CIP: Europe could reduce electricity prices by 40% by 2050 with clean energy

Europe could reduce electricity prices by 40% and fossil fuel imports by 80% by 2050, while meeting 95% of its energy demand with clean sources, according to the latest report by Copenhagen Infrastructure Partners. Achieving this would require annual investments of EUR 210 billion.

The political and investment choices on energy made this decade will determine whether Europe creates a new path or locks in its long-term vulnerabilities, Copenhagen Infrastructure Partners (CIP) pointed out.

CIP has – together with Ea Energianalyse – built an integrated energy system model, and based on that, conducted an analysis of how Europe’s energy system could evolve towards 2050 under different strategic choices.

The report Charging Ahead – A Roadmap for an Electrified, Competitive and Resilient European Energy System presents the results and analysis of that model. It is showing how the triple challenge could be solved, or how affordability, resilience and clean energy at scale can be pursued in parallel.

The report explores Europe’s energy transition through three scenarios: Competitive & Resilient, Slow Transition, and Net Zero.

“The Competitive & Resilient scenario is assessed as the most strategically relevant reference because it reflects a transition that is realistic under constraints while still supporting Europe’s competitiveness and security of supply,” the report reads.

At the same time, it highlights that a balanced approach involves trade-offs and doesn’t assume full decarbonization in every segment by 2050.

The report was launched at the WindEurope Annual Event in Madrid. Commenting on the main conclusions of the report, CIP COO Martin Neubert said that Europe doesn’t have to choose between affordability and energy security.

“Electrification fundamentally changes how the energy system operates, so by replacing imported fossil fuels with domestic renewable energy, Europe can reduce its exposure to global price volatility while bringing down power prices. As an added benefit, emissions are reduced as a direct consequence of the shift,” he asserted.

Electrification as the driver, infrastructure and system flexibility as enablers

A defining feature of the energy transition is electrification, while enabling infrastructure is the critical condition for success.

Without accelerated buildout of grids and interconnectors, new electricity generation, and power storage to maintain system flexibility, Europe cannot solve the triple challenge of delivering an affordable, resilient and clean energy system of the future, the report underscores.

The key technologies are onshore wind (570 GW) and, solar PV (1,680 GW). They are accompanied by battery energy storage systems (BESS) and other flexibility solutions, onshore wind and hydrogen.

Across power generation, system flexibility and grid infrastructure, Europe needs to invest EUR 5.2 trillion over the next 25 years – equivalent to EUR 210 billion annually – to realize a competitive and resilient European energy system, according to the report.

Europe needs market frameworks that reward not only energy volumes, but also adequacy, flexibility and system services – so the assets that keep the system reliable can be financed and delivered at scale, the report reads.