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As the ongoing international negotiations on climate change are getting closer to their decisive stage (UNFCCC Conference of Parties 21 in 2015), it is becoming increasingly likely that for the first time in over 20 years of UN negotiations, all the nations of the world will be bound by a universal agreement on climate, containing commitments for the post-2020 period that are applicable to all countries, developed and developing alike. Therefore, an adequate knowledge body generated through complex energy modeling and scenario analysis would be indispensable for developing countries as well, to set their mitigation contributions reflective of the national circumstances and, at the same time, being widely perceived as equitable and fair, and collectively sufficient to keep global temperature increase below 2°C. The main goal of this paper is to showcase such a modeling exercise, conducted for the Republic of Macedonia, a non-Annex I country under UNFCCC and candidate for EU membership, by making use of MARKAL energy system model. Baseline scenario and three groups of mitigation scenarios have been developed until 2050, reflecting different levels of ambition regarding CO2 emissions reduction: (1) EU scenarios - end-year type mitigation targets imposing 20-40% reductions in 2030 and 40-80% reductions in 2050 compared to 1990 level as the base ; (2) Quantified Emission Limitation of Reduction Commitment (QELRC) scenarios - a wide range of cumulative targets for 2021-28, ranging from -20% to +20% relative to 1990 level and, for each subsequent 8-year budget period, the targets are reduced for 10 percentage points ; and (3) Baseline deviation scenarios - deviation compared to baseline emission level of -10% to -20% for 2020 , -15% to -30% for 2028 and -30% to -60% for 2050. When developing mitigation scenarios, ever-increasing carbon price is introduced beyond 2020. The outputs of this extensive modeling work include final energy consumption by fuel, installed capacity of power plants, electricity generation and import, primary energy supply, CO2 emissions and total discounted system costs (cumulative over period 2011 – 2050), calculated for the baseline scenario and all mitigation scenarios. The comparative assessment of mitigation scenarios, based on the cumulative emissions, cumulative total system costs and incremental specific reduction cost, has shown that the best performing is the QELRC mitigation scenario of medium level of ambition. This scenario is recommended to be taken as a basis for setting the national mitigation contributions and should be further used to formulate the most appropriate national mitigation action plan.

On its way towards carbon free power sector in 2050, the European Union (EU) is pondering 2030 ambition level for greenhouse gases (GHG) emissions reduction and how to support the progress towards a competitive economy and a secure energy system. Hence, a new reduction target for GHG emissions of 40% compared to 1990 levels has been recently proposed, to be shared between the Emission Trading Scheme (ETS) and non-ETS sectors, as the center piece of the EU energy and climate policy for 2030. The aim of this paper is to analyze the possible implementation of the EU 2030 climate target in an EU candidate country, by making use of MARKAL energy system model. Hence, a group of mitigation scenarios labeled as “EU scenarios” were developed for the Republic of Macedonia, in line with the EU relatively ambitious path towards emissions reduction that impose an end-year type target (for the years 2030, 2040 and 2050) compared to 1990 emissions, reflecting three different levels of ambition – low, medium and high. Specifically, it was assumed that the Republic of Macedonia may have to reduce the emissions for 20-40% in 2030 and 40-80% in 2050 compared to 1990 level as the base. In all mitigation scenarios, ever-increasing carbon price is introduced beyond 2020. The results have shown that the imposed targets can be realized in Macedonian conditions. The power sector is the most important area for mitigation action, implemented through coal to gas switch, as the revitalization of the existing and investment in new coal power plants is not cost-effective mainly due to the CO2 prices, and intensified development of hydro and some wind and solar power. However, higher ambition targets might challenge the security of supply, since after 2032 the electricity import considerably increases and fully replaces the gas-fired electricity by 2050. Total cumulative investment in new power generation capacities varies between 4083 – 5500 € million, while the additional investments in distribution losses reduction, new power transmission and distribution networks and new natural gas pipeline are in the range of 366 to 840 € million.