The model of the global energy system by Wärtsilä, published in the Crossroads to net zero report, compares two pathways from 2025 to 2050 with the goal of reducing greenhouse gas emissions and limiting global warming, according to the Paris Agreement objectives.
In the first pathway, only renewable energies such as wind and solar power, and energy storage, are added to the energy mix. In the second pathway, balancing energy generation technologies are also added to the system, which can be rapidly increased when needed to support intermittent renewable energies.
The model shows that a power system including balancing power has significant advantages in terms of cost reduction and CO₂ emissions. This pathway would result in a cumulative savings of over $69 trillion by 2050 compared to a pathway based solely on renewable energies, due to the reduced need for renewable capacity. This would amount to an average of over $2.6 trillion per year, equivalent to more than 2% of the global GDP in 2024.
The report highlights that the effectiveness of renewable energies can be maximized if supported by balancing power plants, which are key to the expansion of renewable energies.
### Main conclusions
1. **Cost Reduction**: The study shows that, compared to a pathway based solely on renewable energies and energy storage, deploying balancing power plants will reduce the cost of future energy systems by up to 42%, equivalent to over $69 trillion.
2. **Emission Reduction**: Adding balancing energy can reduce the total cumulative CO₂ emissions from the electricity sector by 21% (19 Gt) by 2050, compared to the renewable energy pathway.
3. **Less Wasted Energy**: The model indicates that using balancing energy allows for greater optimization of the electrical system, resulting in an 88% reduction in wasted energy by 2050 compared to a pathway relying solely on renewable energy storage. This would avoid 458,000 TWh of curtailments, enough to power the world with current electricity consumption for over 15 years.
4. **Less Renewable Capacity and Land Needed**: By adding balancing power plants, renewable capacity and land requirements to meet decarbonization goals can be halved.
Anders Lindberg, President of Wärtsilä Energy and Executive Vice President, states:
“If we have more renewable energy on our grids than ever before, it is not enough on its own. To achieve a clean energy future, our models show that flexibility is essential.”
“We need to act now to integrate the right levels and types of balancing technologies into our energy systems. This means quickly phasing out inflexible assets and transitioning to sustainable fuels. Balancing power plants are not just important; they are essential to support higher levels of renewable energy.”
### Calls to Action for the Electricity Sector
Decisive actions across the entire electricity sector are crucial to achieving a low-cost, low-emission energy transition in line with the 2050 Paris Agreement. Instead of focusing solely on accelerating renewable energy deployment, a holistic system-level approach to investing in and planning energy systems is required.
#### 1. Enable Accelerated Expansion of Renewables and Balancing Technologies
– Enable rapid expansion of renewable energies by improving transmission systems, streamlining permitting processes, and investing in interconnectors.
– Rapidly expand short and long-duration balancing technologies to ensure grid reliability and resilience. Together, these technologies support the rapid growth of renewable energies, reduce dependence on inflexible assets like coal plants, and accelerate emissions reduction.
– Mobilize financing to ensure the development of renewable energy and balancing projects at scale and speed.
#### 2. Redesign Electricity Markets to Incentivize Flexibility
– Reform electricity market structures to support greater integration of variable renewable energies. Balancing should be incentivized to provide essential flexibility for optimizing energy systems.
– Increase dispatch granularity to a 5-minute resolution in wholesale energy markets. Shorter and more precise price and supply adjustment timelines will support the variable integration of renewable energies and incentivize flexible balancing power plants that can quickly respond to changes in electricity demand.
– Introduce new ancillary services to ensure grid stability. The need for ancillary services increases with higher renewable energy penetration, and supply can be combined with energy and balancing needs and provided through technologies.
– Establish viable revenue models for balancing power plants with low operating hours, including mechanisms such as capacity payments linked to flexibility and scarcity pricing.
#### 3. Choose Future-Proof Technologies and Prepare for Sustainable Fuels
– Select balancing technologies that are future-proof and ready for the introduction of sustainable fuels to fully decarbonize the energy sector from the mid-2030s.
– Support the rapid increase of renewable energies and allow for the gradual phasing out of legacy technologies, using natural gas as a transitional fuel for flexible balancing power plants. Bridging the transition with gas can reduce over 75% of annual CO2 emissions from the electricity sector by 2035 (compared to 2023 levels).
– Prepare for the introduction of sustainable fuels by creating the necessary expertise and infrastructure to ensure a smooth transition to a fully decarbonized energy sector in the future. The competitiveness or cost parity of sustainable fuels will require policy measures, which could take the form of subsidies, regulations, carbon taxes, or a combination thereof.
### To the Editors
**Contrasting Paths to Net Zero Emissions:** In this study, we define two contrasting pathways between 2025-2050 to achieve energy systems with net-zero emissions, with the ultimate goal of better understanding viable decarbonization options and approaches.
**Path 1: Renewable Energies and Storage**
In the pathway of renewable energy generation and storage, the expansion of the electricity sector is based solely on variable renewable energy (VRE) and energy storage systems (ESS). Existing power plants will be gradually decommissioned by 2040 but allowed to operate within emission limits until retirement. No new generation capacity will be introduced during the modeling horizon except for renewable energies and energy storage and generation systems.
**Path 2: Balancing**
In the Balancing pathway, the expansion is also led by renewable energy and energy storage and generation systems, but with the addition of balanced power plants that provide additional flexibility and enhance system performance. These are enabled for sustainable fuels expected to be more available in the 2030s. Existing inflexible power plants are gradually replaced with new capacity upon retirement. Capacity additions for nuclear, biofuels, and coal and gas with carbon capture and storage (CCS) follow conservative projections from publicly available sources like the International Energy Agency (IEA) and the International Atomic Energy Agency (IAEA).
## Methodology
The analyses in the Crossroads to Net Zero report are based on techno-economic optimization to determine the least-cost capacity mix needed to meet future electricity demand while respecting emissions limits and other policy constraints. Conventional power plants are included with their technical specifications and fuel sources to accurately model their emissions and role in balancing variable renewable generation. Wind and solar generation are modeled using hourly profiles based on meteorological data.
This detailed optimization employs a chronological approach, balancing renewable generation variability and hourly load from 2023 to 2050. The model co-optimizes system expansion with dispatch, using a one-hour resolution to capture detailed load and renewable generation patterns.
The global energy system is aggregated into a single model, aligning various regional energy profiles to preserve daily patterns like demand peaks and solar production regularity. This aggregated approach avoids time zone discrepancies that could distort demand and generation profiles.
[**Subscribe to our YouTube channel if you haven’t already!**](https://www.youtube.com/channel/UCrYLIWysAyv4m833zGAQ02g)
