While the EU’s decarbonized system will be more resilient to hydroclimatic change than existing water-dependent portfolios, water availability and temperature are factors with potential negative impacts on the economy and the environment amidst transition to a carbon neutral electricity system. In this study we conduct a model-based analysis to assess the impacts of hydroclimatic change on EU decarbonization strategies in the Iberian Peninsula and the Danube river basin, both with a high share of water-dependent energy sources and vulnerable to climate change. We find that, under the reference electricity system scenario for 2040 aligned with the EU climate and energy strategies, generation from fossil fuels increases, in particular from combined cycle gas turbine plants, to balance the reduction of hydro generation consistently observed in the hydroclimatic scenarios examined. This reduction, in conjunction with increased thermal plants shutdown events due to high water temperature especially in the Iberian Peninsula, produces load cuts undermining the reliability of the electricity system. Moreover, increased fossil fuel use results in higher generation costs and carbon intensity, jeopardizing emissions reduction targets and ultimately slowing down the decarbonization process.
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