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

Per Fahlén (), Magnus Henrekson and Mats Nilsson
Additional contact information
Per Fahlén: Chalmers University of Technology
Mats Nilsson: Södertörn University

No 18179, IZA Discussion Papers from Institute of Labor Economics (IZA)

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 pric-es, 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 so-cial 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: renewable electricity; mission-oriented policy; green transition; cispatchable electricity; climate change; rent-seeking (search for similar items in EconPapers)
JEL-codes: L26 L52 L70 O38 P11 Q48 Q58 (search for similar items in EconPapers)
Date: 2025-10
New Economics Papers: this item is included in nep-ene, nep-env and nep-res
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://docs.iza.org/dp18179.pdf (application/pdf)

Related works:
Working Paper: In Pursuit of the Green Transition — Electricity at Any Cost? (2025)
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:iza:izadps:dp18179

Ordering information: This working paper can be ordered from
IZA, Margard Ody, P.O. Box 7240, D-53072 Bonn, Germany

Access Statistics for this paper

More papers in IZA Discussion Papers from Institute of Labor Economics (IZA) IZA, P.O. Box 7240, D-53072 Bonn, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Holger Hinte ().