For reaching the 2 °C climate target, the robust growth of electricity generation from variable renewable energy sources (VRE) in the power sector is expected to continue. Accommodation of the power system to the variable, uncertain and locational-dependent outputs of VRE causes integration costs. Integrating VRE into a well-functioning electricity market can minimize integration costs and drive investments in VRE and complementary flexible resources. However, the electricity market in the European Union (EU), as currently designed, seems incapable to deliver this end. This paper aims to provide a comprehensive literature review of barriers to the large-scale market integration of VRE in the EU electricity market design. Based on the set-up of the EU electricity market, a framework was developed to incorporate the most pertinent market integration barriers and resulting market inefficiencies. This paper concludes that an overhaul is needed for the current EU electricity market to address all barriers identified. Firstly, a discrete auction intraday market, a marginal pricing balancing market, a two-price imbalance settlement and a nodal pricing locational marginal pricing mechanism seem more promising in limiting integration costs. Secondly, to support business cases of VRE and complementary flexible resources in the electricity market, a level playing field should be established and the price cap should be lifted up to the value of lost load (VOLL). Meanwhile, to fit VRE's market participation, a higher time resolution of trading products and later gate closure time in different submarkets would be required. Lastly, feed-in support schemes currently widely used for VRE investments might be inconsistent with market integration, as they increase integration costs and lock VRE investments in a subsidy-dependent pathway. To avoid such lock-in, further investigation of alternative capacity-based support schemes is recommended.@en

The transition of the European iron and steel industry (ISI) towards low-carbon manufacturing is crucial for the European Union (EU)’s 2050 climate neutrality objective. One emerging solution is electrification by using hydrogen (H2) as iron ore reductant, which increases specific electricity use per tonne of steel up to 35 times compared to the conventional, most adopted coal-based technology. This study develops three scenarios, encompassing a moderate to an accelerated ISI transition, to evaluate the impact of the ISI decarbonisation on the power system CO2 emissions, generation mix and volume, and marginal prices in 2030. The study first estimates future electricity and H2 demand by considering country-specific technologies deployment and energy intensities. Then, these estimates serves as input to the model METIS to simulate European power system operations through a unit commitment and economic dispatch problem. The study shows that the power system can accommodate a transition of the ISI that substitutes 28% of the coal-based production with low carbon technologies, mainly based on H2. This leads to a 25% reduction in direct CO2 emissions and a demand increase of 20 TWh of electricity and 40 TWhHHV of H2. Furthermore, a 50% reduction in indirect power system emissions is achieved, compared to 2018, thanks to the substantial renewable power capacity deployment foreseen in the coming years. The study also demonstrates that a reduction of indirect CO2 emissions by over 85% can be achieved by deploying 1.2 and 2.7 GW of renewable power generators, and 200 and 400 MW of electrolyser capacity for each million tonne of steel produced annually with low-carbon technologies. Additional renewable capacity that ensures green steel production is also key to maintaining stable electricity prices.@en

To meet the European Union's 2050 climate neutrality target, future electricity generation is expected to largely rely on variable renewable energy (VRE). VRE supply, being dependant on weather, is susceptible to changing climate conditions. Based on spatiotemporally explicit climate data under a Paris-proof climate scenario and a comprehensive energy conversion model, this study assesses the projected changes of European VRE supply from the perspective of average production, production variability, spatiotemporal complementarity, and risk of concurrent renewable energy droughts. For the period 2045–2055, we find a minor reduction in average wind and solar production for most of Europe compared to the period 1990–2010. At the country level, the impact of climate change on average VRE production is rather limited in magnitude (within ±3% for wind and ±2% for solar). The projected mid-term changes in other aspects of VRE supply are also relatively small. This suggests climate-related impacts on European VRE supply are less of a concern if the Paris-proof emission reduction pathway is strictly followed. Based on spectral analysis, we identify strong seasonal wind-solar complementarities (with an anticorrelation between -0.6 and -0.9) at the cross-regional level. This reduces the demand for seasonal storage but requires coordinated cross-border efforts to develop a pan-European transmission infrastructure. The risk of concurrent renewable energy droughts between a country and the rest of Europe remains non-negligible, even under the copperplate assumption. Central Western European countries and Poland are most vulnerable to such risk, suggesting the need for the planning of adequate flexibility resources.@en

The decarbonisation of the iron and steel industry is expected to significantly increase its electricity consumption due to higher levels of electrification and the partial shift to hydrogen as iron reductant. With its batch processes, this industry offers large potential for the application of demand response strategies to achieve electricity cost savings. Previous research has primarily focused on investigating the demand response potential for currently operating manufacturing processes and partly for future low-carbon processes. This study aims to consolidate this knowledge and apply it to a modelling analysis that investigates the demand response potential of two new low-carbon technologies: the hydrogen-based direct reduction of iron with electric arc furnace technology (H2-DRI-EAF) and the blast furnace basic oxygen furnace technology retrofitted with carbon capture (BF-BOF-CCUS). A cost optimisation approach is applied to plant configurations with varying parameters relevant for flexibility, such as electrolyser and storage sizes, and in the context of future electricity prices. Multiple price profiles are selected to encompass uncertainties on the development of the power system. The potential for a H2-DRI-EAF plant is 3–27 times higher than for a BF-BOF-CCUS, with electricity costs savings potentials of 35% and 3%, respectively. The study finds that electricity prices have the most significant impact on the profitability of investing in electrolyser overcapacities, which enable operating costs reduction. Therefore, the profitability of these investments are strongly dependent on future power system configurations.@en

Power generation from intermittent renewable energy sources in northwest Europe is expected to increase significantly in the next 20 years. This reduces the predictability of electricity generation and increases the need for flexibility in electricity demand. Data on demand response (DR) capacities of large electricity consumers is limited for most countries. Steel production processes are among the industrial processes with the highest DR potentials. In this study, we focus on DR options provided by changing the electricity generation rate at Tata Steel in IJmuiden (which produces 3 % of total electricity consumption in the Netherlands). For evaluating the technical DR potential we have developed a linear programming model in MATLAB. The model calculates the optimal allocation of works arising gases of Tata Steel in IJmuiden in case of a call for emergency balancing power. The optimization is done subject to the technical constraints of the distribution system and storage potential of the works arising gases, the demand of the Tata Steel plants for these gases, and the ramp-up rate of the power plant that runs on these gases. Results show that Tata Steel in IJmuiden can supply 10 MW for two Programme Time Units (i.e. PTU is defined as a 15 minute period in the Netherlands by TenneT) of positive DR capacity with an availability rate of 97 %. This is not enough for participating in the current emergency capacity programs in the Netherlands, which require at least 20 MW for longer than 1 PTU. Tata Steel can provide 20 MW DR capacity with an availability rate of 65 %. Therefore, if the availability rate requirements for emergency balancing programs in the Netherlands do not drop, Tata Steel would need to pool with other suppliers in order to participate in such programs. The negative demand response potential of Tata Steel in IJmuiden is found to be 20 MW supplied for 3 PTUs and 4 PTU with doubling of blast furnace gas storage capacities.@en

Power generation from intermittent renewable energy sources in northwest Europe is expected to increase significantly in the next 20 years. This reduces the predictability of electricity generation and increases the need for flexibility in electricity demand. Data on demand response (DR) capacities of electricity-intensive consumers is limited for most countries. In this paper, we evaluate the DR potential that can be provided to the Dutch national grid by the integrated steelmaking site of Tata Steel in IJmuiden (TSIJ). TSIJ generates electricity from its works arising gases (WAGs). The DR potentials are evaluated by using a linear optimisation model that calculates the optimal allocation of WAGs of TSIJ in case of a call for DR by the transmission system operator. The optimisation is done subject to the technical constraints of the WAG distribution network, WAG storage capacities, the on-site demand for WAGs and the ramp-up rate of the power plant that runs on WAGs. Results show that TSIJ can supply 10 MW for two programme time units (equal to 15-min period in the Netherlands) of positive DR capacity (demand reduction) with an availability rate of 97%. This is not sufficient for participating in the current emergency capacity programs in the Netherlands, which require at least 20 MW for longer than one programme time unit. Tata Steel can provide 20 MW DR capacity with an availability rate of 65%. The negative DR capacity (demand increase) of Tata Steel in IJmuiden is found to be 20 MW supplied for three programme time units and four programme time units with doubling of blast furnace gas storage capacities.@en