How Dependent Are European Power Systems and Economies on Natural Gas?-A Macroeconomic Optimization for Security of Electricity Supply

How dependent are European power systems and economies on natural gas? To answer this pressing question, we coupled a simulation model for assessing security of electricity supply and an economic optimization model. With this, we were able to analyze different reduction scenarios of the amount of gas utilized in the power sector. Our results show that reducing the amount of natural gas in the European power sector by up to 30% has a relatively moderate impact on the security of electricity supply. Restrictions of 40% or more result in substantially higher reductions in electricity demand shortfall and are associated with economic costs of more than EUR 77 billion. Furthermore, we demonstrate that a close coordination of gas distribution on a European level would be instrumental in mitigating negative economic consequences. Finally, it can be deduced that a coordinated delay of planned power plant shutdowns could effectively compensate for reduced gas volumes in the electricity sector.

Automated summary

The dependency of European power systems and economies on natural gas is assessed using simulation and optimization models. The analysis shows that reducing natural gas usage in the power sector by up to 30% has a moderate impact on electricity supply security. However, restrictions of 40% or more lead to significant reductions in electricity demand shortfall and incur economic costs exceeding EUR 77 billion. Close coordination of gas distribution at the European level is found to be crucial in mitigating negative economic consequences, while delaying planned power plant shutdowns can effectively compensate for reduced gas volumes in the electricity sector.