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NET

ZEROENERGY

BY

2060Charting

the

Path

of

Europeand

Central

Asia

Towarda

Secure

and

SustainableEnergy

FutureCONTENTSAbbreviationsandacronyms

.........................................................................................................6Definitionsofsubregions................................................................................................................7Acknowledgments

...........................................................................................................................8Executivesummary

.......................................................................................................................10Countrycoverage

............................................................................................................................11Key

findings

on

short-term

energy

security

................................................................................11Key

findings

on

the

energy

transition

and

energy

security

in

the

longer

term......................13The

use

of

coal,

oil,

and

gas

in

the

region

is

on

the

decline

through

2060....................14Renewable

energy

can

gradually

replace

fossil

fuels,

aided

by

energy

efficiency........14Greater

investment

will

be

needed

to

achieve

the

Net

Zero

2060

goal.........................15Part1•Short-termenergysecurityintheregion:Thecrisisisnotover................................17Redefining

energy

security.............................................................................................................17Gas

security......................................................................................................................................19Impact

on

Russia’s

gas

production

......................................................................................22Impact

on

countries

in

the

region........................................................................................23Gas

security

in

the

EU4

and

Western

Balkan

countries....................................................26Gas

security

in

Central

Asia...................................................................................................27The

limits

of

Türkiye’s

ability

to

absorb

Russia’s

surplus

gas...........................................28Oil

security:

Ongoing

shifts

............................................................................................................30Energy

security

and

the

energy

transition...................................................................................35Part2•Theenergytransition:Apathwaytoanetzeroregionby2060.................................37What

does

it

take

to

decarbonize

the

region?

............................................................................42Transforming

the

region’s

gas

sector...........................................................................................45Developing

a

hydrogen

sector.......................................................................................................48Transforming

the

region’s

power

sector......................................................................................52The

importance

of

system

flexibility

for

increasing

the

role

of

renewables..................55The

combined

effect

of

better

demand

response

and

heightened

production

ofgreen

hydrogen

......................................................................................................................59The

role

of

regional

power

exchanges

for

energy

security..............................................59Transforming

energy

use

in

the

transport,

buildings,

and

industrial

sectors........................62Buildings

..................................................................................................................................63Transport

.................................................................................................................................65Industry....................................................................................................................................66References

......................................................................................................................................68Appendix1•MethodologyoftheWorldBank’senergymodel

................................................72Appendix2•Decarbonizingdistrictheating

..............................................................................77Appendix3•Low-carbonfertilizerproductioninCentralAsia................................................79Appendix4•Selectedliquid

fuelpricingsubsidiesimplementedinEuropeand

CentralAsia..

81Appendix5•GreenhousegasemissionsintheEuropeandCentralAsiaregionin2020.....82List

of

boxesBox2.1•

World

Bank

Group

support

of

green

hydrogen

projects

in

Poland

and

Chile..................49Box2.2•

Delaying

the

transmission

of

energy

price

shocks

to

consumers:

Good

or

bad?............57List

of

figuresFigureES.1•

Actual

and

projected

energy-related

greenhouse

gas

emissions

by

sector

in

Europeand

Central

Asia

under

the

Net

Zero

2060

scenario,

2019–60............................................................13FigureES.2•

Energy

sector

milestones

on

the

pathway

to

Net

Zero

Energy

2060

in

Europe

andCentral

Asia

region.....................................................................................................................................16Figure1.1•

Net

imports

in

Europe

and

Central

Asia

region

as

share

of

total

energy

supply,

bycountry

and

fuel

type,

2019......................................................................................................................18Figure1.2•

Domestic

fossil

fuel

production

as

percentage

of

total

energy

supply

(self-sufficiency)in

Europe

and

Central

Asia,

by

country,

2020........................................................................................19Figure1.3•

Pipeline

gas

flows

from

the

Russian

Federation

to

the

European

Union,

January

2021–June

2023.....................................................................................................................................................20Figure1.4•

Actual

and

projected

natural

gas

prices

at

the

Dutch

Title

Transfer

Facility,January

2016–July

2031..............................................................................................................................21Figure1.5•

Actual

and

projected

changes

in

Russian

natural

gas

production

from

2021

levels,2022–25........................................................................................................................................................22Figure1.6•

Gas

dependence

and

gas

import

dependence

in

Europe

and

Central

Asia,

by

country,2020

...........................................................................................................................................................23Figure1.7•

Underground

storage

capacity

as

a

share

of

total

consumption

in

Europe

and

CentralAsia,

by

subregion,

2021............................................................................................................................24Figure1.8•

Explicit

and

implicit

natural

gas

subsidies

within

Europe

and

Central

Asia

as

a

shareof

GDP,

2022

...............................................................................................................................................25Figure1.9•

Natural

gas

consumption

subsidies

in

selected

countries

in

Europe

and

Central

Asia,2010–22........................................................................................................................................................26Figure1.10•

Projected

natural

gas

balance

in

Central

Asia

in

the

base

case

and

gas

unionscenarios,

2023–25.....................................................................................................................................28Figure1.11•

Actual

and

projected

gas

production,

consumption,

and

import

dependence

inTürkiye,

2019–30.........................................................................................................................................29Figure1.12•

Actual

and

hypothetical

Turkish

imports

of

Russian

gas,

2019–30.............................30Figure1.13•

Seaborne

crude

oil

exports

by

the

Russian

Federation,

by

destination,January

2022

and

July

2023.......................................................................................................................31Figure1.14•

Exports

of

Russian

oil

products,

by

destination,

January

2022

and

July

2023...........32Figure1.15•

EU

imports

of

Russian

crude

oil

and

oil

products,

January

2019–April

2023

(millionsof

tonnes).....................................................................................................................................................32Figure1.16•

Domestic

gasoline

prices

without

taxes

in

selected

countries

in

Europe

and

CentralAsia,

January

2019–July

2023

(€/liter).......................................................................................................34Figure1.17•

Global

upstream

investments

in

oil

and

gas,

2010–26

($

billion)................................35Figure2.1•

Actual

and

projected

energy-related

greenhouse

gas

emissions

by

sector

in

Europeand

Central

Asia

under

the

reference,

partial

decarbonization,

and

Net

Zero

2060

scenarios,2019–60........................................................................................................................................................38Figure2.2•

Actual

and

projected

shares

of

clean

and

fossil

fuels

in

the

primary

energy

mix

inEurope

and

Central

Asia

under

the

reference

and

Net

Zero

2060

scenarios,

2019–60...................39Figure2.3•

Projected

final

energy

consumption

in

Europe

and

Central

Asia

under

the

referenceand

Net

Zero

2060

scenarios,

by

fuel

type.............................................................................................40Figure2.4•

Energy

sector

milestones

on

the

pathway

to

Net

Zero

Energy

2060

in

Europe

andCentral

Asia

region.....................................................................................................................................43Figure2.5•

Actual

and

projected

global

consumption

of

natural

gas

under

the

reference

and

NetZero

2060

scenarios,

2019–60..................................................................................................................45Figure2.6•

Actual

and

projected

global

consumption

of

natural

gas

under

the

World

Bank’s

NetZero

2060

scenario,

by

sector,

2019–60..................................................................................................46Figure2.7•

Actual

and

projected

production,

consumption,

and

trade

balance

in

Europe

andCentral

Asia

under

the

World

Bank’s

Net

Zero

2060

scenario,

2019–60............................................46Figure2.8•

Actual

and

projected

net

export

balance

in

Europe

and

Central

Asia

under

the

WorldBank’s

Net

Zero

2060

scenario,

2019–60................................................................................................47Figure2.9•

Actual

and

projected

consumption

of

natural

gas

in

Europe

and

Central

Asia

underthe

World

Bank’s

Net

Zero

2060

scenario,

by

sector,

2019–60

...........................................................47Figure2.10•

Actual

and

projected

global

consumption

of

low-carbon

hydrogen

and

share

of

totalfinal

energy

consumption

under

the

World

Bank’s

Net

Zero

2060

scenario,

2019–60....................48Figure2.11•

Actual

and

projected

production

of

low-carbon

hydrogen

in

Europe

and

Central

Asiaunder

the

World

Bank’s

Net

Zero

2060

scenario,

2019–60..................................................................50Figure2.12•

Projected

production

of

low-carbon

hydrogen

from

electrolysis

and

from

fossil

fuelswith

carbon

capture,

usage,

and

storage

in

Europe

and

Central

Asia

in

2060

under

the

WorldBank’s

Net

Zero

2060

scenario,

by

subregion........................................................................................51Figure2.13•

Project

pipeline

in

2023

and

projected

production

of

low-carbon

hydrogenin

2060

in

Europe

and

Central

Asia

under

the

World

Bank’s

Net

Zero

2060

scenario,

bysubregion.....................................................................................................................................................51Figure2.14•

Projected

use

of

low-carbon

hydrogen

sector

in

Europe

and

Central

Asiain

2060

under

the

World

Bank’s

Net

Zero

2060

scenario,

by

subregion............................................52Figure2.15•

Aggregate

trends

in

electricity

generation

for

ECA

countries,

2010–20

.....................53Figure2.16•

Share

of

renewables

in

energy

mix

in

Europe

and

Central

Asia,

by

country,

2019..54Figure2.17•

Actual

and

projected

electricity

generation

by

fuel

in

Europe

and

Central

Asia

underthe

reference

and

Net

Zero

2060

scenarios,

2025–60..........................................................................54Figure2.18•

Flexible

electricity

system

resources

and

the

role

of

demand

aggregators

..............59Figure2.19•

Actual

and

projected

total

final

energy

consumption

in

Europe

and

Central

Asia

(excludingRussia

and

Belarus)

under

the

reference

and

Net

Zero

2060

scenarios,

by

sector,

2021–60......................62Figure2.20•

Actual

and

projected

total

final

energy

consumption

by

buildings

in

Europe

andCentral

Asia

(excluding

Russia

and

Belarus)

under

the

reference

and

Net

Zero

2060

scenarios,

byfuel

type,

2021–60

......................................................................................................................................63Figure2.21•

Actual

and

projected

number

of

residential

heat

pumps

in

Europe

and

Central

Asiaunder

the

World

Bank’s

Net

Zero

2060

scenario,

by

subregion,

2019–60.........................................64Figure2.22•

Actual

and

projected

uptake

of

insulation

measures

and

heat

pumps

in

Europe

andCentral

Asia

under

the

reference

and

Net

Zero

2060

scenarios,

2019–60........................................64Figure2.23•

Actual

and

projected

total

final

energy

consumption

in

the

transport

sectorin

Europe

and

Central

Asia

(excluding

Russia

and

Belarus)

under

the

reference

and

NetZero

2060

scenarios,

2021–60..................................................................................................................65Figure2.24•

Actual

and

projected

number

of

electric

vehicles

in

Europe

and

Central

Asia

underthe

World

Bank’s

Net

Zero

2060

scenario,

by

vehicle

type,

million

vehicles,

2019–60

....................66Figure2.25•

Actual

and

projected

final

energy

consumption

of

industry

sector

in

Europe

andCentral

Asia

under

the

reference

and

Net

Zero

2060

scenarios,

by

fuel

type,

2021–60

.................67FigureA1.1•

Structure

of

the

KINESYS

model

......................................................................................72FigureA3.1•

Levelized

cost

of

green

(solar-powered),

blue,

and

gray

ammonia

production

inCentral

Asia

under

the

Net

Zero

2060

scenario.....................................................................................80List

of

tablesTable2.1•

Projected

investment

needs

in

Europe

and

Central

Asia

in

the

reference

and

NetZero

2060

scenarios,

by

sector.................................................................................................................44TableB2.2.1•

Ability

to

mitigate

transmission

of

short-term

price

shocks

to

consumers

in

Europeand

Central

Asia,

by

country.....................................................................................................................58Table2.2•

Day-ahead,

intra-day,

and

futures

markets

of

power

exchanges

in

Europe

and

CentralAsia,

by

country

..........................................................................................................................................61TableA1.1•

Data

sources

for

and

inputs

into

the

model....................................................................74TableA4.1•

Selected

liquid

fuel

pricing

measures

implemented

in

Europe

and

Central

Asiain

2022,

by

country.....................................................................................................................................81TableA5.1•

Global

greenhouse

emissions

and

emissions

within

Europe

and

Central

Asia,

bycountry,

2020

..............................................................................................................................................82ABBREVIATIONS

AND

ACRONYMSb/dbarrels

per

daybcmbillion

cubic

metersCCDRCCSCCUSCO2DHCountry

Climate

and

Development

Reportcarbon

capture

and

storagecarbon

capture,

usage,

and

storagecarbon

dioxidedistrict

heatinge-mobilityECAESMAPEUelectric

mobilityEastern

Europe

and

Central

AsiaEnergy

Sector

Management

Assistance

ProgramEuropean

UnionEU4EVBulgaria,

Croatia,

Poland,

Romaniaelectric

vehicleIEAInternational

Energy

AgencyInternational

Energy

Agency’s

Energy

Technology

Systems

Analysis

Programgross

domestic

productInternational

Group

of

Liquefied

Natural

Gas

Importersgeographic

information

systemgreenhouse

gasIEA-ETSAPGDPGIIGNLGISGHGGWgigawattIIASA

GLOBIOM

International

Institute

for

Applied

Systems

Analysis,

Global

Biosphere

Management

ModelIFCIMFInternational

Finance

CorporationInternational

Monetary

FundIntergovernmental

Panel

on

Climate

ChangeKnowledge-based

Investigation

of

Energy

System

Scenariosliquefied

natural

gasliquefied

petroleum

gasmegawattmegawatt

hourmegatonneIPCCKINESYSLNGLPGMWMWhMtttonnetCO

eSSPTIMESTFCTPESTTFtonnes

of

carbon

dioxide

equivalentShared

Socioeconomic

PathwayThe

Integrated

MARKAL-EFOM

System

of

IEA-ETSAPtotal

final

energy

consumptiontotal

primary

energy

supplyTitle

Transfer

Facility2TWhUNterawatt

hourUnited

NationsUS

EPAVATUnited

States

Environmental

Protection

Agencyvalue

added

taxAll

currency

is

in

United

States

dollars

unless

otherwise

indicated.Unless

otherwise

noted,

the

graphs

and

charts

presented

herein

represent

results

of

an

original

modelconceived

by

the

authors,

and

historical

data

are

sourced

from

the

International

Energy

Agency’s

2019

and2020

Energy

Balances.DEFINITIONS

OF

SUBREGIONSECA

consists

of

the

following

subregions

and

countries:SubregionCountryorcountriesCentralAsiaCaucasusKazakhstan,

Kyrgyz

Republic,

Tajikistan,

Turkmenistan,

UzbekistanArmenia,

Azerbaijan,

GeorgiaEU4Bulgaria,

Croatia,

Poland,

RomaniaRussia,BelarusTürkiyeRussia,

BelarusTürkiyeUkraine,MoldovaWesternBalkansUkraine,

MoldovaAlbania,

Bosnia

and

Herzegovina,

Kosovo,

North

Macedonia,

Montenegro,

SerbiaACKNOWLEDGMENTSThe

World

Bank

ECA

Energy

Futures

team

worked

under

the

leadership

of

Anna

Bjerde,

Antonella

Bassani,Carolina

Sanchez-Paramo,

Charles

Joseph

Cormier,

Sudeshna

Ghosh

Banerjee,

Stephanie

Gil,

and

IvailoIzvorski.

The

World

Bank

ECA

Energy

Futures

core

team

included

Task

Team

Leader

Szilvia

Doczi

and

co-authors

Akos

Losz

(parts

1

and

2);

Amit

Kanudia

(appendix

1,

energy

system

model

developer);

Armin

Mayer(part

2);

Bobur

Khodjaev,

Humphrey

Fellow

(appendix

3);

Elcin

Akcura

(part

1

and

appendix

4);

Peter

Toth(part

2);

Raimund

Malischek

(parts

1

and

2

and

appendix

1);

Rocco

De

Miglio

(parts

1

and

2

and

appendix

1);and

Tarek

Keskes

(part

2

and

appendix

5).

Unless

otherwise

noted,

the

projected

years

in

tables,

graphs,and

charts

presented

herein

represent

results

of

an

original

model

conceived

by

the

authors,

while

thehistorical

data

are

sourced

from

the

International

Energy

Agency’s

2019

and

2020

Energy

Balances.The

report

benefited

from

World

Bank

peer

reviewer

comments

received

from

Alexander

Huurdeman,Ani

Balabanyan,

Maria

Vagliasindi,

and

Rafael

De

Sa

Ferreira

and

inputs

and

comments

from

WorldBank

subject

matter

experts

including

Zuzana

Dobrotkova

(renewables),

Jas

Singh

(energy

efficiency

andsustainable

heating),

David

Groves

and

Craig

Meisner

(climate),

Dolf

Jean

Gielen

(hydrogen

and

industry),Priyank

Lathwal

(hydrogen),

Adam

Brown

(renewables),

Claire

Nicholas

(power

sector),

Masami

Kojima(oil

and

gas),

Shomik

Raj

Mehndiratta

(transport),

Karla

Gonzalez

Carvajal

(transport),

Eduardo

EspitiaEcheverria

(transport),

Joao

Rampini

(transport),

and

Nicole

Frost,

Nick

Keyes,

Aaron

Korenewsky,

ZarinaNurmukhambetova

(communications).

World

Bank

energy

specialist

colleagues

Silvia

Martinez

Romero,Manuel

Berlengiero,

Stephan

Claude

Frederic

Garnier,

Claire

Nicolas,

Joern

Huenteler,

Katharina

Gassner,Claudio

Protano,

Maksud

Safarov,

Irina

Voitekhovitch,

Almudena

Mateos

Merino,

Chris

Trimble,

Yun

Wu,Tamara

Babayan,

Mariano

Gonzalez

Serrano,

Luiz

Gabriel

Sucrmont

Rodrigues

Simoes,

Hazuki

Terada,

andCelia

Rui

provided

regional

and

country

insights

on

hydro

and

nuclear

expansion,

electricity,

and

gas

cross-border

transmission

capacity

expansion

pathways,

and

energy

efficiency

potentials.The

ECA

Energy

Futures

report

benefited

from

invaluable

insights

and

peer

review

comments

fromits

Advisory

Committee

members:

Sauleh

Siddiqui,

Chief

Modeler

of

the

U.S.

Energy

InformationAdministration;

Tim

Gould,

Chief

Economist

of

the

International

Energy

Agency;

Tatiana

Mitrova,

ResearchFellow

at

Columbia

University’s

Center

on

Global

Energy

Policy;

and

Laszlo

Varro,

Vice

President,

GlobalBusiness

Environment

at

Shell.

The

report

benefited

from

comments,

interviews,

inputs,

and

insights

fromAraceli

Fernandez

Pales,

Apostolos

Petropoulos,

Brent

Wanner,

Craig

Hart,

Christophe

McGlade,

JeromeHilaire,

Jonathan

Coppel,

Paul

Hugues,

Peter

Zeniewski,

Simon

Bennett,

Stephanie

Bouckaert,

Uwe

Remme,and

Zoe

Hungerford

(International

Energy

Agency);

Luis

Janeiro

(International

Renewable

Energy

Agency);Douglas

Nordham

(Future

Energy

Leader,

GHD);

Francisco

Venturini;

and

Daniele

Andreoli

(Enel

X).The

team

would

like

to

thank

Demetrios

Papathanasiou

(Global

Director,

EEX),

Chandrasekar

Govindarajalu(Practice

Manager,

ESMAP),

and

Gabriela

Elizondo

Azuela

(Practice

Manager,

Latin

America

and

Caribbean;former

Practice

Manager,

ESMAP)

for

their

managerial

guidance

and

invaluable

support.Steven

B.

Kennedy

edited

the

report.Adil

Bekishev

designed

the

report.Photo

credits:Front

cover

has

been

designed

using

assets

from

F.All

images

remain

the

sole

property

of

their

source

and

may

not

be

used

for

any

purpose

without

writtenpermission

from

the

source.The

Energy

Sector

Management

Assistance

Program

(ESMAP)

is

a

partnership

between

the

World

Bankand

over20

partners

to

help

low-

and

middle-income

countries

reduce

poverty

and

boost

growth

throughsustainable

energy

solutions.

ESMAP’s

analytical

and

advisory

services

are

fully

integrated

within

the

WorldBank’s

country

financing

and

policy

dialogue

in

the

energy

sector.

Through

the

World

Bank,

ESMAP

worksto

accelerate

the

energy

transition

required

to

achieve

Sustainable

Development

Goal

7

(SDG7)

to

ensureaccess

to

affordable,

reliable,

sustainab

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