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EDF: EU Climate Law is clear signal to invest in clean energy

The proposal from the European Commission for a European Climate Law means all companies must put decarbonisation at the heart of their business strategies, says Alexandre Perra, member of the board of French utility EDF

Leading by example will allow Europe to engage other countries in ambitious decarbonisation pathways

Plans for a European Climate Law, enshrining into hard legislation the objective set out in the European Green Deal of the continent becoming climate neutral by 2050, were published by the European Commission, the EUs executive body, on March 4, 2020. Alexandre Perra, member of the board of French utility EDF, says he is confident Europe can achieve its ambitious climate goals, but insists renewables and energy efficiency alone will not be enough. Perra sticks to his company’s historic line that nuclear has a role to play in decarbonising Europe. The European Renewable Energies Federation, an industry group, criticised the Commission for missing the opportunity to clearly define climate neutrality as 100% renewables and 100% energy efficiency” in its Climate Law proposal. But despite significant cost concerns, Perra suggests nuclear can help produce green” hydrogen, touted by many as a solution to decarbonise heavy transportation and some industrial processes.

Alexandre Perra, member of the board of French utility EDF

Q: What do the European Green Deal and the proposed Climate Law mean for EDF?
A:
The Green Deal and the Climate Law are tremendous opportunities for Europe and companies. EDF welcomes the decision to put forward a net zero objective in such a strong way, which makes reducing carbon dioxide a clear compass for European and national policies.The target of climate neutrality by 2050 offers predictability and makes a cost effective clean energy transition possible. It means companies have to put decarbonisation at the heart of their strategies, as we are already doing at EDF.Together, the Green Deal and the Climate Law are a clear signal to innovate and invest in clean technologies.

Q: Is EDF on track to become a carbon neutral company?
A:
EDF is in a good position to achieve net zero emissions by 2050. We have a strong track record and want to go even further. Our strategy is focused on four strands. First, we want to have a 30% share of the photovoltaic (PV) market in France by 2035 by adding one gigawatt (GW) a year of PV on average from 2020 to 2028. Our current project portfolio in France is about 1 GW. Secondly, we plan to add 10 GW of new storage capacity worldwide by 2035 in the form of batteries and pumped-hydro storage. Thirdly, we want to be Europe’s leading e-mobility power supplier by 2022 in the group’s four major markets, namely France, the UK, Italy and Belgium, with a 30% share of the market and 75,000 charging stations. Fourthly, we are investing in clean hydrogen produced from low carbon electricity.

Q: Where does nuclear fit into all this?
A:
Nuclear and renewables are the two legs of our carbon-free strategy. Fatih Birol, executive director of the International Energy Agency, recently said nuclear is one of the low carbon technologies available to tackle climate change. At EDF, we are not for renewables or nuclear, we bet on them both as they both have good qualities. In 2019, nuclear provided 25% of electricity production in Europe and has provided 50% of the carbon-free electricity produced at a European scale. It is important to keep this online and build new assets. France’s national energy law plans an electricity mix coming from 50% nuclear power and 50% renewable energies by 2035. We believe this is a balanced approach. We have a challenge to keep nuclear competitive in the long term, but it can be achieved by reducing construction and financing costs. Increasing competitiveness is a key aspect of our EPR2 project”, aimed at creating a new means of nuclear production by 2030. Under this project, competitiveness will be taken into consideration from the design phase and new tools will be employed to increase the efficiency of our engineering teams. Two of the projects goals are to reduce the fuel consumption of reactors by 17% and reduce the amount of radioactive waste produced by 30%. We believe renewables and demand side management are key to decarbonise the economy and keep the lights on, but we also do not believe that EU climate targets are achievable without nuclear power.

Q: Do you see hydrogen as a decarbonisation solution?
A:
Most hydrogen today is grey, produced from natural gas via a steam methane reforming process which emits carbon dioxide. Low carbon hydrogen, produced from water via renewable-powered electrolysis and low carbon electricity, is often held up as a decarbonisation silver bullet, but for many market segments, hydrogen is not yet competitive and requires heavy subsidies. We believe hydrogen has a role to play in decarbonising fossil-fuel powered industries and heavy transportation. We recently created a subsidiary known as Hynamics, which will focus on investing in low-carbon hydrogen production assets and commercialising them for industrial customers. We have also invested more than €17 million in McPhy, a French electrolysis and hydrogen refilling station manufacturer. McPhy was recently selected to equip a 20 megawatt hydrogen production platform in the Netherlands, which will be the largest electrolysis plant for zero-carbon hydrogen production in Europe.

Q: Are you also looking at digital solutions to reduce emissions?
A:
We use artificial intelligence (AI) to reduce carbon emissions from industrial processes and help customers save money. On the production side, one such solution is our Metroscope tool that predicts production hazards, which can then be dealt with before they become actual faults. On the supply side, we provide advice to our customers through an IA-based platform — a customer who connects to this platform on a regular basis can reduce consumption costs by 12%.

Q: What needs to happen now to achieve EU climate goals?
A:
We need to keep focused on the need to reduce carbon emissions and on the objective of carbon neutrality. Fighting carbon dioxide emissions must be our common compass and must prevail in the way the EU regulates. It is a massive undertaking to reduce EU greenhouse gas emissions by 55% by 2030, as proposed in the European Green Deal. But if the EU puts in place regulations that lead to predictability, including a meaningful and stable CO2 price under the Emissions Trading stem, countries and companies will go for it. Europe cannot do the work alone, but leading by example will allow it to engage other countries in ambitious decarbonisation pathways.

By: Philippa Nuttall Jones