Getting Fit For 55 And Set For 2050 - ETIPWind

Electrification can drive the decarbonisation of Industry, Buildings andTransport Industry could directly electrify 76% of its powerand heating consumption with technologies thatare commercially available. We will need to scaleup the supply chain of these technologies, such aselectric arc furnaces and infrared heaters to meetgrowing industry needs. Industry could electrify even more of its powerand heat consumption with the development ofemerging technologies including thermal plasmaheating, electrolytic reduction of iron ore (electrowinning) and electric steam crackers andreformers. Reaching net-zero emissions in industry will alsorequire the substitution of fossil-fuel feedstockswith renewable hydrogen and derivatives in steel,cement, chemicals, and refineries. The passenger vehicles market will be fully electric by 2050. Battery electric vehicles are six timesmore efficient than conventional cars which willhelp decrease total sector demand. Battery electric vehicles will soon reach cost paritywith internal combustion engine vehicles, buttheir deployment depends largely on the currentlylagging expansion of charging infrastructure. Short-distance maritime transport can technically be electrified, but investments in ports isstill needed to provide robust infrastructure. Fordeep-sea transport, renewable-based ammoniaappears one of the most promising technologyalong with renewable hydrogen. Heat pumps will drive the decarbonisation ofheating and cooling in buildings, by almost triplingelectrification rates in residential buildings.The power grid will remain the backbone of a climate-neutral energysystem Boosting electricity grids investments is indispensable to delivering climate neutrality, system-wideplanning will allow Europe to leverage indirectelectrification notably via hydrogen valleys. One in three grid infrastructure investments havebeen delayed or rescheduled. The upcomingTen-Year Network Development Plan (TYNDP22)must address this by including all the infrastructure investments needed to deliver on Europe’s55% climate target. The EU needs to deploy an optimised offshore gridto deliver on its objective of 300 GW of offshorewind by 2050. Sea basin planning, speedingup permitting, and new market arrangementsensuring offshore hybrid projects are pre-conditions to having an optimised offshore grid. The investment framework for TSOs and DSOsshould reward anticipatory investments and investments that deliver the most TOTEX benefits, ratherthan focusing exclusively on lowering the CAPEX.A climate neutral and resilient energysystem requires investment in flexibility solutions Managing the energy system will become morecomplex as increased electricity demand andvariable renewable energy sources will increasevariability – notably in the daily time frame. With the right price signals, road transport, heatingand cooling and hydrogen production can providemost of the demand-side flexibility needed tomanage a renewables-based energy system. Grid interconnections play a crucial role in leveraging flexibility from neighbouring countries toalleviate technical constraints such as congestionand peak load. Daily flexibility needs can be provided by Stateof-the-art variable renewables, demand responsefrom industry and heat pumps in buildings andbattery storage – stationary and vehicle-to-grid. Weekly and seasonal flexibility needs can bemet by hydropower and pumped hydro-electric storage, power-to-hydrogen and the limiteduse of dispatchable power plants e.g. bioenergycombined with CCS. Grid investments need to double from the current 40bn a year by 2025 at the latest. And by 2030Europe needs an additional 85 GW of interconnector capacity on top of today’s 50 GW.GETTING FIT FOR 55 AND SET FOR 2050: Electrifying Europe with wind energy 5

Policy recommendationsWind energy will be the cornerstone of a resilient, costeffective and climate neutral energy system by 2050.By ruthlessly prioritising future-proof technologies,investments in infrastructure and the development ofthe right business models, the EU can deliver on thiswhile fully reaping the economic and societal benefitsof renewables-based electrification. To deliver on our2030 climate and energy targets and set the course forclimate neutrality we call on the EU to:1. Unlock a massive supply ofcompetitive renewable electricityby:1) S upporting National Governments in simplifyingpermitting of wind projects, and ensuringauthorities have the necessary resources toconsent enough wind sites.2) Ensuring EU State aid rules to 2030 help unlockwind investments thanks to Contracts forDifference and technology-specific auctions.3) E nsuring spatial planning mainstreams climatetargets and helps accelerate wind deployment.2. Plan for and accelerate buildoutof the infrastructure needed for anet-zero energy system by:1) D oubling the rate of investments in electricity gridssupporting anticipatory investments to addressgrowing industry demand for electricity, notablythrough the Recovery and Resilience Plans.2) Coordinating buildout of electricity grids withrenewable hydrogen infrastructure.3) U rgently addressing regulatory barriers forinvestments in an optimised offshore grid notablyin hybrid offshore power plants.4) A voiding public spending in infrastructureincompatible with a renewable electricity-basedenergy system.5) Setting national binding targets for e-charging andH2 refuelling infrastructure.6) A dapting the investment framework for grids toaccount for TOTEX and not just CAPEX savings.63. Focus Research & Innovationfunding on the technologies thatwill deliver climate neutrality byprioritising:1) I ncremental improvements in mature technologiesnotably onshore wind – digitalised operation andmaintenance and robotics.2) Grid integration and optimisation includinginteroperable HVDC infrastructure.3) B ottom-fixed offshore wind balance of plant – e.g.dynamic, smart and lead-free cables - and floatingoffshore wind design suited for industrialisation.4) S ustainable materials towards fully recyclable windturbines.5) Grants for fundamental research and mobilityschemes for early stage researchers.4. Send a carbon price signal andadapt taxation to shift away fromfossil fuel consumption by:1) A ligning the ETS with the EU’s new climate targetand setting up adjacent carbon pricing mechanismsfor mobility and buildings.2) Reflecting carbon intensity in energy taxes andlevies as part of the Energy Taxation Directive.5. Drive demand for renewables by:1) A ccelerating the uptake of corporate renewablePPAs through allowing all renewable electricity tobe underpinned by Guarantees of Origin.2) Closing the cost gap between fossil and renewablehydrogen, while accelerating the scaling up ofelectrolysers.3)  Setting targets for renewable energy consumptionin hard to abate sectors and minimum target to2030 for renewable hydrogen as a share of overallhydrogen consumption.4) S trengthening the CO2 emission performancestandards for cars and vans by setting a reductiontarget of at least 50% and moving it forward to 2027.5) Increasing requirements for renewable and efficientheating in buildings through targets for new andrefurbished buildings.

Mega trends in windenergy technology1Scaling upoffshorewindMulti-GWwind farmsConnected toseveral countries– saving space &money, optimisingpower tradingVery largeturbines ( 15MW)2345Industrialisingfloatingoffshore windHappyco-existencewith theonshoreenvironmentand societyRepoweringonshorewindWind isgoing 100%circularTapping intomassive windresources in areaswith deep watersMinimisingimpacts withbirdsMaking the mostof the best windsitesRecycling windturbines for ttechnologyUsing recycledmaterials in newturbinesOptimisingland useMore poweroutput with fewerturbinesNew easy-torecylce bladematerialsMoving to serialproduction ofsubstructures,dynamic cablesand anchorsOffshorehydrogenproductionGETTING FIT FOR 55 AND SET FOR 2050: Electrifying Europe with wind energy 7

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IntroductionThis report looks at how the electrification of theeconomy, directly and indirectly through the use ofrenewable feedstocks, gases and fuels, is the mostefficient and affordable strategy to decarboniseEurope.Chapter 1 summarises the 2050 decarbonisationscenarios of the European Commission. It explainsthe role of electrification in reducing final energydemand and emissions. It explains the implicationsof this for the power sector and considers the widereconomic impact.Chapter 2 explores the role of wind energy indecarbonising the energy sector. The technologicaltrends that are bringing down the cost of wind energy.And other cost considerations beyond the cost ofelectricity.Chapter 3 explains why most energy consumers willopt for direct electrification with renewables. Forthose facing significant obstacles to decarbonisation(the so-called harder-to-abate sectors), we look at howthe indirect use of renewable electricity to producehydrogen and its derivatives will play a crucial role.Chapter 4 presents the system infrastructure neededto make the decarbonisation of the economy possible.We look at the pace required to expand the power grid.And priorities to maximise energy system resilienceto cope with increasing extreme weather effects andother risks.Chapter 5 dives into the enabling technologies thatmust accompany renewable energy sources on thepath towards decarbonising of the energy system.We focus on the technologies that will help facilitateflexibility needs in the power sector driven by newusers of electricity and larger shares of variablerenewables.Chapter 6 gives recommendations to enable fasterdeployment of wind energy and renewable-basedelectrification. What enabling policies will fostermarket uptake and technological innovation both inthe supply and demand sides?GETTING FIT FOR 55 AND SET FOR 2050: Electrifying Europe with wind energy 9

1The path towards net-zeroCO2 emissionsThe EU has pledged to reach net-zero carbonemissions by 2050. It will need to abate the 3.5 Gigatonnes of CO2 equivalent1 it emits per year today.Energy use is responsible for three quarters of theseemissions. Transport, buildings, and industry are eachresponsible for approximately 30% of energy-relatedCO2 emissions. Decarbonising these sectors is vital toreach the net-zero target.The EU has no time to lose in aiming for climateneutrality. Frontloading emissions reduction over thenext decade is possible and would be beneficial forthe climate and the economy. By 2030 the EU alreadypledges to reduce its emissions by 55% comparedto 1990 levels. To this end, the share of renewableenergy in final demand will need to double from 20%today to 38-40% by 2030.GHG Emission reductions to bon Removal TechnologiesIndustryResidentialLand use and forestsTransportNon-CO2 AgriculturePowerTertiaryNon-CO2 other2050Net emissionsFigure 1. EU-27 GHG emissions reductions to 2050 compared with fig.199001levels. Source: European Commission Impact Assessment, 2020.10

The European Commission has made it clear thatin order to become the first net-zero emissionscontinent, we have to see increased renewablesbased electrification in Europe. This expansion ofclean electricity will supply energy across all sectorsof the economy and rapidly decrease final energydemand as well.Total electricity production will double from 2,760TWh today to 6,800 TWh by 2050. And most ofthis will be renewable electricity. The EuropeanCommission expects renewables to provide at least81% of electricity in 2050. Wind energy will be themain electricity source after 2025, supplying 25% ofthe EU’s electricity needs. By 2050 it will supply 50%of the EU electricity mix; onshore and offshore windrepresenting 33% and 17% respectively.As it stands electricity accounts for only 25% ofthe energy consumed by industry, transport, andbuildings. The European Commission says electricityshould cover at least 30% of final energy demandby 2030 and at least 57% by 2050. This is more thandouble today’s electricity share in the energy mix.Europe's electricity mix to 20507,0006,0005,0004,000Wind energy 50%Annual electricity generation in 302035204020452050CoalGasOilFossil fuel with CCSNuclearWind onshoreWind offshoreSolarOther RESBioenergy with CCSFigure 2. EU27 Electricity production mix to 2050. Source: WindEurope based on European Commission Impact Assessment, COVID MIXscenario, 2020.fig. 02GETTING FIT FOR 55 AND SET FOR 2050: Electrifying Europe with wind energy 11

Other scenarios4 have shown that decarbonisationwould be achieved with similar or higher directelectrification rates (around 60%). There is wideconsensus that direct electrification will need todouble in scale. The energy system, particularly thepower grid, will need to rapidly expand and evolve toaccommodate the production of these new fuels bycoupling renewable power plants, electrolysers andeditable charts from fig03related hydrogen infrastructure.Electricity will be responsible for meeting about 76%of the final energy demand, 57% directly and 18%indirectly using hydrogen and e-fuels3.Roughly two thirds of the electricity produced will bedirectly used by industry, buildings and transport, asthis is the most efficient way to use the energy. Andone third of the electricity will go towards producingrenewable hydrogen and its derivatives, such asammonia and e-kerosene. By 2050 these fuels wouldprovide 18% of final energy demand2, allowing hardto-abate sectors to decarbonise.Final energy demand by energy city1%Natural gas8%Distributedheat13%Bioenergywith dheat22%Natural gas9%HydrogenNOTE: We assume that 100% of the ‘’other RES’’ presented in the EC's scenario is ambient heat powered by heat pumps, which is allocated to direct electrification. It assumes 100% of hydrogen to be produced from electricity by 2050. E-fuels are also produced through electrolysed hydrogen, as specified in the ECimpact assessment.Figure 3. EU-27 final energy demand by energy carrier. Source: European Commission Impact Assessment, COVID MIX scenario, 2020.Energy system costs in 2050 will be roughly the sameearlier investments start to pay off the costs will beginas a share of GDP as in 2015. But the value of thefig. 03to drop. By 2050 the annual cost should be worthenergy system will be much higher than it is today10.4%, or below 2015 levels.as the externalities of fossil fuels such as the costA net-zero economy by 2050 can be achievedincurred by air pollution, water consumption andwhile yielding benefits in the form of renewableland use will be mitigated by the uptake of renewableelectrification – central to the energy system'senergy technologies. The overall societal return ontransformation. But as will be shown in the followinginvestment will be positive. In 2015, energy systemchapters, a number of crucial questions remaincosts represented 10.6% of the EU-27 GDP. In thewhich policymakers and industry leaders will need toperiod up to 2030 the average annual energy systemaddress going forward.costs would need to be worth about 11% of GDP tomeet the new 55% GHG reduction target. But once12

2The role of wind energyin the energy systemtransformation2.1 The potential and ambitionsfor wind energy in EuropeWind energy is a natural, clean, sustainable, and readily available energy source. And Europe has abundantwind energy resources. Public acceptance (not in mybackyard syndrome) and technical constraints notwithstanding, wind resources in Europe have the potential to generate more than 33,000 TWh annually5.This would be enough to meet Europe’s annual elec-tricity demand ten times over. More than 8,000 TWhcould be produced by onshore wind and more than25,000 TWh from offshore wind. 60% of that would beaccessible through floating solutions in waters deeperthan 60m.In 2020 wind energy produced 458 TWh in Europe(382 TWh in the EU27), making up 15% of the EU-27'selectricity mix, and overtaking coal generation for thefirst time6.Electricity oalOilGasNuclearHydroWindSolarBioenergy2030Figure 4. Electricity mix EU27. Source: Eurostat, Ember and WindEurope for historical data. Projections: European Commission ImpactAssessment, COVID MIX scenario, 2020.fig. 05GETTING FIT FOR 55 AND SET FOR 2050: Electrifying Europe with wind energy 13

average. And we are beginning to see the first ordersfor onshore turbines with a capacity of 6 MW. This ismainly due to the new auction system and high market competition, which leads manufacturers to develop and bring newer more powerful models onto themarket earlier, improving the economics of wind farmprojects.To deliver a climate neutral economy we will need tomake greater use of today’s' wind energy potential.The European Commission's scenarios see wind becoming the main electricity source for the Europeanpower system shortly after 2025 – by 2030 it will cover25% of all electricity needs. Wind energy will also cover50% of Europe’s electricity production and one third oftotal final energy demand, as presented in chapter 1.At the same time, the average size of onshore windfarms has doubled in the last four years, driven bythe Nordic markets and Spain where there are fewerspace constraints than in central and western Europe.Onshore wind would be expected to generate about2,300 TWh per year by 2050. For offshore, the figurewould stand at 1,200 TWh. Together they would generate more electricity than that produced for the wholeof Europe today. However, the split between onshoreand offshore is indicative. The International EnergyAgency for example expects offshore wind to becomethe largest source of electricity in Europe as soon as20407. The differences in these predictions stem fromunderlying assumptions about costs, capacity factorsand lifetime, as discussed in section 2.2.The growth in turbine sizes is even more pronouncedin offshore wind. In the last 20 years the average turbine capacity of offshore wind turbines has increasedfourfold. Offshore wind turbines installed in 2000 hadan average capacity of 2 MW; in 2020 it was more than8 MW, and growth is accelerating. It took the industry15 years to go from 2 MW to 4 MW and just five yearsto go from 4 to 8 MW. In the next three to four yearsthe industry expects to install 12 - 15 MW wind turbines in European waters.2.2 Technology improvementssupport cost reductionLike onshore wind, the average size of offshore windfarms is also increasing. It has grown from around400 MW in 2010 to almost 800 MW in 2020. This increase can be directly linked to increased turbine size,the experience in the sector and increasing confidencefrom investors and Governments.The average size and power of wind turbines hasgrown significantly in the last 20 years.In 2000 the average size of an onshore wind turbinewas still below 1 MW. Today they are almost 3 MW onOnshore wind farm and turbine sizeAverage wind farm size2532015210150Average wind farm size (MW)fig. 052019202020182017Average turbine power rating (MW)Figure 5. Average annual installed wind farm size and average turbine power rating for onshore wind in 419931991199219900Average turbine power rating430

9800870076006Average wind farm size 00Average turbine power rating9002001Average wind farm sizeOffshore wind farm and turbine sizeAverage turbine power rating (MW)Figure 6. Average annual installed wind farm size and average turbine power rating for offshore wind in Europe.But more powerful turbines need bigger components.The growing demand for wind energy will lead to newLimiting the weight is essential to sustain the mass demanufacturing technologies. Components not onlyployment and cost reduction potential of more powget bigger, but also more sought-after. Further moderful turbines. In bottom-fixed offshore wind leanerularisation and standardisation in designs will unlockfig. 06the benefits of industrialisation. This is true for bothdesigns, innovative transition pieces and turbine uprating could reduce the relative weight of the monothe large components (blades, generator, gearb

Europe. Onshore wind energy will fall another 28% to 2030 to 33 /MWh. Offshore wind will also see significant cost reduc-tions by 2030. Bottom-fixed offshore wind costs will fall by 44% to 48 /MWh and floating offshore wind costs will fall by 65% to 64 /MWh. Offshore wind turbine size will double in the next