Quantitative Assessment of the Impact of the Strategic Energy Technology Plan on the European Power Sector

Abstract

The goal of this analysis is to capture the effect of increasing research, development and demonstration (RD&D) efforts for a set of low-carbon power technologies on the development of the European energy sector. The report finds that an increase in research efforts on a global level, that for the EU are in line with the RD&D investments proposed in the context of the European Strategic Energy Technology Plan, will contribute to reducing the costs of currently less mature low-carbon technologies, and therefore accelerate their market entry. Following from the lower technology investment costs, the economic rate of return of the additional SET-Plan investments in the EU would be positive, reaching around 15% for a time horizon between 2010 and 2030. The cumulative (discounted) benefit of the RD&D investments would be negative in early years before turning positive around the year 2020 and remaining so thereafter.