In Pursuit of the Green Transition — Electricity at Any Cost?

Per Fahlén (), Magnus Henrekson and Mats Nilsson ()
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Per Fahlén: Chalmers University of Technology, Gothenburg, Sweden
Mats Nilsson: Södertörn University, Stockholm, Sweden

No 1542, Working Paper Series from Research Institute of Industrial Economics

Abstract: We examine EU and UK plans for achieving a fossil-free energy system by 2050, centered on massive electrification and large-scale deployment of wind and solar power. Using empirical trends, cost analyses, and system-function assessments, we argue that current strategies underestimate real economic, technical, and social challenges. Three scenarios for meeting 2050 electricity demand are compared: full reliance on renewables; a 50/50 split between wind-solar and nuclear; predominantly nuclear. Evidence shows that higher shares of weather-dependent generation correlate with higher electricity prices, greater volatility, and increased system integration costs. High renewable shares require extensive backup, storage, and grid reinforcement, raising complexity and environmental impacts. Overlooked costs are highlighted: reduced capacity value, transmission expansion, balancing services, and social externalities. Sustainability must encompass environmental, economic, and social dimensions. A technologically diverse, dispatchable-power-based strategy—especially with expanded nuclear power— offers a more robust, cost-effective, and socially acceptable pathway to climate neutrality than a predominant reliance on intermittent renewables.

Keywords: Climate change; Dispatchable electricity; Green transition; Mission-oriented policy; Renewable electricity; Rent seeking (search for similar items in EconPapers)
JEL-codes: L26 L52 L70 O38 P11 Q48 Q58 (search for similar items in EconPapers)
Pages: 27 pages
Date: 2025-11-18
New Economics Papers: this item is included in nep-ene, nep-env, nep-eur, nep-reg and nep-res
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Working Paper: In Pursuit of the Green Transition—Electricity at Any Cost? (2025)
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