European Integrated Renewable Energy Model (EIREM)

Renewable energies are an essential part of the electricity markets already today. Their importance is intensified by the massive further expansion of this form of energy, which is necessary to achieve climate neutrality – also due to the increasing demand for green electricity for sector coupling. So far, this kind of electricity has largely been subsidized by Germany’s Renewable Energy Sources Act (EEG) on the basis of a fixed-price remuneration system, a market premium model and a tendering model. In recent years, however, there has been increasing investment in renewable energy plants via so-called power purchase agreements (PPAs) that bypass the EEG. Since this form of financing is no longer subsidized, renewable energies have to face competition on the market.

Financial data processing against solar panel and windmill in background. global finances and renewable energy concept

The extent to which such investments will be economically viable in the future depends to a large extent on how electricity prices, and thus also renewable energy market values, will develop in the future. Individual renewable energy plants or renewable energy parks are already economically viable today, and a growing segment is emerging. As a result, market actors and policy makers are confronted with the question of when which technologies can achieve economic viability in which regions. Related questions include: Can targets for renewable energy expansion be achieved without subsidies? How much green hydrogen can Germany and Europe produce themselves in the future?

Since the expansion of renewable energies is usually not determined as an assumption in the model, but rather has a fixed background, most energy system models cannot adequately answer these questions. Our integrated European renewable energy model EIREM, however, forecasts the future development of renewable energies in the electricity sector, taking into account technical, economic and political conditions. The model is based on costs and potentials of renewable energies in Europe in the electricity sector in high spatial resolution. By integrating the model with our energy system model SESAM, it is possible to model support instruments such as fixed-price remuneration systems, tendering or premium models, and quota models, in addition to the option of suspending renewable energy subsidies.

Key strengths of the EIREM model:

  • Regional development of installed capacity and electricity generation of renewable energies
  • Economic efficiency of individual renewable energy technologies and regions
  • Subsidy costs of different renewable energy technologies for European countries, if applicable
  • Hourly feed-in profiles for renewable energies

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