The importance of renewable gas in achieving carbon-neutrality: Insights from an energy system optimization model

To address the cost-effective role of the different energy sources and carriers, energy optimization models should ideally consider the key energy supply, carrier, conversion, and storage options in an endogenous way, with high temporal resolution, and accounting for both positive and negative CO₂ emissions. To do this, we develop a model optimizing dispatch and investment, meeting all the above-mentioned conditions, and we apply it to the French energy system for 2050 for a wide range of social cost of carbon (SCC) values (0 to €500/tCO₂). Our findings show that (1) the optimal carbon-neutral energy system is highly electrified (∼80% of the primary energy supply), which implies highly electrified heating and transport sectors. (2) In the presence of renewable gas, a carbon-neutral energy sector can be achieved for a robust SCC of €300/tCO₂. (3) In such a system, renewables provide more than 90% of primary energy. (4) Therefore, renewables are crucial for achieving carbon-neutrality in a cost-effective way, and in the absence of renewable gas, carbon-neutrality cannot be achieved, even for an SCC of €500/tCO₂. Finally, (5) exclusion of nuclear energy from the energy system does not induce significant extra cost or emissions.