Smart grids key to Europe’s low carbon economy


Brussels, Belgium — (METERING.COM) — March 22, 2011 – Investment in smart grids is a key enabler for a low carbon electricity system, notably facilitating demand side efficiency, larger shares of renewables and distributed generation, and enabling electrification of transport, and as such will play a key role in achieving a low carbon economy in Europe.

According to the European Commission’s roadmap for moving to a competitive low carbon economy in 2050, with an almost 100 percent share of low carbon technologies in the electricity sector by 2050, CO2 emissions could be then almost totally eliminated from the electricity sector. Currently the share of low carbon technologies in the electricity mix is estimated at around 45 percent and the 2020 target would be around 60 percent.

The roadmap is aimed at achieving the objective of an 80-95 percent reduction in greenhouse gases by 2050 compared to 1990, which is necessary to keep climate change below 2ºC. In addition to the electricity sectors, the other sectors that would contribute are industry, transport, residential and services, and agriculture.

Given that the central role of electricity in the low carbon economy requires significant use of renewables, many of which have variable output, considerable investments in networks are required to ensure continuity of supply at all times, the roadmap states. However, for grid investments, benefits do not always accrue to the grid operator, but to society at large. In this context, future work should consider how the policy framework can foster these investments at EU, national and local level and incentivize demand side management.

In addition to smart grids, other forms of low carbon energy sources, their supporting systems and infrastructure, include passive housing, carbon capture and storage, advanced industrial processes and electrification of transport, including energy storage technologies, and these will start to form the backbone of efficient, low carbon energy and transport systems after 2020. This will require investment estimated on average over the coming 40 years at around €270 billion annually. This represents an additional investment of around 1.5 percent of the European Union’s GDP per annum on top of the overall current investment representing 19 percent of GDP in 2009.

However, much or all of this extra investment should be recovered through lower import bills for oil and gas, with savings estimated at €175-320 billion a year.

The roadmap should be taken into account in the development of EU and national policies, and as a next step, the Commission also expects to develop energy and other sectoral specific roadmaps.