A new study commissioned by Eurelectric has revealed that the European Commission’s (EC) proposal to limit the emission of carbon dioxide from new power plants could bring economic and systemic consequences towards the clean energy transition.

The EC has proposed to set an emissions limit of 550g/kWh of carbon dioxide for new power stations, reported Reuters.

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According to the new study conducted by Compass-Lexecon, this proposal could lead to additional costs for the power sector of around €50bn between 2020 and 2040.

The costs represent €30/ton on top of the EU emissions trading system (EU ETS) requirements, which already sets an emissions limit.

Eurelectric secretary general Kristian Ruby said: “Utilities across Europe are investing billions in renewables and other transition-critical solutions.

"The costs represent €30/ton on top of the EU emissions trading system (EU ETS) requirements, which already sets an emissions limit."

“If this rule is applied to existing assets, it will divert investments and do a disservice to Europe’s efforts in delivering the clean energy transition.”

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Eurelectric’s new study has also found that employing the 550g rule could force almost all the thermal power plants in Europe to opt for early retirement.

In addition, the study found that replacing coal-based assets with gas-based power facilities is set to increase the rate of gas consumption by 40% between 2020 and 2040 with a major impact in Eastern Europe.

Investment in new power generation assets is further expected to divert around €20bn of investments away from renewables and other clean energy transition technologies, according to the study.