G7 Power Systems Scorecard
The new G7 Power Systems Scorecard assesses G7 countries’ efforts to decarbonise their power systems by 2035. The group adopted this commitment in 2021 and has re-confirmed it every year since.
France has one of the lowest fossil fuel shares and carbon intensities of the electricity mix, strengthened by an extensive set of policies promoting systems flexibility and energy efficiency. It shows commendable effort on demand side management, digitalisation, and the renovation of buildings. France also is a member of key international initiatives supporting power systems decarbonisation. However, the focus on its ageing nuclear fleet and permitting delays are major obstacles to the deployment of renewables, leading to 2030 renewables targets which are not in line with
Canada, with its significantly clean electricity grid and low-carbon capacity, is well positioned to further decarbonise its grid. Canada is on track to phase out coal fired generation by 2030, however, there is significant new unabated gas fired generation being proposed in some provinces.
The upcoming Clean Electricity Regulations, Canada’s goal of 90% non-emitting generation by 2030, Canada’s large emitter trading systems, and federal funding for clean energy investments are crucial for achieving a net zero grid by 2035. While some provinces are also taking action and have announced targets for adding renewable capacity, others such as Alberta have been taking steps that deter renewables deployment. Provinces reliant on gas fired generation in particular can benefit from the reliability and affordability of a decarbonised grid. They need to increase their renewable energy share, expand transmission, enhance storage, promote end use flexibility, and improve energy efficiency.
Germany scores relatively well across most indicators with an exception for ending fossil fuel dependencies. The latter is the result of historically high shares of coal in the power mix, a decision to phase out nuclear power before fossil power and, most importantly right now, a significant pipeline of new gas plants to provide back-up capacities when coal is phased out. Germany’s overall good score is thanks to strong recent growth of variable renewables, and adopted policies to ensure a continuous high growth rate of renewables, grid expansion, improving digitalisation, and investments in renovation. A strong showing in international leadership, together with several EU policies in the area of energy efficiency and standards, as well as the promotion of non-thermal flex under new EU power market rules, further strengthen Germany’s score.
The UK is not currently on track to have a net zero power system by 2035, but has good latent potential to achieve that target – and potentially even sooner. The country must continue to build out the full pipeline of potential offshore wind, and remove barriers to scaling onshore wind and solar. It must also focus on scaling low-carbon assets, such as demand side flexibility and long-duration storage, as well as removing barriers in the planning system and grid network. Commendably, the UK is set to entirely stop using coal in power generation – but does not yet have a clear plan to do the same with gas and is in fact building new stations. More focus on decarbonising buildings will also support the development of a low-cost, efficient net zero power system.
Under the Biden administration, the United States has seen a dramatic shift towards meeting international climate obligations and building its renewable energy capacity as it works to attain a carbon-free electricity sector by 2035. The Bipartisan Infrastructure Bill, the Inflation Reduction Act, and numerous executive actions have endowed the Department of Energy (DOE) and the Federal Energy Regulatory Commission (FERC) with new funds and certain new authorities respectively to accelerate the development of green energy technologies and their integration into America’s existing electrical grids.
The US is already championing some areas key to power systems decarbonisation. Among them are policies facilitating long-term storage ramp-up, and the Environmental Protection Agency’s (EPA) recently adopted regulations might prove to be among the first within the G7 towards facilitating a phase-out of both unabated coal and gas fired generation. However, the US is working from a very low renewables base and needs to address the poorly connected and ageing grids systems. The scope and speed of change needed within the next decade is so far not reflected in either the country’s renewable project pipeline or federal policy implementation on the state level in many states.
The Italian power sector is to this day heavily dependent on fossil resources, as more than 50% of electricity is generated by burning fossil gas, oil or coal. While there is a phase-out date for coal, at the latest in 2028, a phase-out plan for fossil gas is still missing. It strongly depends on the policy framework and in particular the way investments in renewables will be mobilised in the near future.
The recent energy crisis sheds a new light on the need to accelerate RES deployment. In its draft National Energy and Climate Plan (NECP), Italy committed to install additional RES capacity of about 70 GW. Although the 2030 goal for renewable energy share is aligned with the EU Green Deal, it is lower than that suggested by IEA to reach at least 80% electricity generated from low-carbon sources. In 2022 and 2023 Italy manged to increase its RES installation rate, which is getting closer to what is required to achieve the 2030 goal.
When it comes to the 2035 net zero power ambition, Italy needs to define a clear delivery roadmap to be adopted in national policies. Specifically, there is a lack of a strategy and specific actions for implementing flexibility technologies and developing a smarter power system. Gas still plays a disproportionate role in the country’s decarbonisation agenda – both domestically and in its diplomacy.
Although faring relatively well on energy efficiency, Japan currently has the highest share of fossil fuel-based generation of any G7 country. It also has the highest share of coal power as well as no coal phase-out date, so has a long way to go to decarbonise its power sector. Japan’s goal for renewable energy share in 2030 is also lower than that of most other G7 countries, falling short of reaching the IEA’s milestones of 60% renewable energy in the power mix by 2030. As such, the power sector is not adequately contributing to Japan’s emissions reduction targets. Research by Bloomberg NEF shows that Japan’s current emission reduction trajectory is not on track to meet its 2030 goal of 46% emissions reduction from 2013 levels, nor net zero by 2050.
Japan’s approach to the energy transition is fundamentally distinct to that of its G7 counterparts. Japanese officials promoted the concept of “various pathways toward a common goal” at their G7 Presidency in 2023, and are promoting these narratives to developing countries in Southeast Asia, spurred on by vested industry interests. Support schemes like those in the Asia Zero Emissions Community (AZEC) include financing fossil-based technologies; these might be perceived as impeding the regional transition away from fossil fuels.
The findings
The Scorecard shows that, except for Japan, all G7 countries are taking significant steps towards a decarbonised power sector. However, major delivery risks remain. Although these differ per country, some common themes emerge which require all G7 governments to take action:
- All G7 countries, except for Japan, are either committed to phasing out coal by 2030 or taking major steps towards this goal.
- No G7 country has clear policies and targets to phase out unabated gas in line with the G7 net zero power commitment.
- Most G7 countries rely too much on gas fired power generation, both for back-up capacity now and in future planning. This comes at the expense of non-thermal flexibility solutions, which need to be given higher political priority. The EU-based G7 countries in particular have an important framework to do so within newly reformed power market rules.
- Grid expansion is now high on the political agenda of all G7 countries. However, delivery needs to happen fast so that grids are an enabler, not a bottleneck, for faster RES deployment.
- G7 international leadership on power system decarbonisation is at risk from the lack of adequate finance being provided to emerging markets and developing countries. Credibility is further at risk from the disconnect between plans to reduce domestic gas demand in the long term, and a continued push to increase gas supply globally.
Country-specific findings
While the overall score for all G7 countries is either “insufficient” or “unacceptable” (Japan), there are clear differences between countries’ progress.
France and Canada are first and second on the Scorecard thanks to their ambitious policies supporting system flexibility, energy efficiency, and overall net zero power delivery. Their current power mix is also relatively low in emissions compared to their G7 peers, but more focus on renewables is needed to achieve the 2035 commitment.
Japan is in last place, well behind its global peers. It still has to start planning to phase out coal, has made insufficient progress on RES integration, and its international leadership is still too focused on promoting technologies that risk extending the lifespan of fossil assets.
Germany and the UK are in the middle of the pack. They have comprehensive and ambitious policies in some areas, and have already made significant progress on delivery – growing RES share from a much lower clean energy base than France and Canada – and providing international leadership.
The US and Italy scored significantly lower, due to a combination of still having a high share of fossil fuels in the power sector and insufficient policies in place to secure a timely transition.
Why track G7 countries’ progress towards a 2035 net zero power systems goal?
The G7 countries committed to reach “fully or predominantly decarbonised power systems by 2035”, the first iteration of the commitment agreed upon during the 2021 Climate and Environment Ministerial. With this commitment, the G7 are the first group of countries to aim for a milestone that the IEA has identified as mission critical to a 1.5 °C compatible pathway. All OECD countries will however need to achieve this goal, and it is now essential for G7 countries to demonstrate they are making progress in delivering on this commitment.
In tracking G7 countries’ progress towards reaching a net zero power systems target, this Scorecard aims to:
- Show the real steps undertaken by the G7 to decarbonise their electricity systems and adapt them to higher shares of variable renewable energy. This enables us to understand which countries and which policy and governance areas require more action. G7 countries have about ten years left to reach net zero power systems – a very short timeframe, given that it takes time to adjust policy frameworks, build a skilled workforce to drive the delivery, and deploy the infrastructure on the ground. Keeping track of the key policy and financial decisions, and the effect they have on the power systems themselves, is key to understanding whether the current pace of change is sufficient.
- Provide lessons learned from the G7 countries on power systems decarbonisation. These are useful for other OECD countries, which also need to aim for 2035 net zero power systems, and for the rest of the world, which needs to reach net zero power systems by 2045 at the latest to be on track for climate neutrality by mid-century or shortly thereafter.
Acknowledgements
The main contributors to this Scorecard (in alphabetical order) were Francesca Andreolli (Italy; Senior Researcher, Energy and Buildings, ECCO Climate), Griffen Ballenger (independent consultant, US), Ysanne Choksey (Germany), Susanna Elks (UK), Michele Governatori (Italy; Power and Gas, ECCO Climate), Hanna Hakko (Japan), Charlotte Liebrecht (France), Yoko Mulholland (Japan), Maria Pastukhova (US, methodology, project oversight), Pieter de Pous (Germany, methodology, project oversight), Juliet Phillips (UK), Oyku Senlen Gundogan (data), Karambir Singh (Canada; Researcher, Pembina Institute), Scott MacDougall (Canada; Director, Electricity Programme, Pembina Institute).
Hannah Blitzer (Wildlife and Countryside Link) and Rebekka Popp (Klimawirtschaft) contributed to the early draft of the Scorecard while at E3G.
Valuable comments and feedback have been provided by Ed Matthew, Shane Tomlinson, Leo Roberts, Camilla Fenning, Clarence Edwards, Max Gruenig, Alden Meyer, Larissa Gross, Simon Skillings, Luca Bergamaschi (ECCO Climate), Binnu Jeyakumar (PPCA; Powering Past Coal Alliance), Akihisa Kuriyama (IGES; Institute for Global Environmental Strategies), Rena Kuwahata (IEA; International Energy Agency), Yuri Okubo (REI; Renewable Energy Institute), Andreas Rüdinger (IDDRI; Institut du Développement durable et des Relations Internationales), Federico Tassan-Viol (ECCO Climate)