The European electricity market towards 2050

2050 climate and energy policy will have impact on the European energy markets, and thus affect the Norwegian energy system. Some factors that will be considered are i) alternative climate targets, in particular, the official aim of the EU of a 80 percent emissions reduction by 2050, ii) the degree of flexibility between emissions reductions in ETS and non-ETS sectors (one corner case is full flexibility), iii) the degree of flexibility between non-ETS emissions reductions across countries, and iv) the impact of alternative targets for the share of renewables in final energy demand. The importance of cost reductions for renewables will also be considered. We will use the numerical energy market model LIBEMOD.

The second part of this project examines the impact of batteries as a storage technology for wind power and solar, using, for example an extended version of a numerical energy market model. In particular, we will study:

• At what cost level will it be profitable to use batteries as a storage technology for wind power and solar?

• What are the impacts of a radical reduction in costs of batteries for intermittent power on the European electricity markets and the Norwegian energy system?

• Should batteries be installed at the production site for intermittent power or among end users?