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An incentivized cooperative scheme for transmission expansion in a 100% renewable Europe

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  • Santecchia, Alessio
  • Kantor, Ivan
  • Castro-Amoedo, Rafael

Abstract

In the age of transformative European initiatives like the Green Deal, the electrification surge in mobility, heating, and services stands as a beacon towards carbon neutrality. This study illuminates the pivotal role of electrical grid interconnection in this monumental endeavor. Through a comparative analysis between isolated grids and an interconnected European system, we unveil the extraordinary potential of a collaborative grid: a 30 EUR/kWh (18%) reduction in electricity costs and a 12 gCO2eq/MWh (24%) decrease in environmental impact. The equitable distribution of this economic advantage across European nations allows us to establish the price nations ought to pay for the security of supply (96 EUR/MWh for Belgium) or, alternatively, the rightful compensation for providing cost-effective renewable energy (75 EUR/MWh for Sweden). Overall, the collaborative grid ushers in remarkable cost savings of 130 billion EUR annually, amounting to 174 EUR per European citizen. Furthermore, uncertainty analysis, grounded in a comprehensive literature review, reinforces the robustness of our findings. The transition towards a 100% renewable, interconnected European electricity grid over the next two decades necessitates an investment of 7 trillion EUR. In annual terms, this represents a manageable 4.2% of the European GDP. The payoff, however, is colossal: an 85% reduction in the environmental footprint of the European economy, equating to 2000 Mt of annually avoided CO2 emissions–a significant stride towards combating global climate change.

Suggested Citation

  • Santecchia, Alessio & Kantor, Ivan & Castro-Amoedo, Rafael, 2026. "An incentivized cooperative scheme for transmission expansion in a 100% renewable Europe," Applied Energy, Elsevier, vol. 409(C).
    • Handle: RePEc:eee:appene:v:409:y:2026:i:c:s030626192600067x
    DOI: 10.1016/j.apenergy.2026.127415
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