Opinion - 22/September/2020

Figures do not lie: electricity speeds up on decarbonisation

Europe’s electricity industry is decarbonising at an increasing pace, with the rise of renewables and drop in coal-based power generation. But progress on the ground will be bigger once the remaining barriers are removed, argues Eurelectric’s Kristian Ruby

The views expressed are those of the author and do not necessarily reflect the position of FORESIGHT Climate & Energy


Power sector progress must spread to electrification of transport and buildings

The fallout from the coronavirus pandemic has not eclipsed our decarbonisation commitments. This year so far, 66% of Europe’s electricity was generated by renewable and nuclear sources, almost 20 percentage points higher than a decade ago. Within the same timeframe, reliance on fossil fuels diminished, cutting the CO2 intensity of electricity by 23%.

Are this year’s figures a trend or an exception? For sure, the first half of 2020 was special. Weather conditions reduced the need for heating and were very favourable to renewable production. And the economic slump, triggered by the coronavirus crisis, also dampened energy demand, which in turn increased the pressure on fossil fueled electricity production due to their higher marginal costs.

But the phase out of fossil-fueled capacity is real and will continue, as will the rising share of renewables. By 2030, as much as 80% of the EU’s electricity could be fossil-free, if the barriers for further deployment are removed. Moreover, two thirds of the coal-fired capacities will be closed by then with 21 European countries already committed to shutting down their coal-based power plants by the end of this decade.

If we increase the pace of wind and solar installations we will not only meet the current 2030 renewables and CO2 emissions reduction targets, but we could go even further.

 

 

Renewable energy technologies have become the most cost-effective form of new generation capacity, but their deployment still faces headwind. Simplifying the permitting procedures, strengthening the distribution grids and increasing public acceptance for new projects are three key issues that must be tackled.

Moreover, with higher targets for cutting the carbon dioxide emissions, comes a greater need to establish measures that alleviate the impact of climate policies on vulnerable populations. The €17.5 billion under the EU’s Just Transition Fund is a good start to help create business opportunities and enable those active in the exposed sectors to move towards a net-zero emissions economy. But the headline figure should increase and be followed up in future EU budgets. Measures to cushion negative distributional effects for individual households should be considered as well.

The nexus between electrification and carbon neutrality is now stronger than ever. As a result of a continuous and solid decarbonisation effort by the power sector, electricity is now an efficient solution to cut emissions from carbon intensive sectors, such as industry, buildings and transport. While their potential for electrification is huge, a steady path towards climate neutrality requires an extra effort.

 

DOUBLE DOWN ON TRANSPORT

Around 28% of the transport sector should be electrified by 2030 to steer the wheel towards a deep decarbonisation.

When it comes to passenger cars, recent industry figures reveal that the sales of battery electric vehicles and plug-in hybrids are ramping up. This year, they have accounted for 16.5% of the market shares, registering a 57% growth. But in order to reach the targets, the figures must see an even steeper incline. One way to bring this transformation forward, and reduce the harmful exhaust fumes emitted by road transport, is the electrification of vehicle fleets owned by private companies and public authorities.

Recent innovations and emerging technologies demonstrate that clean electricity could play a key role in decarbonising the maritime sector, via direct or indirect electrification.

In some countries already, electric ferries and boats are being introduced for short distance transports, thanks to the numerous innovations that have turned batteries into cheaper and better alternatives. For long-haul shipping, however, where direct electrification is not yet the solution, renewable-based hydrogen could be used for the production of novel maritime fuels, such as ammonia.

 

 

UNLOCKING BUILDINGS

Today, Europe’s buildings consume 40% of all the energy used across the continent, with heating and cooling representing half of this demand. As heat is mostly generated by burning fossil fuels, the building sector is responsible for 36% of EU’s overall CO2 emissions. But this can change.

Green, digital and cost-efficient technologies, such as heat pumps, are three-to-five-times more energy efficient than traditional fossil-fueled boilers. On top of that, they have lower running and maintenance costs for consumers. Moreover, even higher benefits can be achieved in combination with solar panels, batteries and integrated energy management systems, in well insulated buildings.

Through the upcoming Renovation Wave, the EU has a great opportunity to bridge the power and thermal needs by removing the barriers to energy efficient and low carbon solutions. This transformation would cut the energy demand, and subsequent costs, thus improving citizens’ standard of living.

Beyond prioritising the electrification of heating and cooling, the Renovation Wave should seize the opportunity to turn our homes and work spaces into energy efficient, smart buildings that can dynamically interact with the power system. But smarter buildings need to interact with smarter grids, and therefore this transformation needs to happen in parallel.

Moreover, we need to look into the synergies between buildings and transport. Around 40 million electric vehicles should drive on Europe’s roads by the end of this decade. As 90% of their charging takes place at home or at the workplace, it is critical to accelerate the deployment of smart-charging infrastructure in residential and commercial estates.

The ambition to build a greener economy should not be eclipsed by the fallout from the coronavirus pandemic. On the contrary; we must seize this opportunity to invest in a greener and more sustainable European economy.


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