NEW TARGETS USING OLD PATHWAYS?

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Strategies for a greenhouse gas neutral energy supply by 2045

NEW TARGETS USING OLD

PATHWAYS?

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a

Institute of Energy and Climate Research – Techno-Economic Systems Analysis (IEK-3) Forschungszentrum Jülich GmbH | D-52425 Jülich

b

Chair for Fuel Cells RWTH Aachen University

c/o Institute of Energy and Climate Research (IEK-3) Forschungszentrum Jülich GmbH | D-52425 Jülich

MANAGERIAL SUMMARY

Managerial Summary

With the new Federal Climate Change Act¹ (KSG), Ger- many has committed to reducing anthropogenic emissions to the point of net greenhouse gas neutrality (net zero) by 2045. After this point, the aim is to achieve negative greenhouse gas emissions. Compared to previous regulations, the new act outlines a tightening of climate protection goals for 2030 in addition to new annual reduction targets up until the year 2040, both of which are legally binding. Achieving greenhouse gas neutrality and shortening the time frame for the transformation process both present a particular challenge in contrast to previous regulations. Compared with the greenhouse gas reduction goals agreed as part of the European Green Deal, Germany’s new statutory targets are much more ambitious both in terms of the quantitative reduction targets and the remaining time frame for action.

Against this backdrop, the question arises as to which pathways and strategies should be taken to achieve these new, much more ambitious targets. Moreover, there is a need to analyze whether the strategies pur- sued so far are still valid or whether they need to be amended.

The greenhouse gas reduction scenario (KSG2045) analyzed within the scope of this study is exclusively oriented to the overarching reduction targets of the current Climate Change Act. Individual analyses also cover various discussions that serve to classify the robustness of statements, for example. For the analysis, the ETHOS² model family is used, which was developed by the Insti- tute of Energy and Climate Research – Techno-Eco- nomic Systems Analysis (IEK-3) at Forschungszentrum Jülich. It allows for the energy system to be depicted on various scales with all its interactions and pathways.

The spectrum ranges from detailed regional analyses of the possible expansion of wind power and photovoltaics up to spatially resolved energy infrastructure analyses in hourly resolution. Furthermore, future global energy markets (e.g. synthetic fuels, hydrogen) can be simulated and potential energy imports and exports esti- mated within the context of the transformation process.

It is also possible to conduct integrated infrastructure analyses that simultaneously account for all relevant energy carriers (electricity, gas, hydrogen, heat).

The scenario presented here is a cost-optimized strategy. For this scenario, an energy system model was used that depicts the national energy supply – from energy resources to energy consumption on a sectoral level – in great detail. The model provides a strategy to minimize costs while upholding the exogenously set framework conditions (e.g. adherence to greenhouse gas reduction targets; coverage of energy-related demand). The distinctive feature of the chosen approach,

1 Federal Climate Change Act of 12 December 2019 (Federal Law Gazette I, p. 2513), as last amended by Article 1 of the Act of 18 August 2021 (Federal Law Gazette I, p. 3905)

2 Energy Transformation Pathway Optimization Suite

3 BECCS: Bioenergy with carbon capture and storage

which takes competitive cost considerations into account, is that all interactions within the energy system can be simultaneously accounted for.

The analyses highlight the fact that a fundamental re- structuring of the German energy supply across all sectors is required to meet the more stringent greenhouse gas reduction targets and to achieve greenhouse gas neutrality. Provided that there is a willingness to take action and an acceptance among all stakeholders, the required transformation process can be considered via- ble from a technical and an economic standpoint.

The results show that...

1.

a much higher dynamic of change is required compared to the objectives of the previous Climate Change Act. The tightening of intermediate objectives for 2030 up to 2045 has set the course for achieving this. Due to the very short remaining time frame of less than 25 years, it will be crucially important to introduce the necessary measures at all levels in the next few years and to create the framework conditions required to achieve objectives such as building up the production of renewable electricity at a much stronger rate than is currently the case, as well as establishing the infrastruc- tural conditions for transport, distribution, and storage.

2.

the new Climate Change Act will also pave the way for the period after 2045. A future yardstick will therefore be the achievement of negative emissions.

The initiation of a circular carbon economy with ap- propriate carbon management needs to form part of the required implementation strategies today.

3.

to compensate for the remaining emissions after 2045, technical processes (direct air capture, BECCS³) will be required to remove carbon dioxide produced as part of the natural carbon cycle from the atmosphere. These processes must be developed to market maturity to ensure that they are available in good time.

4.

greenhouse gas neutrality can only be achieved by capturing CO2 outside the atmosphere, for example through the geological storage of CO2. The potential for negative emissions outlined in the Climate Change Act, which would be achieved through land use, land- use change, and forestry (LULUCF) activities, is not sufficient to compensate for the remaining greenhouse gas emissions in 2045. This is why there is a need for geological storage. The required annual storage volume in

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INTRODUCTION

2045 is in the range of 50 to 90 million tonnes of CO2. To achieve this, legal frameworks need to be put in place, for example an amendment of the current carbon dioxide storage act (KSpG). Moreover, logistics concepts need to be developed and implemented to transport the CO2 to geological storage sites as well as other locations for further use.

5.

crude oil and natural gas will have to be phased out in all sectors (buildings, transport, industry) over the next two decades.

6.

at roughly 22 %, the energy import rate in 2045 will be much lower than it is today. This will increase security of supply from a geostrategic standpoint and will also reduce energy price risk.

7.

electricity consumption will more than double from today’s level. The reason for this is the future switch to electricity-based applications in all sectors. In the building sector, this will involve the use of around 7 million heat pumps by 2045. Another driver of the increased electricity demand will be domestic hydrogen production, which will account for roughly one quarter of electricity consumption.

8.

greenhouse gas neutrality can only be achieved through a significant expansion of renewable energy (wind, photovoltaics, bioenergy). The energy produc- tion potential required to do so is already available. The annual expansion rates for wind power and photovoltaics need to increase many times over compared to the rates of previous years. The annual expansion rate for the installation of onshore wind farms alone must increase on average to roughly 6.3 GW. In order to reach the necessary level and pace of expansion, existing rules (e.g. distance regulations) need to be modified and legally stipulated planning periods must be short- ened.

9.

an earlier phase-out of coal power by 2030 must be part of the cost-optimized reduction strategy to achieve greenhouse gas neutrality. An earlier phase-out will lead to a much lower carbon footprint for electricity generation and will pave the way for the accelerated expansion of electricity-based applications (e.g. heat pumps, electric vehicles).

4 Resolution dated 24 March 2021, 1 BvR 2656/18, 1 BvR 96/20, 1 BvR 78/20, 1 BvR 288/20, 1 BvR 96/20, 1 BvR 78/20; see also Federal Constitu- tional Court press release Nr. 31/2021 dated 29 April 2021

5 Federal Climate Change Act as of 12 December 2019 (BGBl. I, page 2513)

6 Energy Concept for an Environmentally Sound, Reliable and Affordable Energy Supply dated 28 September 2010, www.bmwi.de

10.

the use of hydrogen will be an essential aspect of the transformation. This particularly applies to industry, as there are some sectors (e.g. the steel and chemical industries) where the use of hydrogen will be abso- lutely necessary to avoid greenhouse gas emissions.

Hydrogen requirements in 2045 will amount to around 410 TWh.

11.

there is huge potential in all sectors for cost- efficient energy-saving measures, which should be tapped into as soon as possible. Efficiency measures can help to reduce the current level of final energy consumption by roughly 30 %. In general, energy savings will lead to a reduced production of electricity, heat, and hydrogen, which in turn will lower the required expansion of capacity.

1 Introduction

In a ruling⁴ announced on 29 April 2021, the Federal Constitutional Court determined that the Climate Change Act⁵ was partly unconstitutional in its then form.

For example, the continued pursuit of measures to reduce greenhouse gas emissions in the period after 2030 was deemed to be insufficient. In particular, the ruling requires the legislature to regulate the continued pursuit of reduction targets for the period after 2030. The new Climate Change Act is a response to this Federal Con- stitutional Court ruling. Targets up until 2030 have been tightened considerably, with the original reduction goal of 55 % for 2030 having been raised to 65 %. While the targets set out in the Federal Government's Energy Concept⁶ for the period after 2030 previously served more as a guide, the new Federal Climate Change Act has now set legally binding goals for this period. For instance, a reduction target of 88 % has been set for 2040, an increase of 18 percentage points from the goal outlined in the Energy Concept. Furthermore, the aim is to achieve greenhouse gas neutrality (net-zero emissions) by 2045. This represents another significant tightening of the target previously outlined in the Energy Concept, which had strived for an 80–95 % reduction in emissions by 2050. The new Climate Change Act aims to achieve negative greenhouse gas emissions after 2050. No quantitative goal has been set, however. The new act also emphasizes the contribution of natural ecosystems to climate protection by incorporating for- ests and moorlands as natural sinks that compensate for unavoidable greenhouse gas emissions. However, it remains to be seen whether and how the offsetting role of these natural sinks will be regulated at EU level.

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SCENARIO DEFINITION

Against this backdrop, the new Climate Change Act en- visages adapting current regulations in line with EU rules through legal provisions.

In summary, the new objectives of the Climate Change Act represent a considerable tightening of previous goals. This applies both to the extent of the reduction targets and the year by which greenhouse gas neutrality should be achieved.

Against this backdrop, the question arises as to which pathways and strategies should be taken to achieve these new, much more ambitious targets. Moreover, there is a need to analyze whether the strategies pur- sued so far are still valid or whether they need to be amended. It is also necessary to identify and quantify new challenges from a technical and an economic standpoint. These topics and issues will be addressed in the present study. The main focus of the analyses will be on the period between 2030 and 2045.

The ETHOS⁷ model family was developed at For- schungszentrum Jülich’s Institute of Energy and Cli- mate Research – Techno-Economic Systems Analysis (IEK-3). Its uses include calculating cost-optimized greenhouse gas reduction strategies for Germany in various levels of detail. A number of the ETHOS family models were used for the following analyses. At the heart of the analyses is the FINE.NESTOR⁸ energy system model that depicts the national energy supply across all sectors and can be used to calculate cost- optimized transformation strategies. A special feature of the model is that it allows various reduction measures to compete with each other across all sectors (buildings, energy sector, industry, transport). Under the criterion of cost efficiency, the underlying model algorithm enables the selection of the most cost-efficient reduction measures, which in turn can be combined as part of a consistent, national greenhouse gas strategy.

2 Scenario definition

Based on the new Climate Change Act’s targets for the years 2030, 2040, and 2045, a target scenario (KSG2045) is defined in this study for achieving greenhouse gas neutrality by 2045. The period of time beyond this point, in which negative greenhouse gas emissions will be targeted by 2050, is not considered here. Other than these overarching greenhouse gas reduction targets, no additional energy transition goals (e.g. Climate Action Plan, Renewable Energy Sources Act goals) are analyzed. An exception to this is the legally stipulated phase-out of nuclear energy and coal power. The residual capacities outlined in the Coal Phase-out Act and the Atomic Energy Act are used here. The required contribution of the land use, land-use change, and forestry

8 National Energy System Model with Sector Coupling

9 LULUCF: Land use, land-use change, and forestry

10 Robinius et al. (2020), Wege für die Energiewende-Kosteneffiziente und klimagerechte Transformationsstrategien für das deutsche Energiesystem zum Jahr 2050. Publications of Forschungszentrum Jülich, “Energie & Umwelt” series, Volume 499

11 Gerbert et al. (2018), Climate Paths for Germany, BDI study, https://bdi.eu/publikation/news/klimapfade-fuer-deutschland/

(LULUCF)⁹ sector to emissions reductions, which is outlined in the Climate Change Act, is not incorporated into the greenhouse gas balance of the target scenario but is analyzed as a separate discussion. A cost-optimized target scenario is then calculated on the basis of these assumptions. The analyses focus on the period between 2030 and 2045. In addition, separate “what if” discussions are presented on various issues in order to draw conclusions on the robustness of the model results. Previous scenario analyses have shown that the expansion of renewable energy is a crucial linchpin for realizing a low greenhouse gas, or greenhouse gas- neutral, energy supply. Against this backdrop, this study analyzes within the context of a separate discussion whether it is possible to achieve a greenhouse gas-neutral energy supply if the required expansion rates for photovoltaics and wind power are not reached. Addi- tional discussions on the subjects of hydrogen, bioenergy, and the defossilization of the chemical industry are also conducted within the scope of sensitivity calculations.

3 Framework data and assump- tions

To conduct the scenario analyses, framework data de- scribing certain trends and the wider environment must be determined. These include aspects such as population growth, transport demand, and the demand for commercial goods like steel and cement. Experience has shown that these framework data have a significant influence on energy consumption and emissions levels.

The scenario results presented in the following sections must therefore always be viewed in the context of this given framework or environment. The framework data chosen for this study were previously used in a precur- sor study¹⁰ and are largely based on the Federation of German Industries (BDI) study Climate Paths for Ger- many¹¹. According to the data, a decline in the national population is expected, with the population set to total 79.3 million in 2040 and decline even further thereafter.

Moreover, it is assumed that the trend towards smaller households as seen in the past few years will continue.

The number of households will therefore increase significantly up until 2040/2050. This in turn means that the amount of living space per person will continue to increase alongside the overall amount of living space de- spite a declining population. The reasons for this are varied, for example greater comfort requirements or young families seeking more living space. Mobility requirements also influence the scenario, with transport demand an important driver here. The slight decline in passenger transport up until 2040/2050 reflects the the assumed decline in population. In contrast, an increase

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FRAMEWORK DATA AND ASSUMPTIONS

in freight transport is expected, which reflects the pro- jection for consistent economic growth of approx. 1.2 % per year.

As the current coronavirus pandemic has shown, such crises have a significant influence on the behavior of stakeholders and, in turn, on the level of energy consumption and emissions. However, such behavioral effects (e.g. level and permanence of reduction) are very difficult to predict. Therefore, possible behavior-related sufficiency effects that occur in response to the conse- quences of climate change, for example a cut in consumption or a potential reduction in mobility requirements, cannot be considered in this study. At the same time, it should be noted that behavioral changes can have a significant impact.

An exogenous emission pathway is used for greenhouse gas emissions in the agricultural sector. Up until 2030, this pathway follows the provisions of the Climate Change Act; the further reduction of emissions until 2050 is oriented in line with a German Federal Environ- ment Agency study¹². Consistent with the other assumptions that have been made, no reduction in livestock is expected as a result of changing eating habits.

Greenhouse gas emissions in the agricultural sector will therefore decline to roughly 48 million tonnes of CO2

equivalent by 2045 through more efficient fertilizer management and the fermentation of liquid manure in bio- gas facilities.

In 2019, greenhouse gas emissions in Germany amounted to around 810 million tonnes of CO2

equivalent. Accounting for roughly 32 % of these emissions, the energy sector was the biggest emitter followed by industry (23 %) and the transport sector (20 %).

Meanwhile, the building sector made up 15 % of emissions and the agricultural sector accounted for 8.4 %.

The greenhouse gas targets set out in the new Climate Change Act are as follows:

in comparison with 1990s levels, emissions are to be reduced by at least 65 % in 2030, 88 % in 2040, and 100

% in 2045. Greenhouse gas targets have not been set for

12 German Federal Environment Agency (2013), Treibhausgasneutrales Deutschland im Jahr 2050, Hintergrund //Oktober 2013, https://www.umweltbundesamt.de/sites/default/files/medien/376/publikationen/treibhausgasneutrales_deutschland_im_jahr_2050_langfassung.pdf

13 Budgets according to IPCC report (IPCC (2018), Special Report: Global Warming of 1.5 °C, http://www.ipcc.ch/report/sr15/), Aufteilung nach An- teilen an der Weltbevölkerung analog zum Sachverständigenrat für Umweltfragen (2020), Für eine entschlossene Umweltpolitik in Deutschland und Europa – Umweltgutachten 2020, https://www.umweltrat.de/SharedDocs/Downloads/DE/01_Umweltgutachten/2016_2020/2020_Umweltgutach- ten_Entschlossene_Umweltpolitik.html)

14 German Federal Environment Agency (2021), Treibhausgasemissionen in Deutschland.https://www.umweltbundesamt.de/daten/klima/treibhaus- gas-emissionen-in-deutschland#emissionsentwicklung

individual sectors. As a result of the new targets outlined in the current Climate Change Act, the amount of greenhouse gas emitted over a 25-year period will be reduced even further than with previous targets (Climate Change Act 2019 and Energy Concept goals) from 14,160 million tonnes to 10,100 million tonnes, a reduction of almost 29 % (see Figure 1). While the previous emissions budget corresponded to a temperature target of 2 °C (50 % likelihood), the new budget can be placed between a temperature target of 2 °C (67 % likelihood) and 1.75 °C (50 % likelihood)¹³. By comparison, to achieve a target of 1.5 °C (50 % likelihood), an overall budget of around 4,260 million tonnes must not be ex- ceeded.

The historical greenhouse gas reduction rate over the last 30 years was around 15 million tonnes of CO2

equivalent per year on average¹⁴. To achieve the previous targets, an average annual reduction rate of 25 million tonnes of CO2 equivalent would be required over a period of 30 years. The targets in the current Climate Change Act and the shortening of the time frame for action to 25 years now require a corresponding reduction rate of around 32 million tonnes of CO2 equivalent – double that of the historical rate.

Germany’s energy supply cannot be considered separately from developments in the EU. Within the EU re- gion, it is assumed that the goals of the European Green Deal will be fully implemented by the member states

Figure 1 Historical development¹⁴ of greenhouse gas emissions and reduction targets

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METHODOLOGY AND PROCEDURE

and that Europe will achieve greenhouse gas neutrality by 2050. It is also important to take the global context into account. Here it is also assumed that significant global activities will be conducted to

reduce greenhouse gas emissions, which in turn will lead to changes in global energy markets. The study therefore assumes that international trade with hydrogen and synthetic fuels will be established. Possible imports and exports of these energy carriers as well as their potential are simulated. Furthermore, it must be noted that the import of greenhouse gas-neutral raw materials (“green”

naphtha) will not be approved. As is shown in the following section, carbon capture and storage will play an important role in achieving greenhouse gas neutrality by 2045. Here it is assumed that geological storage systems will be generally available from 2040.

4 Methodology and procedure

The ETHOS¹⁵ model family developed at For- schungszentrum Jülich (IEK-3) was used for the scenario analyses (see Figure 2). It is a collection of models that can be used to depict energy systems for various system levels in high temporal and spatial resolution.

The use of models allows for a very broad range of issues to be addressed as part of the transformation pathway analysis. Particular benefits include:

- Detailed depiction of power-to-X (PtX) pathways

- Taking into account of interactions between sectors and guaranteed consistency

- High temporal and spatial resolution of energy infrastructures (electricity, gas, H2) and storage - Location-specific analysis of renewable energy

potential and electrolysis sites

- Depiction of future global energy markets (hydrogen, synthetic fuels)

- Identification of robust greenhouse gas reduction strategies

At the heart of the present analyses is the FINE.NES- TOR model¹⁶¹⁷. This is an optimization model that depicts the national energy supply – from primary energy to final energy – across all potential pathways and technologies. Its aim is to minimize the overall system costs.

16 National Energy System Model with integrated Sector coupling

17 Lopion, P. (2020), Modellgestützte Analyse kosteneffizienter CO2-Reduktionsstrategien. Publications of Forschungszentrum Jülich, “Energie &

Umwelt” series, Vol. 506, (D82 Diss. RWTH Aachen, 2020)

The most cost-efficient combination of technology and energy carrier is determined while taking into consideration externally determined framework conditions (e.g.

greenhouse gas reduction targets) and assumptions (e.g. industrial goods production, transport demand). A distinctive feature of the model is that all possible reduction options compete with each other across all sectors (energy, transport, buildings, industry). The exogenously determined, overarching greenhouse gas reduction targets, which are taken from the current Climate Change Act, are among the most important framework conditions of this study. This target path must be ad- hered to at all costs by the model. The cost-optimization calculation determines the required technologies and sector contributions to reducing greenhouse gas emissions in pursuit of this target path. This means that important forms of energy consumption (e.g. electricity consumption or hydrogen demand) are not exogenously determined and assumed – as with many other studies – but result from the cost-optimized combination of various technologies and their application. The result can be interpreted as the decision of an “all-knowing” plan- ner and represents an overarching economic perspective. The model results should not be interpreted as an expectation and are not to be considered as projections.

They should instead be viewed as scenarios in the sense of “What would happen if...”. The aim of the model calculations is to identify robust, cost-optimized pathways and trends – detached from current control and support mechanisms – that can provide a well- founded basis for decision makers from politics and industry.

Calculated using the FINE.NESTOR optimization model, the additional costs resulting from adherence to Figure 2 The ETHOS model family using the FINE framework¹⁹

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METHODOLOGY AND PROCEDURE

the greenhouse gas reduction targets must be viewed as monetary expenses that are exclusively required for a technical change of the energy system while accounting for externally determined conditions (e.g. energy carrier prices).

The FINE.Infrastructure¹⁸¹⁹ optimization model is used to design a future hydrogen infrastructure. The model enables a spatially resolved depiction of the national energy system and accounts for interactions between energy infrastructures (electricity, natural gas, hydrogen) as well as site-specific characteristics. The levels of demand (hydrogen, electricity, gas) calculated by the FINE.NESTOR model are spatially disaggregated and a cost-optimized energy infrastructure is subsequently calculated. The result is the expansion or conversion of existing infrastructures as well as potential new installations, or the determination of locations for renewable energy sites or electrolyzers. A distinctive feature of this model is that it makes it possible to conduct integrated infrastructure analyses that simultaneously account for all relevant energy carriers (electricity, gas, hydrogen, heat).

Renewable energy will be the foundation of CO2-free energy production in future and will form the backbone of the electricity supply system. It is therefore crucial to identify the renewable energy potential available on a domestic level. To identify the maximum potential of wind power and photovoltaics, the GLAES²⁰²¹ and RESkit²² models were used. These models are able to estimate potential while also accounting for various weather years and socioeconomic restrictions (e.g. ex- clusion of certain areas, distance regulations). The maximum potential identified by the models was then used as an important input parameter by the FINE.NESTOR and FINE.Infrastructure models.

Using the InfH2²³ simulation model, it is possible to calculate global energy supply structures and on this basis to calculate hydrogen and power-to-liquid (PtL) potential for possible imports to Germany. Countries that are rich in wind power (e.g. Chile, Iceland, Argentina) and solar power (e.g. Morocco, Peru, Saudi Arabia) are considered in detail here. From electricity generation and conversion to transport, the entire value chain – right up to the landing port in Germany – is modelled from both a technical and an economic perspective. The import costs for hydrogen and synthetic fuels as energy carriers are passed on to the FINE.NESTOR model in the form of a cost-potential function. The cost-optimized model is thus able to determine whether, for example, it is more cost-efficient to produce hydrogen in Germany or to import it.

18 A description of the model can be found in: Cerniauskas et al.(2021), Wissenschaftliche Begleitstudie der Wasserstoff Roadmap Nordrhein-West- falen. Publications of Forschungszentrum Jülich, “Energie & Umwelt” series, Vol. 535.

19 https://github.com/FZJ-IEK3-VSA/FINE

20 GLAES: Geospatial Land Eligibility for Energy Systems

21 Ryberg, S. (2020), Generation Lulls from the Future Potential of Wind and Solar Energy in Europe. Publications of Forschungszentrum Jülich.

“Energie & Umwelt” series, Vol. 521 (Diss. RWTH Aachen University)

22 RESkit: Renewable Energy Simulation Toolkit

23 Heuser, P. (2020), Weltweite Infrastruktur zur Wasserstoffbereitstellung auf Basis erneuerbarer Energien. Publications of Forschungszentrum Jü- lich, “Energie & Umwelt” series, Vol. 532 (Diss. RWTH Aachen)

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RESULTS

5 Results

5.1 Development of greenhouse gas emissions

To achieve greenhouse gas neutrality by 2045, an almost complete reduction of greenhouse gas emissions in all sectors is required. To this end, unavoidable emis-

sions in 2045 will have to be compensated for by negative emissions in order to achieve net greenhouse gas neutrality. One of the ways that negative emissions can be achieved is through the direct capture of CO2 from the air (direct air capture, DAC) and the subsequent permanent storage of CO2 in geological reservoirs. In addition, biomass can be used in power plants or industrial processes, with the resulting CO2 from the exhaust gas again being captured and perma-

nently stored (BECCS)²⁴.

In comparison with 1990 levels, greenhouse gas emissions will be reduced by 65 % by 2030. The analyses show that in the energy sector, the coal phase-out will have been completed by 2030, with emissions consequently declining by roughly 80 % compared with 2019 (see Fig- ure 3). In 2045, the energy, building, and transport sectors will almost have achieved greenhouse gas neutrality, while in the industrial sector emissions amounting to roughly 35 million tonnes of CO2 equivalent will remain.

The latter will be predominantly comprised of process emissions and other unavoidable emissions. In addition, roughly 48 million tonnes of CO2

equivalent of greenhouse gas emissions will remain in the agricultural sector. Other areas (e.g. waste) will

24 BECSS: Bioenergy with carbon capture and storage

account for a smaller amount of emissions (roughly 7 million tonnes of CO2 equivalent). To compensate for these remaining emissions, 90 million tonnes of CO2 will need to be permanently stored in geological reservoirs.

A more detailed description, including a discussion on compensation measures through LULUCF activities, can be found in section 5.7.

Greenhouse gas neutrality can only be achieved through permanent

geological CO2 storage.

5.2 Development of en- ergy consumption

Adherence to greenhouse gas targets means that primary energy consumption in 2045 will be roughly 39 % lower than today’s level. In addition to statis- tical effects, this development can be largely traced back to the forced savings in nearly all end-use sectors.

While the use of fossil-based energy carriers is currently responsible for a dominant 85 % share of primary energy consumption, there will be a gradual defossilization of the German energy supply up until 2045 (see Figure 4). The decline in the use of coal is partly due to the coal power phase-out but is also a result of replacement measures in other areas of industrial application (e.g.

steel production, process heat generation).

Figure 3 Greenhouse gas (GHG) emissions over time according to sector

Figure 4 Primary energy consumption in the KSG2045 scenario -100

0 100 200 300 400 500 600 700 800 900

2020 2025 2030 2035 2040 2045 GHG-Emissions in Mt CO2eq

Year

CO₂storage Agriculture Waste Transport Buildings Industry Energy sector

0%

20%

40%

60%

80%

100%

0 1000 2000 3000

2020 2025 2030 2035 2040 2045

Share of impot

Primary energy consumption in TWh

Year

Hard coal Lignite Nuclear energy

Mineral oil Natural gas Hydro power Biomass Wind (Onshore) Wind (Offshore) Photovoltaics Others Electricity Import

PtL-Import H2-Import Import rate

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RESULTS

While the use of crude oil and natural gas will decline up until 2030, both these energy carriers will continue to dominate primary energy consumption at that point. Af-

ter 2030, there will be a dramatic reduction in crude oil and natural gas consumption until greenhouse gas neutrality is ultimately achieved in 2045. The use of natural gas in the building sector, for instance, will be almost two thirds lower in 2035 than the current consumption level. This means that the majority of today’s natural gas-fired heating systems will have to be converted or replaced over the next 15 years. A similar development can be seen in the industrial sector, where up until 2035 almost three quarters of current natural gas consumption will have to be replaced by greenhouse gas-neutral energy carriers. In the transport sector, the use of con- ventional gasoline and diesel will decline to almost one third of the current consumption level by 2040. In 2045, greenhouse gas-neutral energy carriers will make up a large proportion of overall primary energy consumption.

These energy carriers will be dominated by the use of bioenergy, wind power, and photovoltaics.

The analyses show that the German energy supply will continue to rely on energy imports in future. However, the import rate will decline from over 74 %²⁵ currently to roughly 22 % by 2045, with a much reduced level of primary energy consumption. The main energy carriers being imported will be hydrogen and synthetic fuels, which will account for around 80 % of overall imports in 2045.

A greenhouse gas-neutral energy supply will lead to a strong decline in energy imports.

As the development of final energy consumption high- lights, energy-saving measures will need to be implemented in all sectors (see Figure 5) to achieve greenhouse gas neutrality by 2045. Overall, final energy consumption will be reduced by around 30 % compared

25 Arbeitsgemeinschaft Energiebilanzen (AGEB): Bilanz 2019, https://ag-energiebilanzen.de/7-0-Bilanzen-1990-2016.htmlx

26 Balance without ambient heat

with today’s level. It must be noted here that an increase in energy consumption-related demand (e.g. transport services, living space) is assumed across all sectors.

This means that the additional energy consumption to be expected from this will be significantly overcompen- sated for by energy-saving measures that are implemented in the transport, household, and building sectors. In comparison with today’s level, energy consumption in the building sector, for instance, will decline by almost 60 % by 2045²⁶. This will be due to activities ranging from building refurbishment measures to highly efficient electricity applications and the use of heat pumps. Similar energy savings will be made in the transport sector, where energy consumption will decline by around 58 %. This will be largely due to the use of electric vehicles (electric batteries and fuel cells), which are much more efficient than today’s combustion engine concepts. As a result of the anticipated 1.2 % annual growth in the economy and the corresponding increase in both gross value added and the production of goods, energy consumption in the industrial sector will increase by almost one third by 2045 compared with today’s level. This will be due to the higher energy demand for methanol production and the increased process heat requirements of DAC systems. Within industry, a wide range of energy-saving measures will also be taken, although they will be unable to compensate for the additional consumption resulting from demand- and struc- ture-related issues.

Energy-efficiency measures are an important aspect of achieving greenhouse gas neutrality across all

sectors.

5.3 Costs

To achieve the goal of greenhouse gas neutrality by 2045, considerable costs will be accumulated across the entire duration of the transformation period. How- ever, it should be noted that investments would have been made and operating costs accrued in many areas irrespective of this ambitious goal. The costs of the greenhouse gas-neutral scenario are therefore con- trasted with a fictitious business-as-usual development, which assumes a much more moderate 60 % reduction in greenhouse gas emissions by 2045 (see Figure 6).

The additional costs compared with the business-as- usual development are considered to be the actual costs involved with achieving greenhouse gas neutrality. The emissions targets, which become increasingly stringent over time, result in a strong increase in additional costs, particularly over the last 15 years of the scenario. Compared to the business-as-usual scenario, the reduction measures lead to savings in energy and, Figure 5 Final energy consumption by sector in

the KSG2045 scenario 0

500 1000 1500 2000 2500 3000

2020 2025 2030 2035 2040 2045 Final energy consumption in TWh

Year

Industry (energetic) Industry (n-energetic)

Buildings Commercial

Transport

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RESULTS

in turn, costs. These savings must be offset from the additional investments. The annual net additional costs amount to roughly € 139 billion in 2045. The conversion sector (e.g. expansion of renewables, electrolyzers, etc.) accounts for the largest proportion of additional investments. Around 37 % of the total additional investments can be attributed to the conversion sector alone.

Meanwhile, the transport sector and the building sector account for 16 % and 13 % of the additional investments, respectively. The expansion of energy infrastructures and storage systems is responsible for roughly 19 % of additional investments.

Greenhouse gas neutrality by 2045 is economically vi- able, but much higher levels of investment are re-

quired in the energy sector.

Since the period of transformation until greenhouse gas neutrality is achieved amounts to around 25 years, the system costs that are accumulated over this period of time are of relevance. The cumulative and discounted

system costs, which are to be interpreted as strategic costs throughout the transformation process, amount to roughly

€ 1.0 trillion over the entire period. If these costs are taken in relation to cumulative GDP, they amount on average to roughly 1.2 % of transformation costs (see Table 5.1).

In total, average CO2 reduction costs resulting from the transformation strategy will amount to approx. € 132/tCO2-eq over the course of the entire period.

It should be noted that the costs presented in this section are monetary expenses that are required for the transformation of the energy supply system. Economic effects such as expected value added or possible employment effects are not taken into consideration. This would require national accounting calculations on a macroeconomic level, which were not performed as part of this analysis.

5.4 Electricity consumption, capacity

The replacement of fossil energy carriers until 2045 will lead to a significant increase in electricity consumption to roughly 1,216 TWh, more than double that of today’s level. The additional electricity requirements of PtX applications will be a key driver of this development. The use of electrolyzers to produce hydrogen will account for one quarter of overall electricity consumption.

In total, around 208 TWh will be required for the operation of heat pumps and industrial power-to-heat (PtH) applications. This represents a roughly 17 % share of overall electricity consumption. While electricity consumption in the transport sector currently remains at a very low level (around 11 TWh), it will increase to roughly 73 TWh due to the increasing use of battery electric vehicles. The operation of DAC systems, which will be needed to compensate for residual emissions in 2045, also requires a significant amount of electricity (approx. 74 TWh).

The increasing use of power-to-X measures will re- sult in a strong increase in electricity consumption.

Figure 6 Change in costs compared with a business-as-usual scenario

Table 5.1 Costs of greenhouse gas neutrality by 2045

KSG 2045 Comparison Net additional costs

in 2045 € 139 billion

€/a

Business-as- usual sce-

nario Cumulative addi-

tional costs (2020–2045)

€ 1,104 billion

nario Proportion of cu-

mulative GDP 1.2 % Average abatement

costs € 132/tCO2-

eq

nario -100

-50 0 50 100 150 200

2030 2040 2045

Difference of annual system costs in bn €/a

Year

Import conven.

energy carriers Import

Renewables Storage and infructures Conversion Industry Buildings Transport

Total system costs

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RESULTS

The analyses show that the use of applications that are more efficient in terms of electricity consumption is a cost-effective measure. Under the constraint of cost optimization, the potential for efficiency will be fully ex-

hausted right at the beginning of the transformation period. As the carbon footprint will still be high at the beginning of the transformation phase due to the use of fossil energy carriers for electricity generation, electricity-saving measures will be particularly important during this period. In particular, there is a great deal of potential for savings in the household sector and the industry/commerce, trade, and services sector, which could lead to reductions in electricity consumption of 53 % and 21 %, respectively. If this potential is not exploited, electricity consumption in 2030 will be much higher (approx. 650 TWh). The increasing electrification of industrial processes until 2045 will lead to a level of electricity consumption in industry (346 TWh) that is more than 50 % higher than today’s level (see Figure 7).

Exploiting the potential to reduce electricity consumption is cost-effi- cient and will lead to lower capacity

requirements.

It is assumed that European countries outside Germany will make sim- ilarly great efforts to drastically reduce greenhouse gas emissions. The model-based analyses show that Germany will become a net importer of electricity (approx. 10 TWh) in 2045.

A forced expansion of renewable energy is a funda- mental prerequisite for a successful energy transition.

A significant expansion of power plant capacity will be required to cope with the increase in electricity consumption. Installed capacity will gradually increase throughout the entire transformation period before reaching a total of 844 GW in 2045. This represents a nearly fourfold increase compared with today’s level of installed production capacity (see Figure 8). The ex- piring capacities of coal power plants correspond with the provisions of the Coal Phase-out Act. Wind power and photovoltaics will in future form the backbone of the German electricity supply. To this end, a massive expansion of wind turbines and photovoltaic (PV) systems is required. The installed capacity of PV systems will thus amount to roughly 450 GW in 2045, 45 % of which will be rooftop installations and 55 % of which will be installed in open fields. The photovoltaic potential analyses show that the potential for installations in open fields will be fully exploited, while roughly 44 % of the potential for rooftop installations will be exhausted. To achieve these photovoltaic capacities by 2045, an average expansion rate of approx. 15.8 GW per year will be necessary for the entire period under consideration. This would correspond to a more than fourfold increase of the average expansion rate of the last 10 years.

Figure 7 Electricity consumption (excluding exports) in the KSG2045 scenario

Figure 8 Development of installed capacity (excluding storage systems) until 2045 0

200 400 600 800 1000 1200 1400

2020 2025 2030 2035 2040 2045

Electricity consumption in TWh

Year

DAC

Heatpump & PtH Electrolysis Transport Industry Commercial Residential

0 100 200 300 400 500 600 700 800 900

2020 2025 2030 2035 2040 2045

Installed capacity in GW

Year

Hydrogen Biomass Hydro power Wind (offshore) Wind (onshore) PV (open field) PV (rooftop) Gases

Nuclear energy Hard coal Lignite Other

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There is sufficient potential for a fourfold increase of today’s wind power capacity.

Onshore wind power capacity will amount to roughly 213 GW in 2045, a fourfold increase compared with today’s installed capacity. Average expansion rates of around 6.3 GW per year will be required to achieve this level. The in-depth potential analyses show that the required potential is available (see Figure 9). If uniform distance regulations of 1000 m (distance to residential buildings within an urban sides) and 618 m (distance to residential buildings outside urban sides) are taken as standardized regulations for all federal states and also include forest areas, this results in an overall potential of roughly 364 GW, only 59 % of which would have to be exhausted. To achieve the required onshore wind power capacity of 213 GW, an

area corresponding to around 2.8 % of the total area of Ger- many would be required. Even if the use of forest areas is cat- egorically excluded, the remaining onshore wind energy potential (240 GW) would the- oretically still be sufficient to establish the required production capacity.

Offshore wind turbines will also play an important role in future.

Their installed capacity will increase to approx. 72 GW in 2045. To achieve this, average annual expansion rates of roughly 2.6 GW will be required. Towards the end of the transformation phase, gas-

fired power plants that use biomethane and hydrogen will play an important role.

The installed capacity in total of these plants amounts to 86 GW in 2045, which corresponds to a roughly 10 % proportion of overall capacity.

The cost-efficient electricity-saving potential, which at the start of the transformation phase will result in a decline in electricity consumption, will initially lead to a decrease in gross electricity generation. Due to the ensuing strong increase in electricity consumption, electricity generation will subsequently also increase considerably. Renewable energy will already account for a roughly 63 % share of gross electricity generation in 2025, increasing to over 90 % as early as 2030 (see Figure 10). In 2045, electricity will be exclusively generated by CO2-free energy carriers.

Almost entirely CO2-free electricity generation will be required as early as 2035.

Around 55 % of electricity produced in 2045 will origi- nate from wind farms. Offshore wind turbines will account for 25 % of this electricity and onshore wind turbines 30 %. PV systems will represent a roughly 37 % share of energy generation. The reconversion of hydrogen will amount to approx. 14 TWh and will be largely required during seasonal fluctuations when the level of Figure 9 Onshore wind power potential as a function of distance regulations

Figure 10 Gross electricity generation in the KSG2045 scenario 63%

91%

30%

40%

50%

60%

70%

80%

90%

100%

0 200 400 600 800 1.000 1.200 1.400

2020 2025 2030 2035 2040 2045

Proportion of renewable energy

Electricity generation in TWh

Year

Wind (offshore) Wind (onshore) PV (open field) PV (rooftop) Biomass Hydro power Hydrogen Gases

Nuclear energy Coal

Other RE-Share

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RESULTS

solar and wind power generation is very low (dun- kelflaute). This is reflected in its low utilization level of around 450 full-load hours in 2045. The analyses also show that from a cost-optimized overall system perspective, it will be possible to phase out coal power by 2030.

5.4.1 Excursus: Expansion limits of renewables In the reference case, more than 730 GW of electricity generation capacity will be required from PV systems and wind turbines by 2045. By comparison, total capacity of only around 117 GW (55 GW from onshore wind, 8 GW from offshore wind, and 54 GW from PV systems) was installed in 2020. To reach the level of capacity required in 2045, annual expansion rates will need to go well beyond the maximum expansion rates of the last 10 years (see Table 5.2).

Table 5.2 Comparison of historical expansion rates of re- newable electricity generation capacity and those required for the KSG45 scenario

in GW/a

Maximum expansion rates from the last 10 years²⁷

Required expansion rates for KSG2045 scenario

PV 9.0 15.8

Onshore wind 4.9 6.3

Offshore wind 2.3 2.6

As these extreme expansion rates could result in acceptance problems, the maximum historical expansion rates for renewable electricity generation will be set as an upper limit for future expansion within the framework of this discussion.

By limiting the future expansion rates, renewable electricity generation will lack around 250 GW of capacity in 2045 (see Figure 11). This mainly impacts on the future

27 BMWi renewable energy information portal. The Working Group on Renewable Energy Statistics: https://www.erneuerbare-energien.de

hydrogen supply. In total, hydrogen demand increases by approx. 120 TWh, with the H2 import rate thus increasing from 47 % to 78 %. The limitation of future expansion rates leads to annual additional costs of

€ 13 billion in 2045, an increase of roughly 9.3 %.

Without a forced expansion of renewable electricity generation, additional costs will accrue and there will

be an increased dependence on hydrogen imports.

5.5 Hydrogen consumption and sup- ply

The use of hydrogen will play a crucial role in achieving both a successful energy transition and greenhouse gas neutrality. The analyses show that around 104 TWh (approx. 3.1 million tonnes) of hydrogen will be required as early as 2030 (see Figure 12). This will increase to roughly 412 TWh (approx. 12 million tonnes) by 2045.

The industrial sector will be the biggest consumer (approx. 267 TWh) and is analyzed separately in section 5.9. At roughly 117 TWh (approx. 3.5 million tonnes), the transport sector also has a high hydrogen demand. This is dominated by commercial vehicle transport (approx. 63 %), while the remaining demand is divided among passenger cars, buses, trains, and vans. Hydrogen will also be used in the energy sector for reconversion in gas turbines to maintain a secure electricity supply.

In 2030, around 29 TWh of hydrogen will be produced domestically by electrolyzers, for which approx. 15 GW of installed electrolysis capacity will be required. The re- mainder of domestic hydrogen will come from steam re- formers and hydrogen that is generated as a by-product

of chlorine production (see Figure 13).

The amount of domestic hydrogen produced by electrolyzers will increase to roughly 213 TWh (approx. 6.4 million tonnes) by 2045; at the same time, installed electrolysis capacity will increase to around 71 GW. Imports will make up a 47 % share (196 TWh) of the overall hydrogen supply in 2045, of which 150 TWh (approx.

4.5 million tonnes) will be imported via pipelines from Southern Europe and North Africa. Furthermore, hydrogen will be produced Figure 11 Electricity generation capacity (left) and hydrogen resources (right) as referenced in the

discussion (on maximum historical expansion rates) in 2045 and the changes required for the KSG2045 scenario

-400 -200 0 200 400 600

Maximum hist.

expansion rate

Change to KSG2045

Electricity generation capacity in GW

Biomethane PV (roof top) PV (open field) Wind (Onshore) Wind (Offshore) Hydro

Biomass Hydrogen

Waste

-200 0 200 400 600

Maximum hist.

expansion rate

Change to KSG2045

Hydrogen production and import in TWh

Chlorine production Eletrolysis

Green H2 import (pipeline) Green H2 import (ship)

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RESULTS

in the UK, Ireland, and Norway, liquefied, and then imported to Germany in liquid gas tankers.

Hydrogen is an important component of the energy transition.

A pipeline infrastructure will be required for the transport of hydrogen imports and domestically produced hydrogen. As shown in Figure 14, this will connect the elec- trolyzer sites and import capacities with centres of consumption. To this end, around 13,000 km of the existing natural gas network will have to be

converted into hydrogen pipelines. Roughly 1,000 km of new pipelines will also have to be built.

The largest transport capacities will link the import terminals and electrolysis sites at the North Sea with large industrial centres in North Rhine-Westphalia. At the same time, imports from Spain and Algeria will be fed into the hydrogen network and distributed via pipelines at cross-border points in Saarland and Baden- Wuerttemberg.

5.5.1 Excursus: Hydrogen import costs

In this section, due to the important role of hydrogen in the analyses, the costs of importing hydrogen to Germany are varied and analyzed in terms of their impact on the energy system. For the KSG2045 scenario, the esti- mated costs of importing hydrogen by ship (€ 3.22/kg H2) in 2045 are the result of the InfH2 simulation model. At € 2.31/kg, importing hydrogen via pipeline is much less

expensive. Within the scope of the following discussion, the import costs for all types of imports are set at a uniform cost of € 2.22/kg, which represents an optimistic scenario.

In contrast, an increase in the import costs to € 4.22/kg H2 is a pessimistic scenario to account for the eventual- ity that the European hydrogen economy does not take off in good time. The key findings of this discussion are listed in Table 5.3. Low H2 import costs lead to an increase in imports as well as an increase in hydrogen demand to around 603 TWh in total. This increase is pri- marily due to the use of hydrogen to generate process Figure 12 Hydrogen demand according to sector Figure 13 Hydrogen generation and resources

Figure 14 Optimized hydrogen pipeline infrastructure in 2045 0

100 200 300 400 500

2030 2035 2040 2045

Hydrogen demand in TWh

Year

Energy Buildings Industry Transport

0%

20%

40%

60%

80%

100%

0 100 200 300 400 500

2030 2035 2040 2045

Share of import

Hydrogen production in TWh

Year

Import (ship) Import (Pipeline) Electrolysis Others

Share of import

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RESULTS

heat in the industrial sector as well as to the increased reconversion of hydrogen to produce electricity (see Figure 15).By contrast, high import costs lead to only a slight reduction in hydrogen demand to 379 TWh. Hy- drogen demand in the industrial and transport sectors remains constant, although there is no reconversion of

hydrogen. At times when the level of solar and wind power generation is very low (see section 5.6), this can be offset by the use of biomethane in gas turbines or biomass in other flexible power plants.

The extent of H2 import costs has a significant influ- ence on the expansion of renewable energy and do-

mestic electrolysis capacity.

Alongside the increase in hydrogen demand at low import costs, the import rate also increases to 84 % due to the cost advantages compared with domestic production (see Figure 16). By comparison, this import rate is around 47 % in the KSG2045 scenario. The additionally required hydrogen will be covered within Europe by ship imports from Iceland, the UK, Ireland, and Norway, as no increase in imports via pipelines was assumed.

In addition, as a result of the much lower domestic H2

production, electricity consumption will decline by

around 212 TWh, which in turn will significantly reduce the required installation of PV systems and wind turbines. In contrast, higher import costs lead to a complete abandonment of H2 imports, since domestic production via electrolyzers is more cost-effective in this case. To meet the additional electricity consumption requirement (241 TWh), 152 GW of additional PV and wind power capacity will have to be installed. This would lead to a significant increase in annual expansion rates compared with the KSG2045 scenario.

5.6 Dunkelflaute and storage require- ments

To achieve an energy system design with a secure supply, a cold dunkelflaute (literally “dark doldrums”, refer- ring to a period when the level of solar and wind power generation is very low) is considered in the analysis. A two-week period in January is assumed in which only 10 % of wind power and PV capacity is available due to extreme weather conditions, while heating requirements are increased by 25 %. The analyses show that controllable power plants will be predominantly used to bridge the gap during the dunkelflaute periods. These Table 5.3 Excursus overview: Variation of hydrogen import costs

2045 Low import costs KSG2045 High import costs

H2 import costs € 2.22/kg € 3.22/kg € 4.22/kg

H2 demand 603 TWh 412 TWh 379 TWh

Domestic electrolysis capacity 37 GWH2 71 GWH2 111 GWH2

H2 import rate 84 % 47 % 0 %

Electricity consumption 1004 TWh 1216 TWh 1457 TWh

Installed capacity of wind energy and solar

power 576 GW 734 GW 886 GW

Net additional costs compared with KSG2045 in

% - 7.2 % 0 + 1.1 %

Figure 15 Hydrogen demand in 2045

Figure 16 Hydrogen generation in 2045 0

100 200 300 400 500 600 700

Low import costs

KSG2045 High import costs

Hydrogen demand in TWh

Energy sector Buildings Industry Transport

0%

20%

40%

60%

80%

100%

0 200 400 600 800

Low import

costs

KSG2045 High import

costs

Share of import

Hydrogen production in TWh

Import (ship) Import (pipeline) Elektrolyse (zentral) Others

Share of import

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RESULTS

power plants will be operated with biomass, biomethane, or hydrogen. The additionally required hydrogen will be taken from the hydrogen storage systems for reconversion, meaning that the storage fill level will decline significantly during the dunkelflaute (see Figure 17). At the same time, a large proportion of hydrogen demand in the industrial and transport sectors will also be covered by the storage systems, since electrolyzers will not be in operation during the dunkelflaute.

In total, approx. 35.4 TWh of underground hydrogen storage capacity will be required in 2045 to overcome the dunkelflaute and compensate for the seasonal fluctuations in available solar and wind energy. This capacity can be almost entirely covered by the conversion of existing natural gas storage caverns. The calculations are based on the weather year 2013. If the calculations are based on the continuous development of weather years over the last 37 years, however, this results in a much higher storage requirement that is roughly twice as high. In addition, approx. 562 GWh of short- and me- dium-term capacity will be required in 2045 to offset daily and weekly fluctuations in electricity generation from wind and solar power. This storage capacity will be comprised of approx. 60 GWh pumped-storage power plants, approx. 285 GWh compressed air storage, and approx. 208 GWh battery storage.

Long-term storage capacities will need to be expanded to compensate for dunkelflaute periods with low elec-

tricity generation from wind and solar power.

5.7 Negative emissions

In 2045, 90 million tonnes of CO2 equivalent of almost unavoidable greenhouse gas emissions will remain,

28 German Federal Environment Agency (2013), Treibhausgasneutrales Deutschland im Jahr 2050, Hintergrund //Oktober 2013, https://www.umweltbundesamt.de/sites/default/files/medien/376/publikationen/treibhausgasneutrales_deutschland_im_jahr_2050_langfassung.pdf

predominantly originating from industry and agriculture.

The exogenously determined emission pathway, which is oriented in line with the German Federal Environment Agency (UBA)²⁸ study, reveals around 48 million tonnes of CO2 equivalent of remaining emissions in the agricultural sector, with no reduction in livestock. In addition, roughly 35 million tonnes of CO2 equivalent will remain in the industrial sector, 85 % of which will be composed of process emissions. A proportion of these emissions can be reduced through carbon capture (particularly in the cement industry), resulting in residual emissions of 77 million tonnes of CO2 equivalent, which must be compensated for by an equal amount of negative emissions (see Figure 18).

For a negative CO2 balance, the use of biomass in power plants and industrial facilities could help to capture around 20 million tonnes of CO2 from exhaust gases, which would then be permanently stored in geological reservoirs (BECCS). However, the largest proportion of negative emissions (approx. 57 million tonnes of CO2) will be offset by the direct capture of CO2 from the air (DAC) and its subsequent permanent storage. In addition, approx. 25 million tonnes of CO2 will be required in the chemical industry as a raw material for methanol production, which will also be captured by DAC systems. Considering the importance of these DAC systems in achieving greenhouse gas neutrality, it is critical that they are up and running on the market in good time. At present, the technology is only being used by selected pilot projects worldwide. The permanent storage of CO2 in suitable geological reservoirs will also play a key role, since a total of up to 90 million tonnes of CO2 will have to be stored by 2045.

Figure 17 Electricity generation and hydrogen storage fill level in 2045

0 5 10 15 20 25 30 35 40

0 50 100 150 200 250

1-Jan 3-Feb 8-Mar 10-Apr 13-May 15-Jun 18-Jul 20-Aug 22-Sep 25-Oct 27-Nov 30-Dec H2-storage level in TWh Average hourly electricity generation per day in GWh

Wind+PV Controllable power plants Reservoir level hydrogen

NEW TARGETS USING OLD PATHWAYS?

Strategies for a greenhouse gas neutral energy supply by 2045