The project
Enerdata – in partnership with Compass Lexecon and Solagro – was selected by SNCF, the French national railway company, to develop long-term energy price projections supporting its decarbonisation strategy.
The study encompassed all energies and new key drivers, from oil products and natural gas to electricity, bioenergy, and hydrogen. The projections covered global oil and gas markets, the European power market, and French bioenergy. A focus was placed on energy prices for end-users, through a breakdown of all components.
Strategic stakes
As a key transport player, SNCF aims to pioneer the transition to low-carbon mobility. In line with the energy and climate targets of the Paris Agreement, the group is set to reduce CO2 emissions in both its transport and real estate activities.
To this end, SNCF has been researching carbon abatement costs and internal carbon pricing for its operations, thus the group needed solid energy price projections, subject to three objectives.
The first objective was to harmonise trajectory hypotheses within the SNCF group, providing a consistent framework for the use of energy and climate scenarios across all departments.
The second objective was to develop SNCF’s understanding of energy price projections.
The third objective was to understand the development of energy taxation and end user prices for the main sources used by SNCF.
- Enerdata contributed its expertise in advanced energy modelling tools to develop customised price projections for SNCF, with a focus on fossil fuel prices. Our EnerFuture scenarios, with their global coverage of all energies, served as a reference for the study. Based on the POLES-Enerdata model, they offer prospective outlooks on long-term energy systems, including supply/demand balances and price evolutions.
- Enerdata’s proficiency with Marginal Abatement Cost Curves, along with our Key Energy Intelligence on worldwide policies and regulations, supported the analysis of current and future CO2 taxation and its impact on SNCF’s activities.
- Enerdata’s commitment to close client relationships and quality training underlaid the execution of cooperative workshops with teams from SNCF, Compass Lexecon and Solagro.
- Enerdata, with its experience in consortium leadership and cooperation, efficiently orchestrated the project in partnership with Compass Lexecon and Solagro.
- Contextualisation and definition of energy and climate scenarios, through cooperative workshops
- Presentation of the role, methods, and limits of energy and climate scenarios
- Comparative review and critical analysis of existing scenarios
- Definition of customised scenarios and hypotheses to produce price trajectories for SNCF
- Harmonisation between the views of different contributors
- Production of long-term energy prices projections for SNCF, based on customised scenarios
- Development of market price projections for energy commodities
- Projections for fossil fuel prices, relying on our POLES-Enerdata model
- Projections for electricity and hydrogen prices, down to hourly granularity
- Development of end-user price projections for all energies, including taxation
- Breakdown of end-user energy price components
- Review of energy policies, with calculations on the cost of support intervention
- Exploration of CO2 taxation hypotheses, comparison of different tax levels
- Development of market price projections for energy commodities
- Workshop series
- Joint sessions between SNCF teams and experts from Enerdata, Compass Lexecon, and Solagro
- Presentation of energy price drivers and long-term energy and climate outlooks
- Construction of a common, shared vision of energy prices among SNCF departments
- Long-term energy price projections
- Projections based on forecasting scenarios customised to SNCF’s strategy and activities, partly relying on our POLES-Enerdata model
- Results visualisation tool, transferred to SNCF
- Analysis report
- Presentation of workshop outcomes, scenario definitions, results of trajectories for energy market and end-user prices, and key takeaways
Figure 1: Brent price (2010-2050)
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