive picture, but there are undoubtedly many questions about specific sectors, regions or certain technologies. We would like to answer them. Also the 'what if' questions: what would happen if this or that changes. This provides much more insight than just looking at the results of the two scenarios. Some results are fairly robust but others are rather uncertain.”