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Among all energy activities, the electricity sector, from generation to a myriad of end uses will play a central role in reaching climate-change goals. With 11 gigatonnes (Gt) of CO2 emitted in 2008, electricity generation is the largest CO2 source in the energy sector. With a 65% increase since 1990, it is also the fastest growing CO2 emitter.

Figure 1 shows that much of the solution to rising CO2 emissions can be found in the electricity sector: end-use efficiency (from fossil-fuel plants to electric appliances), renewable sources of electricity, nuclear and carbon capture and storage - these supply-side solutions alone can bridge 47% of the emissions gap to reach the 450 Scenario of WEO2010. How these technologies will eventually be used hinges on a number of policy assumptions; the response to the recent nuclear accident in Fukushima demonstrates how unexpected events will affect, negatively or positively, global efforts to cut CO2 emissions from the energy sector. The nuclear accident in Japan will no doubt trigger more analyses on alternative routes to cut CO2 if some countries decide to lower the contribution of nuclear electricity in the coming years.

Today, the world's appetite for electricity seems endless -even if the year 2009 showed a dip in electricity demand for the first time in decades, largely as a result of the global recession. Electricity provides services of great versatility, often at higher energy efficiency and lower cost than oil products, natural gas or coal: the end-use efficiency gains can be such that they compensate for the losses in transforming fossil fuels into electricity and transmitting it to the consumer.

It meets basic needs, from refrigeration to lighting, and fuels billions of electric devices from computers to new entertainment technologies that were unimaginable two decades ago (IEA, 2009). Electricity could also make significant inroads into the market share of oil in the transportation sector, according to IEA climate-friendly scenarios.

The remarkable consensus among most energy experts and economists on the role of electricity in counteracting human-induced climate change leads to the following assumptions:

F Power generation needs to be "decarbonised" - be produced without net CO2 emissions - by the second half of this century.

F The simultaneous use of enhanced electricity in all energy services will increase overall energy efficiency, a major contribution to cutting CO2 emissions.1

The required transformation, whether it is measured in new low-carbon generation capacity, in electricity savings on the end-use side, in the number of electric vehicles deployed, or in the hundreds of billions of dollars that must be spent to transform power generation globally, is nothing short of enormous.

1. The International Electricity Partnership, comprising the electricity industries in Australia, Canada, Europe, Japan, Latin America and the United States, stated that "the necessary global reductions can be achieved by 2050 through the simultaneous decarbonisation of electricity and the electrification of the domestic, commercial and transport sectors when combined with significant improvements in energy efficiency" (IEP, 2010).

Unlike what the term suggests, this energy 'revolution' will not happen spontaneously. It requires strong policy signals, new approaches to encourage investments, and ways to put long-term energy goals on the agenda of decision makers for action today.

Three scenarios for a common goal

In March this year, the European Commission released a Roadmap for Moving to a Competitive Low-Carbon Economy in 2050, indicating milestones towards cutting its greenhouse gas emissions by 80% to 95% from 1990 levels by 2050 (EC, 2011). The implications for power generation concur with earlier projections, including those in the IEA ETP2010: CO2 from electricity would be cut by 93% to 99% if the European Union were to achieve an 80% reduction in total greenhouse gas emissions. In the IEA BLUE Map scenario, the whole power generation sector of OECD Europe in 2050 would emit a mere 74 million tonnes of CO2, equivalent to one-fifth of Germany's power sector emissions in 2008 (EC, 2011).

This official EC report was preceded by two independent scenario analyses: Power Choices, a publication by Eurelectric, the European association of the electricity industry (2010), and Roadmap 2050, a set of projections authored by the European Climate Foundation (2010). While one can be struck by the unanimity with which these two organisations, along with the IEA, foresee the development of power generation under a carbon constraint (i.e. the decarbonisation agenda), differences in the scenarios illustrate some of the strategic choices ahead.

Table 1

Total investments for a decarbonised electricity sector in Europe

Table 1

Total investments for a decarbonised electricity sector in Europe

Power Choices

Roadmap 2050*

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