This report explores the current context and opportunities for emission reduction in the European power sector. It describes the political framework within which emissions reduction in the EU takes place and the key drivers determining the speed of emissions reduction in the power sector. These drivers are presented at the backdrop of three case studies, with potential lessons for other countries.

It also assesses a suite of recently published scenarios resulting in an (almost) complete decarbonisation of the power sector from the perspective of compatibility with the Paris Agreement. On this basis, we list a number of policy repercussions and co-benefits resulting from transition towards a fully decarbonised power sector and provide a number of lessons learnt that can be used by other countries undergoing energy transition.

The European power sector is at the forefront of decarbonisation of the EU’s economy. Between 1990 and 2019 greenhouse gas emissions from the sector decreased by 44%, with a significant acceleration even before the COVID-19-induced economic crisis. The share of renewables has almost tripled, from below 13% at the beginning of that period to almost 36% in 2019 and could even exceed 40% in 2020. These changes are the result of a governance framework which underwent numerous changes over the last three decades – especially since 2000.

The introduction of support mechanism for renewables, carbon pricing in the framework of the EU ETS, EU’s air quality regulations, and more recent decisions of the majority of the EU member states to phase out coal, were the main drivers of these changes. These drivers played different roles in different EU member states. The introducion of feed-in tariffs was the main early driver of transformation in many countries. This was also the case in Germany and Spain, two out of three case studies we look into in more detail.

Policy continuity and predictability is essential not only for moving the transformation forward but also decreasing its economic and social costs. A case in point is the experience in all three countries analysed in more detail in which radical policy change resulted in a significant slow down in new PV installations in Germany, and a collapse of domestic market for renewable energy industry Spain (for PV) and Poland (for wind) accompanied with job losses.

Evaluating the near and long-term role of carbon dioxide removal in meeting global climate objectives

For 1.5°C pathways with limited overshoot, most of the mitigation between now and 2030 should come from emissions reductions (70%), with reductions from cutting non-CO2 emissions (20%) and land-based carbon dioxide removals such as afforestation and preventing deforestation (10%) making up the remainder.

Submission to the Australian Treasury consultation on the Petroleum Resource Rent Tax

As the gas industry in Australia has grown exponentially, the profit taxes it pays to the government have proportionally plummeted, presenting an opportunity to change this regime. Here, we respond to the Australian Government Treasury consultation on the Petroleum Resource Rent Tax (PRRT) – anti-avoidance provisions and clarifying treatment of ‘exploration’ and Mining, Quarrying or Prospecting Rights.

Wind and solar benchmarks for a 1.5°C world

This report presents a detailed methodology for determining the amount of wind and solar capacity that is required for a country to align with the Paris Agreement’s 1.5°C temperature goal. While the focus of the report is the method, it includes illustrative benchmarks for Brazil, China, India, Indonesia, Germany, South Africa.

A 1.5°C future is possible: getting fossil fuels out of the Philippine power sector

The Philippines is also one of the fastest-growing developing countries: poverty is in decline, access to energy is rising and, with that, demand for energy services. However, fossil fuels still dominate the energy system, accounting for 78% of power generation in 2022. This report sets out what the Philippines government needs to do to get the country’s power sector onto a 1.5˚C compatible emissions pathway, replacing fossil fuels with renewable energy.

About us

Decarbonisation targets and 1.5℃ pathways

Comment

Decarbonisation pathways for the EU power sector

Publications

Evaluating the near and long-term role of carbon dioxide removal in meeting global climate objectives

What good looks like: G7 climate policy 2024 update

Tripling renewables by 2030: interpreting the global goal at the regional level

Submission to the Australian Treasury consultation on the Petroleum Resource Rent Tax

COP28 initiatives will only reduce emissions if followed through

Unabated: the Carbon Capture and Storage 86 billion tonne carbon bomb aimed at derailing a fossil phase-out

No change to warming as fossil fuel endgame brings focus onto false solutions

Submission on Australia's future gas strategy

When will global greenhouse gas emissions peak?

Wind and solar benchmarks for a 1.5°C world

A 1.5°C future is possible: getting fossil fuels out of the Philippine power sector

State of Climate Action 2023