Bidirectional soft-linking of a Capacity Expansion Model with a Production Cost Model to evaluate the feasibility of transition pathways towards carbon neutrality in the power sector

Abstract

Energy models have been a valuable tool in support of well-informed decision-making towards the transition to climate neutrality in the European Union. However, considering the extra levels of detail required when designing a system based on intermittent renewables, modelling approaches in the field often lack the necessary time resolution, or are not open source, raising concerns of transparency and scientific reproducibility. This article addresses this gap by introducing a novel bidirectional soft-linking approach between two open-source energy models to generate long-term scenarios in the power sector and evaluate their feasibility, allowing for the optimisation of investments over a 30-year period and the sector's hourly operation at different snapshots. To demonstrate the applicability of this modelling approach, the Greek power sector is used as a testing ground in order to study the capacity and flexibility requirements of different transition pathways by 2050. Simulation outcomes show that a more ambitious variable renewable energy and storage capacity expansion than the one projected by the National Energy and Climate Plan is required to achieve the targets of 2050, while also highlighting a path dependency on gas at least until 2033. The latter could either result in a lock-in effect or to stranded assets if the decision to phase out gas is not taken rapidly. On the other hand, there is the potential to achieve carbon neutrality by 2035, if significant investments take place in time. Finally, switching from natural gas to hydrogen could be an effective solution for new gas power plants to avoid becoming stranded assets.