How Dependent Are European Power Systems and Economies on Natural Gas?—A Macroeconomic Optimization for Security of Electricity Supply

Christina Kockel, Lars Nolting, Kevin Pacco, Carlo Schmitt, Albert Moser () and Aaron Praktiknjo
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Christina Kockel: Institute for Future Energy Consumer Needs and Behavior (FCN), RWTH Aachen University, 52074 Aachen, Germany
Lars Nolting: Institute for Future Energy Consumer Needs and Behavior (FCN), RWTH Aachen University, 52074 Aachen, Germany
Kevin Pacco: Institute for High Voltage Equipment and Grids, Digitalization and Energy Economics (IAEW), RWTH Aachen University, 52062 Aachen, Germany
Carlo Schmitt: Institute for High Voltage Equipment and Grids, Digitalization and Energy Economics (IAEW), RWTH Aachen University, 52062 Aachen, Germany
Albert Moser: Institute for High Voltage Equipment and Grids, Digitalization and Energy Economics (IAEW), RWTH Aachen University, 52062 Aachen, Germany

Energies, 2022, vol. 15, issue 23, 1-12

Abstract: How dependent are European power systems and economies on natural gas? To answer this pressing question, we coupled a simulation model for assessing security of electricity supply and an economic optimization model. With this, we were able to analyze different reduction scenarios of the amount of gas utilized in the power sector. Our results show that reducing the amount of natural gas in the European power sector by up to 30% has a relatively moderate impact on the security of electricity supply. Restrictions of 40% or more result in substantially higher reductions in electricity demand shortfall and are associated with economic costs of more than EUR 77 billion. Furthermore, we demonstrate that a close coordination of gas distribution on a European level would be instrumental in mitigating negative economic consequences. Finally, it can be deduced that a coordinated delay of planned power plant shutdowns could effectively compensate for reduced gas volumes in the electricity sector.

Keywords: security of electricity supply; natural gas; European power system; economic optimization (search for similar items in EconPapers)
JEL-codes: Q Q0 Q4 Q40 Q41 Q42 Q43 Q47 Q48 Q49 (search for similar items in EconPapers)
Date: 2022
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