The electricity sector has come a long way since many of the rules that govern it were written. Distributed energy resources, battery storage and electric vehicles had not yet appeared on the scene when the regulations and frameworks that dictate how power is produced, transmitted and consumed were put in place.
The rules were also designed with the sole aim of ensuring security of supply in a way that also guaranteed a profit for generators, with the need to slash greenhouse gas emissions an afterthought at best.
There have, of course, been tweaks made here and there as new technologies emerged and made inroads into the energy mix, but the rulebook has ultimately become outdated. It no longer reflects the needs of the 21st Century's energy landscape nor the vision for a decarbonised economy by 2050.
Russia’s invasion of Ukraine in early 2022 put Europe’s lawmakers on high alert and sparked talk of a significant overhaul of the rules and regulations as energy prices spiked.
However, major market changes such as those touted tend to spook investors. Any considerable upheaval could delay the energy transition while those who hold the purse strings figure out the best place to put their money. Therefore, little tweaks to the market design will instead help the market make business plans for zero-carbon energy sources.
And the markets can be powerful when the stars align. The significant cost reduction of renewables through technology advancements and effective regulation is a testament to that. The sharp rise in power prices seen in the wake of Russia’s invasion of Ukraine has made clear the need to incentivise cheaper and cleaner green energy. ...
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There are many opportunities afforded by transitioning to a low-carbon economy, which will only diminish the longer they are left unexploited. The whole sector needs to be more ambitious in its targets, bolder in its risk-taking and more courageous in its actions
The energy transition is about more than switching power carriers. Replacing fossil fuels with renewable forms of energy generation is perhaps the most significant change the world will make in its attempts to avoid the catastrophic effects of climate change. Still, it is not as simple as a straight swap. It requires a complete overhaul of how we live and interact with our world. This is where energy efficiency and the efficient use of energy comes in
A clear message that emerges in our 13th print issue of FORESIGHT Climate & Energy is that every country’s—or every city’s—carbon reduction strategies will be different, driven by different starting points, different cultures, different challenges, different raw commodities and different major emitters to abate. Whatever the strategy, common to all regions is that a successful transition will take multiple, highly coordinated actions