3<\/sup><\/p>\nThe European Green Deal and Czech climate neutrality assessment is one of the main outputs of the RegSim project.<\/p>\n
We apply energy optimisation model TIMES-CZ 4,5<\/sup> to analyse impacts of the extension of the EU ETS to buildings and road transport (EU ETS 2) and of a coal phase-out on the Czech energy system. We also assess the capability of Czechia to reach climate neutrality by 2050 without imports of biomass or hydrogen. We find that Czechia should be able to achieve 55% reduction in total GHG emissions in 2030, mainly due to GHG emission reductions in the EU ETS sectors. The effort needed to reach this target is lowered by the high GHG emissions level the base year 1990. Energy efficiency and renewable energy targets for 2030 are more difficult to achieve. Further decarbonisation is quite challenging and climate neutrality in 2050 cannot be reached without additional measures or higher imports of renewable energy.<\/p>\nNational Energy and Climate Plan<\/h3>\n The baseline scenario, called NECP, follows the National Energy and Climate Plan.6<\/sup> Scenario REF follows the European Commission\u2019s REF2020 scenario.7<\/sup> Two policy scenarios (CPRICE and REG) include the EU ETS extended to buildings and transport sectors (EU ETS 2) and coal phase-out. While the REG scenario also aims to approach climate neutrality by 2050 conditional on these policies, NECP_zero scenario is searching for the optimal path to reach climate neutrality by 2050.<\/p>\nIn all scenarios, demands for energy services and energy-intensive products are derived from the National Energy and Climate Plan.6<\/sup> We conservatively assume Czechia is self-sufficient in all renewables and hydrogen production. The Dukovany nuclear power plant is decommissioned between 2036-37 in all scenarios. Scenarios NECP, NECP_zero and REG assume simple replacement of the Dukovany nuclear power plant with a new nuclear power source keeping the electricity production from nuclear constant. Installation of new nuclear sources is the result of cost optimisation in the TIMES-CZ model in the CPRICE scenario. The REF scenario is derived from the European Commission\u2019s REF2020 scenario (EC REF2020), including nuclear power generation and net electricity imports.<\/p>\nFig. 1: Czech emissions of GHG by sector (without LULUCF)<\/figcaption><\/figure>\nA 55% reduction in total GHG emissions by 2030 is realistic for the small open economy, such as that of Czechia, mainly due to emission reductions in the EU ETS sectors. However, the pace of GHG emission reductions in the ESR sectors is slow in all scenarios, which is also due to the increasing demand for energy services. In 2030, GHG emissions in the ESR sectors are reduced by 15 (REG) to 22% (NECP and NECP_zero) compared to 2005.<\/p>\n
In contrast, carbon neutrality is not achieved in any scenario by 2050, and 16 Mt CO2ek<\/sub>\u00a0remains in the NECP_zero and REG scenarios even after accounting for emission sinks from land use, land use change and forestry (LULUCF), and carbon capture. There are several reasons for this, mainly related to modelling assumptions. First, all scenarios assume national self-sufficiency in renewables, hydrogen production and electricity generation; and the modelling results clearly show how limiting these assumptions are, especially for the decarbonisation of industry. Second, two sectors with non-negligible GHG emissions, agriculture and waste, are not directly modelled and the emission trajectories used for them are not in line with ambitious climate policies that will aim for a deeper uptake of circularity principles and waste hierarchy, progressive uptake of GHG mitigation practices in livestock and farming practices, as well as profound dietary changes in the population. Third, the assumed maximum potentials of solar and wind are rather conservative and can be overcome with the deployment of more advanced technologies and better co-ordination. Fourthly, the assumptions about the costs of emissions allowances and fossil fuels were made before the Russian aggression against Ukraine. All that followed, including full or partial embargoes on imports of coal, oil, and gas from Russia and a major shift to LNG imports, is likely to have a lasting impact on energy prices, energy policies, and consequently, entire energy systems.<\/p>\nFinancial implications of decarbonisation<\/h3>\n We also show that the costs of decarbonisation will be substantial, but there will be, which we have (partly) estimated, and vast benefits from climate change mitigation that are not included\u00a0 in the analysis. Savings and energy efficiency improvements are crucial to meeting emissions targets and, among other measures, the extension of the ETS to buildings and road transport is particularly relevant. The scale of the investment required is not only obscured by the fact that the bulk of the investment is in the renewal of the road vehicle fleet, which is largely routine. The other single investment item is the new nuclear power plant with estimate overnight costs of \u20ac13-20bn depending on installed capacity. This represents about one third of all investment in the electricity and heat generation sector in the baseline scenario (NECP).<\/p>\n
If the investment decision is left to the cost optimisation algorithm, no new nuclear power plant is installed (CPRICE scenario) and electricity imports increase to almost 20%.<\/p>\n
Acknowledgements<\/h4>\n This research was funded by the Technology Agency of the Czech Republic under the TH\u00c9TA Programme, grant number TK01010119: \u201cIntegrated models for regulatory impact analysis and simulation of long-term scenarios of energy sector development\u201d (RegSim).<\/p>\n
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