Recurring geopolitical tensions and energy import limitations have raised energy prices across the European Union (EU), exposing a gap in energy supplies and vulnerabilities in energy security. With energy prices showing no signs of returning to pre-2020 levels, a critical re-evaluation of the EU's energy transition strategies is imperative.
An interdisciplinary and international research team led by scientists at the Max Planck Institute for Chemistry (MPIC) used integrated assessment models to evaluate how different responses to rising and volatile fossil fuel prices may affect the energy structure, economic development, air quality, climate and health.
"Integrated assessment helps explain why and how renewable expansion can be valuable beyond closing an energy supply gap," says Dr. Wenjun Meng, first author of the study and project leader in the Aerosol Chemistry Department at the MPIC. "Taking a holistic approach, we combined WILIAM, a newly developed system dynamics model, with the well-established model of greenhouse gas and air pollution interactions GAINS, to evaluate the overall societal and economic impact of different short-term measures and long-term strategies."
Renewables can close energy supply gaps and deliver wider benefits
The new study builds on an energy pathway that was developed by the International Institute for Applied Systems Analysis (IIASA) and reflects current legislation. The results show that long-term strategies incorporating faster large-scale expansion of renewable energies can effectively close the energy supply gap while also providing climate change mitigation benefits and improving public health. This creates substantial societal and economic benefits that outweigh the costs of renewable energy expansion.
The European Climate Law introduced in 2021 aims at climate neutrality by 2050. Due to increased energy price levels, phasing out fossil fuels more quickly and achieving the targets originally set for 2050 earlier was found to bring greater benefits than previously anticipated. For example, accelerating the renewable energy expansion to reach net-zero emissions 10 years earlier is projected to yield EU-wide net benefits in the range of approximately 100 to 600 billion Euros across the investigated scenarios reflecting the fuel price levels observed during the years 2021–2023. These benefits include reduced fossil fuel costs, avoided social costs of CO2 (climate benefits), monetized public health benefits from improved air quality, and reduced spending on emission control measures. Together, they outweigh the costs related to power plants, infrastructure, and end-use equipment.
Dynamic electricity costs make the assessment more realistic
The integrated assessment takes into account that reaching 2050 energy targets earlier would require a rapid expansion of renewable power generation, increasing the need for flexibility, storage, grid management, and measures to reduce curtailment. These system constraints can influence the levelized cost of electricity (LCOE), i.e., the average cost of generating electricity over the lifetime of an energy system.
"Renewable energy offers substantial long-term benefits, but the transition must still be carefully planned. Considering dynamic changes in electricity costs is an important step towards more realistic projections for rapid renewable energy expansion and supports the development of efficient and sustainable strategies to address the grand challenges of the renewable energy transition and global change," says Prof. Yafang Cheng, Director of the Aerosol Chemistry Department at the MPIC and corresponding author of the study. "Our results demonstrate that cleaner energy pathways become more attractive in energy system planning and decision-making when prices and policy instruments more fully reflect the climate, health, and economic costs associated with fossil fuels."
Interdisciplinary perspectives and global relevance
Although the investigations were focused on the EU, the findings are also relevant for other regions facing fossil fuel price increases and volatility, energy import dependence and climate policy pressure. Particularly for emerging economies where energy systems are expanding, today's choices may have long-lasting implications for the development of cleaner or more fossil-fuel-dependent pathways. As many regions around the world seek to strengthen energy security while accelerating cleaner energy transitions, the study highlights that it is possible to simultaneously address energy security, air quality, public health, and climate goals while generating broader societal and economic benefits.
"Overall, the study underlines that the societal and economic effects of energy security, climate change, and public health should be evaluated together, and that clean air merits consideration as a sustainable development goal," adds Prof. Ulrich Pöschl, co-author and Director of the Multiphase Chemistry Department at the MPIC.
The investigations were carried out by an interdisciplinary team comprising researchers from the Max Planck Institute for Chemistry (Germany), University of Valladolid (Spain), University of Groningen (Netherlands), the International Institute for Applied Systems Analysis (Austria), University College London (UK), the Chinese Academy of Sciences, Peking University and Tsinghua University (China).
They build on the PANTHEON research project funded by the European Commission Horizon program and the Chinese Ministry of Science and Technology within the EU-China Flagship Program for Climate Change and Biodiversity (CCB Flagship). PANTHEON aims to develop an integrated assessment modelling framework and decarbonization roadmaps to help the EU and China achieve carbon neutrality while considering socio-economic and environmental impacts.
"Climate research increasingly depends on interdisciplinary collaboration to address the complex links between energy, environment, health, and society. This study highlights how integrating expertise from multiple disciplines and countries enables more realistic and policy-relevant pathways toward carbon neutrality and sustainable development," adds Prof. Klaus Hubacek, director of the Energy and Sustainability Research Institute at the University of Groningen, co-author and principal investigator of the PANTHEON project.
Latest developments and future perspectives of integrated assessment modeling have been outlined at a related recent international conference on the "Future of Integrated Assessment Models: Pathways Towards Carbon Neutrality for Climate, Environment, Health and Socio-economic Co-benefits" convened by Prof. Yafang Cheng and Prof. Klaus Hubacek in collaboration with the Wilhelm and Else Heraeus Foundation and the German Physical Society (DPG).
Original Publication
Wenjun Meng, Jaime Nieto, Dabo Guan, Jing Meng, Robert Sander, Ulrich Pöschl, Klaus Hubacek, Hang Su, Shu Tao, Yafang Cheng, Rethinking Energy Transition Strategies for the European Union amid Rising Energy Prices, pnas.2609606123.
Supplementary links
PANTHEON project "Pathways to(wards) carbon neutrality for climate, environment, health and socio-economic co-benefits": https://pantheon-decarbonisation.com/
EU-China Flagship Program for Climate Change and Biodiversity (CCB Flagship): https://ec.europa.eu/info/funding-tenders/opportunities/portal/screen/opportunities/topic-details/horizon-cl5-2023-d1-02-01
WE-Heraeus-Seminar "Future of Integrated Assessment Models: Pathways Towards Carbon Neutrality for Climate, Environment, Health and Socio-economic Co-benefits": https://pantheon-decarbonisation.com/the-future-of-integrated-assessment-models-why-carbon-neutral-pathways-need-humans-in-the-loop/
WILIAM model: https://github.com/LOCOMOTION-h2020/WILIAM_model_VENSIM
WILIAM — the Within Limits Integrated Assessment Model — is a system dynamics integrated assessment model developed within the University of Valladolid-coordinated LOCOMOTION project to assess long-term transition pathways by linking demography, society, economy, finance, energy, materials, land and water, and climate. WILIAM v1.3 is applied in this study.
GAINS model: https://gains.iiasa.ac.at/models/gains_models4.html
GAINS — the Greenhouse Gas and Air Pollution Interactions and Synergies model — is an integrated assessment model developed at the International Institute for Applied Systems Analysis (IIASA) to evaluate links between air pollution and climate policy, including emissions, mitigation costs, and health and ecosystem impacts. GAINS for Europe (v4.02) is applied in this study.
