Economically-optimal electricity generation for the European energy system

Phoebe Koundouri (), Miranda McLannahan, Giannis Arampatzidis, Angelos Alamanos and Dimitris Raptis

No 2567, DEOS Working Papers from Athens University of Economics and Business

Abstract: This paper investigates cost-optimal electricity generation pathways for Europe to achieve carbon neutrality by 2050. Using a pan-European optimization framework developed in the Low Energy Analysis Platform (LEAP) with its NEMO least-cost solver, the study models 35 interconnected countries and incorporates harmonized technology costs, fuel prices and electricity demand projections. The model minimizes total discounted system costs while allowing cross-border trade to capture the effect of transmission on balancing variable renewable energy. Results indicate significant geographical disparities in decarbonization trajectories: by 2050, 14 countries achieve fully renewable electricity systems, while others continue to rely on biomass or nuclear due to capacity and land constraints. Large-scale renewable deployment increases generation costs in several regions, whereas early adopters benefit from long-term fuel savings and export opportunities. Cross-border electricity flows prove essential for system stability and cost efficiency, emphasizing the importance of interconnection and aligned national strategies. Our findings highlight both the feasibility and complexity of a coordinated European energy transition and offer policy recommendations regarding infrastructure investment, decarbonization alignment and targeted support for lagging regions. The study underscores the need for improved spatial and temporal cost datasets to enhance future policy-relevant modelling.

Keywords: Energy; LEAP; Emissions; Least-Cost Optimization; Europe; Sustainable development (search for similar items in EconPapers)
Date: 2025-12-01
New Economics Papers: this item is included in nep-eec
References: Add references at CitEc
Citations:

Downloads: (external link)
http://wpa.deos.aueb.gr/docs/2025.Economically.opt ... icity.generation.pdf First version (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:aue:wpaper:2567

Access Statistics for this paper

More papers in DEOS Working Papers from Athens University of Economics and Business Contact information at EDIRC.
Bibliographic data for series maintained by Ekaterini Glynou ().