4 Storyline Development Methodology and Scenario Drivers //

Storylines aim to ensure sufficient differences are made between the scenarios by correctly identifying high-level drivers and quantifying the outcomes.

The storylines for the TYNDP 2024 scenarios continuing to use the same high-level drivers of TYNDP 2022 ­storylines; as illustrated in Figure 3.

Green Transition reflects the level of GHG reduction targets and is one of the most important political drivers of energy scenarios. The European Union has ratified the Paris Agreement. This implies a commitment to the long-term goal of keeping the increase in global average temperature to well below 2 °C compared to pre-industrial levels and to pursue efforts to limit the increase to 1.5 °C. Since there are different emission mitigation pathways¹ as described by the Intergovernmental Panel on Climate Change (IPCC), intermediate targets for 2030 and 2050 and a carbon budget up to 2100 have to be defined.

The European climate law, since July 2021, writes into law the objective outlined in the European Green Deal, establishing a legally binding commitment for Europe’s economy and society to achieve climate neutrality by 2050. Additionally, the law establishes a milestone target of reducing net greenhouse gas emissions by a minimum of 55% by 2030, relative to the levels recorded in 1990.² These overall EU targets should be accompanied by draft NECPs, which each Member State had to submit to the European Commission by 30th of June 2023.³

The scenarios will consider a carbon budget including emissions and removals from agriculture and from Land Use, Land Use Change and Forestry (LULUCF) to make sure the increase will be limited with 1.5 °C. The scenario building exercise will result in a decarbonisation pathway till 2050 and the ENTSOs will transparently present the cumulative emissions of their scenarios in comparison with the carbon budget assumed for the EU27.

Beyond climate targets, the European energy system will be increasingly shaped by societal decisions and initiatives acting as a driving force of the energy transition. Today, the EU imports account for almost 60 % of its primary energy demand, but the import needs differ highly from fuel to fuel and country to country. These large imports entering Europe through a limited number of points together with large scale thermal power generation units have shaped a rather centralised European energy system.

There is rapid decline of the indigenous natural gas production within the EU, amongst others noteworthy factors are the future shut down of the Groningen field and the exit of the United Kingdom from the EU-28. At least in the short to medium term, the EU-27 will need to maintain its current share of import of gas demand. It is worth stating that the uptake of renewables⁴ has not led to lower import shares over the past 20 years.⁵ At the same time, continued dependence on energy imports is perceived as a risk by some stakeholders due to uncertainties in the geopolitical context. In addition, the need to switch to low carbon or renewable imports triggers the question of their long-term availability. Such availability can be negatively impacted by a slow energy transition of producing countries or a situation of high global demand where Europe would be a price-taker.

These stakeholders favour the maximisation of the EU RES potential facilitated by local initiatives and a greater participation of prosumers in the operation of the energy system as described in the Clean Energy Package. Following that path would move the structure of the energy system away from its current centralised structure.

Regarding hydrogen, the ESI and EU Hydrogen Strategy illustrate the duality of the driving forces. The ESI emphasises the benefits of “linking up the different energy carriers and through localised production, self-production and smart use of distributed energy supply. System integration can also contribute to greater consumer empowerment, improved resilience and security of supply”. The EU Hydrogen Strategy also foresees “cooperation opportunities with neighbouring countries and regions of the EU” and the establishment of a “global hydrogen market”. The strategies of EU Member States present a wide range of perspectives, with some NECPs and National long-term strategies aiming at a strong reduction of energy imports while some hydrogen strategies emphasise the need for global cooperation for a future hydrogen economy. On a global scale, similar trends can be seen in Japan and Korea as importing countries and Morocco, Australia or Norway as possible hydrogen exporting countries.⁶

The level of decentralisation and autonomy can strongly impact the structure of the European energy system and therefore the need of infrastructure. At present there are a range of possible futures reflecting the uncertainties around societal aspiration, global evolution and technological requirement. The purpose of different scenario storylines is to understand the impact from traveling differing paths that lead to a common net-zero future.

Energy Efficiency is a result of innovation and consumer behaviour and can be a major factor in the transition of the energy system. New appliances and technological innovations reduce specific energy demand (e. g. heat pumps) or facilitate the participation of consumer in the energy system (e. g. digitalisation and smart metering). On the other, new technologies can lead to additional energy demand (e. g. e-scooters replacing walk or public transport).

Moreover, increasing energy efficiency can also lead to an increased rate of consumption (Jevons Paradox). Heat pumps for example provide reduced energy demand through more efficient heating.

But at the same this technology also provides the option for cooling, increasing energy demand in summer. Finally, consumers can reduce their consumption by modal shifts, for example using the bike instead of the car for shorter distances or by more shared economy through public transport and vehicle sharing. This also applies to agriculture and industrial sectors, where a drive towards circularity could lower energy demand, but an increase economic activity could at least in part offset the efficiency gains. Assumptions need to be made for each sector and energy application.

Technological progress is a driver for the energy system evolution. It can act both as an enabler of other drivers (e. g. more powerful wind turbine helping to further harvest EU RES potential) and as a trigger (e. g. electrolysis paving the way to a low carbon hydrogen economy).

Further assumptions are needed to define the market shares for different technologies/appliances. Assumed market shares should reflect maturity and replacement rate of the relevant technologies.

Assumptions need to reflect national policies/strategies and future consumer trends. Moreover, in certain cases it is necessary to make the assumptions that are specific to certain countries, sub-sectors or even individual processes.

ENTSOG and ENTSO-E apply the aforementioned methodology to create a storyline matrix. The storyline matrix provides an overview of each parameter taken into account and reflects the technological or societal behaviour drivers being considered. It illustrates from a qualitative perspective how they differ from one storyline to the next (and not compared to present situation). This storyline matrix is published as Annex-1.

All the parameter choices in the storyline matrix translated into a detailed quantification in the next stage of the scenario building process. This quantification also accounts for European and national policies as well as other studies. The scenario input datasets as a result of this quantification is provided as part of the public consultation published in July 2023.