The Scenario Report

2. Introduction
The power sector is a fundamental pillar of the so-called energy transition, a process driven by the policies agreed in the framework of the UNFCCC – COPs. In particular, the COP21 commitment has been signed by all the Mediterranean countries and is supported by the main political initiatives within the Region.

Opportunities for a massive renewable energy sources (RES) development rely on a very high potential in terms of wind and/or solar irradiation in most Mediterranean countries. In addition, a substantial reduction in the cost of renewable energy technologies in the past decade reinforces the economic interest in giving renewables a major place in the energy mix.

However, despite its increasing economic competitiveness and the existence of abundant resources, the development of renewables remains limited by power system integration constraints, particularly by the need to extend national grids to the high-potential RES areas and the limited deployment of solutions for managing intermittency – namely storage and interconnections.

With a view to facilitating this transition, as well as contributing to a more effective operation of the existing system, the Mediterranean Association of Transmission System Operators (Med-TSO) has defined an action plan, where one core task is the development of the Mediterranean Masterplan (MMP). This plan, which identifies and assesses a set of interconnection projects, starts with the elaboration of Med-TSO 2030 Reference Scenarios, exploring possible future situations in which the national power systems interact to eventually form a comprehensive and coordinated Mediterranean Power System. The aim of these scenarios is to build the path from the present to different possible future trends (demand, electricity generation, sector coupling, technologies evolution, policies and decarbonization targets) to give a robust framework for grid development studies.

Assuming that the Mediterranean countries account for 7% of the world population and consume around 8% of the world’s primary energy demand, one of the challenges for developing credible scenarios lies in the fact that the Mediterranean Region is characterized by striking contrasts in economic and industrial development, in international coordination, and in energy sector regulation. Northern Mediterranean countries face relatively stable demand for electricity, while Southern Mediterranean nations face a sharp increase.

Considering these differences, Med-TSO has developed long-term scenarios that incorporate the uncertainties affecting the way in which the energy transition would take place in each of the Mediterranean countries. The process has been initiated with workshops (in early 2021) during which the expert members of Med-TSO determined the issues and expectations related to the scenario building, leading to the identification of the main drivers that are likely to impact the evolution of national power systems, and their associated uncertainty margins.

Secondly, several combinations of these drivers were built in a coherent way, with particular attention paid to preserving the Mediterranean identity of the scenarios. This step led to the elaboration of three scenarios, including the drafting of their detailed storylines; these three scenarios are built to be distant enough from each other to cover most of the uncertainties that could arise within the study’s time-horizon. The description of these scenarios should guide data collection for each country, on one hand ensuring the compliance with national projections, while on the other, ensuring overall consistency.

European countries are subject to a specific approach given the aforementioned contrasts and the weight of European energy and climate policy, which implies reinforced coordination within ENTSO-E and the establishment of a correspondence with the scenarios developed for the TYNDP 2022.

2.1 What is driving the energy transition in the Mediterranean?

The energy transition process calls for a paradigm-shift in the transformation of the energy sector from fossil-based to low/zero-carbon. The current global and national policies aim to reach this transition by the second half of this century.

At the core of these strategies is the need to reduce energy-related CO2 emissions to limit climate change, as the energy sector accounts for around 40% of the total direct CO2 emissions worldwide. Decarbonization of the energy sector requires urgent action on a global and regional scale, and while a global energy transition is underway, further action is needed to reduce carbon emissions and mitigate the effects of climate change. According to IRENA, Renewable energy and energy efficiency measures could potentially achieve 90% of the required carbon emissions reduction.

2.2 The Mediterranean Region's resources and barriers for the energy transition

UNFCCC reports point to the Mediterranean Basin as one of the areas most exposed to the impacts of climate change. On the other hand, the Mediterranean Region holds great potential for clean energy, which makes it capable of tackling the challenge of energy transition.

The Mediterranean Basin presents exceptional natural and geographical conditions for the development of renewable energies: its solar irradiation and wind potential are among the highest at global level and can be exploited to the benefit of the Region and of neighbouring-high demand areas.

Moreover, Med-TSO studies have shown significant complementarities across the Region, both in generation and in load profiles, to be leveraged through a set of new interconnections. As of today, there is already an unbalanced electricity supply, with Northern Mediterranean Countries facing an occasional excess availability of intermittent renewable generation and Southern Countries facing challenges in ensuring sufficient supply to their power systems.

In addition to these characteristics, it is worth mentioning that the Region is highly committed to the energy transition: all the Mediterranean States are signatories of the Paris Agreement, and the EU countries are bound by European targets set out in the European Green Deal (55% CO2 reduction in 2030).

Nonetheless, the Mediterranean still suffers from a non-deployed integration potential, due to:
  • Policy Framework: while the Northern Shore countries are gathered under a strong institution with enforcing authority, such as the EU, which sets decarbonization targets, the same level of integration does not exist in the South and East Mediterranean countries.
  • Energy infrastructure: currently, there are 10 interconnections between the EU and neighbouring countries; among them only two have a Southern and Eastern Mediterranean border: Türkiye and Morocco. The same weakness exists regarding the South-South interconnections.
2.3 The Mediterranean Region's drivers towards energy transition

The key elements defining the scenario selection strategy are:
  • To reflect the latest developments in national energy and climate policies that are in line with European greenhouse gas reduction ambitions.
  • To acknowledge the need for high ambition in terms of European energy efficiency and renewable energy deployment.
  • To acknowledge the uncertainties associated with either pushing such renewable development and energy efficiency to the maximum or relying on low-carbon technologies and energy imports.

 
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