IDEAS home Printed from https://ideas.repec.org/p/iza/izadps/dp18179.html
   My bibliography  Save this paper

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

Author

Listed:
  • Fahlén, Per

    (Chalmers University of Technology)

  • Henrekson, Magnus

    (Research Institute of Industrial Economics)

  • Nilsson, Mats

    (Södertörn University)

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.

Suggested Citation

  • Fahlén, Per & Henrekson, Magnus & Nilsson, Mats, 2025. "In Pursuit of the Green Transition—Electricity at Any Cost?," IZA Discussion Papers 18179, Institute of Labor Economics (IZA).
  • Handle: RePEc:iza:izadps:dp18179
    as

    Download full text from publisher

    File URL: https://docs.iza.org/dp18179.pdf
    Download Restriction: no
    ---><---

    More about this item

    Keywords

    ;
    ;
    ;
    ;
    ;
    ;

    JEL classification:

    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship
    • L52 - Industrial Organization - - Regulation and Industrial Policy - - - Industrial Policy; Sectoral Planning Methods
    • L70 - Industrial Organization - - Industry Studies: Primary Products and Construction - - - General
    • O38 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Government Policy
    • P11 - Political Economy and Comparative Economic Systems - - Capitalist Economies - - - Planning, Coordination, and Reform
    • Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:iza:izadps:dp18179. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Holger Hinte (email available below). General contact details of provider: https://edirc.repec.org/data/izaaade.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.