4

Storyline development methodology and scenario drivers

This section gives stakeholders more information on the methodologies and guiding factors that shape the top-down scenario storylines.

The storylines are a key step to ensure differentiated and consistent scenarios. They aim at contrasted views on future energy demand and supply patterns to test infrastructure needs within the TYNDP process. ENTSOG and ENTSO-E use a top-down methodology to identify and define contrasting political, societal and technology underlying choices – so called “high-level drivers”.

To explain the concept some examples are useful:

  1. Electrification is mentioned from time to time as a driver or target per se; however it often results from higher level choices, lead to the adoption of electricity-using technologies (e.g. efficiency of heat pumps). Moreover, the penetration of electric appliances differs within sectors.
  2. In transport the use of energy carriers will depend on technology choices that are likely to differ between private road transport and aviation. All in all, technologies and their future market shares are identified as one specific high-level driver as part of the storylines.
Figure 03

Figure 3: How to specify storyline characteristics (example)

Storylines aim to ensure sufficient differences are made between the scenarios by correctly identifying high-level drivers and quantifying the outcomes. A key success factor to understanding these drivers is by ongoing dialogue with NGOs, policy makers and industrial companies at EU level. Based on this engagement process ENTSOG and ENTSO-E identified four high level drivers; illustrated in Figure 4.

Green transition

climate ambitions

Driving force of the energy transition

Decentralised vs centralised
Self-sufficiency vs imports

Energy intensity

Circularity vs comfort

Technologies

Supply, Demand, Sector Coupling (incl. hydrogen), E&G Flexibilities

Figure 4: High-Level Drivers of top-down scenarios

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Green Transition

Green Transition reflects the level of GHG reduction targets and is one of the most important political drivers of energy scenarios. The European Union has ratified the Paris Agreement. This implies a commitment to the long-term goal of keeping the increase in global average temperature to well below 2°C compared to pre-industrial levels and to pursue efforts to limit the increase to 1.5 °C. Since there are different emission mitigation pathways1 as described by the Intergovernmental Panel on Climate Change (IPCC), intermediate targets for 2030 and 2050 and a carbon budget up to 2100 have to be defined.

The current EU decarbonisation targets are defined under the 2030 Climate and Energy Framework2 (at least 40% cuts in GHG emissions from 1990 levels). For 2050, there are only non-binding decarbonisation targets (80 to 95% cuts in GHG emission from 1990 levels). These overall EU targets are accompanied by NECP, which each Member State had to submit to the European Commission by the end of 2019 under the Regulation on the governance of the energy union and climate action3.

However, the European Commission has announced its European Green Deal on the 11th of December 20194 and since then published several policy strategies, among others its Energy System Integration Strategy5 (ESI) and EU Hydrogen Strategy6 for the European Union. On the 17th of September 2020 the European Commission reconfirmed its proposal of  reducing GHG emission by at least -55% by 2030 and climate neutrality by 2050; this was accompanied by a supporting impact assessment7. Moreover, on the 6th of October 2020, the European Parliament voted for climate neutrality goal by 2050 in EU legislation. And at the same time they request a more ambitious 2030 target, calling emissions to be reduced by 60% in 2030 compared to 19908. The draft TYNDP 2022 Storyline Report is based on the assumption that a new EU Climate Law driven by the Green Deal will consider at least -55% GHG emissions reduction in 2030 compared to 1990.

Moreover, ENTSOG and ENTSO-E acknowledge that setting GHG emissions targets for 2030 and 2050 is not sufficient for keeping temperature rise below 1.5°C. As a result, the scenarios will consider a carbon budget including emissions and removals from agriculture and from Land Use, Land Use Change and Forestry (LULUCF). Based on the exchange with CAN Europe for the TYNDP 2020 Scenarios, ENTSOG and ENTSO-E consider a carbon budget for the EU-27 from 2018 – 2100 of 42.2 GtCO2eq per capita and 33.8 GtCO2eq by equity. The scenario building exercise will result in a decarbonisation pathway till 2050 and ENTSOG and ENTSO-E will transparently present the cumulative emissions of their scenarios in comparison with the carbon budget assumed for the EU27.

Side Note9: Carbon Budget

Carbon budgets refer to the net total of CO2 that can be emitted in a given time period taking into account the total CO2 that is removed in the same period. Hence, carbon budgets include emissions and removals from LULUCF.

The IPCC Special Report on warming of 1.5°C (SR1.5 – 2018) shows why 1.5°C is a critical threshold and assesses 1.5°C compatible carbon budgets. These carbon budgets in SR1.5 are higher than those in the IPCC’s Fifth Assessment Report (AR5 – 2014), mainly because of an effort of rebasing. The “Summary for Policy Makers of SR1.5” provides four 1.5°C compatible carbon budgets (for global CO2 emissions), with differences due to:

  • likelihood of staying within the temperature threshold: 50% or 66% (which is an expression of the number of scenarios that allow a certain carbon budget);
  • means of temperature measurement: based on computer modelling only (global mean surface air temperature) or computer modelling combined with real-time observations (GMST).

The carbon budgets in the IPCC reports refer to the available budgets for CO2-emissions, while they take into account a certain limited reduction pathway for non-CO2 emissions. Assuming stringent emission reductions of non-CO2 gases, in line with the deep reductions of CO2 emissions needed for 1.5°C compatible budgets, could help in converting CO2-budgets into greenhouse gas budgets that would according to SR1.5 Coordinating Lead Author Joeri Rogelj be approximately 25% higher.

Based on above mentioned parameters and assumptions the global carbon budget is 712 GtCO2 from 2018 onwards till the end of the century. There are multiple ways to divide the global carbon budget across countries. The main approaches take population and/or equity into account.

9 Based on exchange with CAN Europe

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Driving force of the Energy Transition

Beyond climate targets, the European energy system will be increasingly shaped by societal decisions and initiatives acting as a driving force of the energy transition. Today, the EU imports account for almost 60% of its primary energy demand, but the import needs differ highly from fuel to fuel and country to country. These large imports entering Europe through a limited number of points together with large scale thermal power generation units have shaped a rather centralised European energy system.

There is rapid decline of the indigenous gas production within the EU, amongst others noteworthy factors are the future shut down of the Groningen field and the exit of the United Kingdom from the EU-28. At least in the short to medium term, the EU-27 will need to import a higher share of its currently forecasted growth in gas demand. It is worth stating that the uptake of renewables9 has not led to lower import shares over the past 20 years10. At the same time, continued dependence on energy imports is perceived as a risk by some stakeholders due to uncertainties in the geopolitical context. In addition, the need to switch to low carbon or renewable imports triggers the question of their long-term availability. Such availability can be negatively impacted by a slow energy transition of producing countries or a situation of high global demand where Europe would be a price-taker. These stakeholders favour the maximisation of the EU RES potential facilitated by local initiatives and a greater participation of prosumers in the operation of the energy system as described in the Clean Energy Package. Following that path would move the structure of the energy system away from its current centralised structure.

Regarding hydrogen, the ESI and EU Hydrogen Strategy illustrate the duality of the driving forces. The ESI emphasizes the benefits of “linking up the different energy carriers and through localized production, self-production and smart use of distributed energy supply. System integration can also contribute to greater consumer empowerment, improved resilience and security of supply”. The EU Hydrogen Strategy also foresees “cooperation opportunities with neighbouring countries and regions of the EU” and the establishment of a “global hydrogen market”. The strategies of EU Member States present a wide range of perspectives, with some NECPs and National long-term strategies aiming at a strong reduction of energy imports while some hydrogen strategies emphasize the need for global cooperation for a future hydrogen economy. On a global scale, similar trends can be seen in Japan and Korea as importing countries and Morocco, Australia or Norway as possible hydrogen exporting countries11.

The level of decentralisation and autonomy can strongly impact the structure of the European energy system and therefore the need of infrastructure. At present there are a range of possible futures reflecting the uncertainties around societal aspiration, global evolution and technological requirement. The purpose of different scenario storylines is to understand the impact from traveling differing paths that lead to a common net-zero future.

9 Share of renewables in gross inland consumption, EC
10 EU imports in 2018, EC
11 INTERNATIONAL HYDROGEN STRATEGIES, Ludwig Bölkow Systemtechnik and World Energy Council, 2020

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Energy Intensity

Energy Intensity is a result of innovation and consumer behaviour and can be a major factor in the transition of the energy system. New appliances and technological innovation reduce specific energy demand (e.g. heat pumps) or facilitate the participation of consumer in the energy system (e.g. digitalisation and smart metering). On the other side, new technologies can lead to additional energy demand (e.g. e-scooters replacing walk or public transport). Moreover, increasing energy efficiency can also lead to an increased rate of consumption (Jevon Paradox). Heat pumps for example provide reduced energy demand through more efficient heating. But at the same this technology also provides the option for cooling, increasing energy demand in summer. Finally, consumers can reduce their consumption by modal shifts, for example using the bike instead of the car for shorter distances or by more shared economy through public transport and vehicle sharing. This also applies to agriculture and industrial sectors, were a drive towards circularity could lower energy demand, but an increase economic activity could at least in part offset the efficiency gains. Assumptions need to be made for each sector and energy application. The following table describes two examples:

SectorResidentialTransport
Sub-sectorHeatingPassenger Travelling
IssueHeat pumps in new housesIncreasing share of home-office
Issue descriptionHeat pumps have a higher efficiency, also called coefficient of performance. Moreover, in new houses with a necessary ventilation system, heat pumps can be used for cooling using a reversing valve. Recent trends show a higher share of home-office (also due to the Corona pandemic).
QuestionAlthough heat pumps will reduce the annual heat demand in buildings, will they create new electricity demand for cooling (e.g. in northern-European countries)?

How will this impact the energy system?
How will home-office influence commuting and transport demand?

Will this reduce the number of individual cars?

Will ownership still be the main trend, or will car sharing take over?

How will this influence the flexibility by vehicle2grid for the electricity system?

Table: Assumptions for Energy Intensity

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Technologies

Technological progress is a driver for the energy system evolution. It can act both as an enabler of other drivers (e.g. more powerful wind turbine helping to further harvest EU RES potential) and as a trigger (e.g. electrolysis paving the way to a low carbon hydrogen economy). Further assumptions are needed to define the market shares for different technologies/appliances.

Assumed market shares should reflect maturity and replacement rate of the relevant technologies. Assumptions need to reflect national policies/strategies and future consumer trends. Moreover, in certain cases it is necessary to make the assumptions that are specific to certain countries, sub-sectors or even individual processes.

Storyline Matrix

Storyline Matrix

ENTSOG and ENTSO-E apply the aforementioned methodology to create a storyline matrix. The storyline matrix provides an overview of each parameter taken into account and reflects the technological or societal behaviour drivers being considered. It illustrates from a qualitative perspective how they differ from one storyline to the next (and not compared to present situation). This storyline matrix is published as an annex.

Go to Annex: Storyline Matrix

All the parameter choices in the storyline matrix will go through a detailed quantification in the next stage of the scenario building process. This quantification will also account for European and national policies as well as other studies. It is important to note that a full dataset cannot yet be quantified within this draft storyline report. The full scenario data set is a result of the scenario modelling and it will be provided as part of the Scenario Report to be published mid-2021. The next chapter will provide insights on the quantitative ranges for key parameters that have a significant impact on the energy system. The purpose of quantitative ranges is to illustrate how  the storylines differ from one another. These quantitative ranges fulfil the goal set by ENTSO-E and ENTSOG to increase the level of numerical transparency as early as possible for valuable feedback during the consultation process.