Current policies around the energy transition place emphasis on the democratisation of power generation and the rise of prosumers. But while the energy system of the future may be decarbonised and digital, it will also be less decentralised than we envisage, say Thomas Boermans and Michael Stautz of E.ON
The views expressed are those of the author and do not necessarily reflect the position of FORESIGHT Climate & Energy
The old energy world ran mostly on fossil fuels—coal, oil and natural gas—with a centralised structure. The paradigms for its design were to achieve a reliable energy supply with a regulated approach. The main actors were large companies running large, centralised assets and grids. This world will soon belong to the past.
What is considered the “new energy world” has, since the early 2000s, been widely acknowledged as a decarbonised, digital and decentralised energy system. Its key paradigms so far have been to develop a sustainable, reliable and affordable system with a market-driven, technology-neutral approach that fosters innovation.
The main actors in this pretty picture were to be private customers, to place “citizens at core” as the European Commission phrased it, running small, decentralised assets and realising efficiency improvements.
Energy companies were to play an important role in providing the backbone through utility-scale assets and grids. This view was alluring and meaningful—at that time. But what happens when the realisation of this new energy world just takes too long?
Administrative hurdles for grid upgrades are high, rooftop PV is developing slowly, the renovation of buildings is not picking up and cities are stuck in discussions on how to develop their energy infrastructures around electricity, gas or district heat.
The list is long. The 2050 climate target seems far away, but with energy infrastructure lifetimes of around 30 years, we need to build the new energy world from tomorrow.
In addition, the war in the Ukraine and surrounding geopolitical tensions are increasing the pressure to increase independence from fossil fuel imports. The debate now must move from “how can we optimise the energy transition?” to “how can we move fast enough?”
So, what options do we have to increase the speed of the transition? We can go down the path of more restrictions and regulations: banning natural gas boilers or limiting opposition to infrastructure developments such as wind power projects or new overhead power lines.
A recent study showed most of the younger generations in Germany see sustainability as crucial, but only a minority is ready to give up near-term on comfort for the sake of the climate. On this point they do not differ from older generations. This means climate protection will not come automatically via generational shift. It needs guardrails.
The success of green parties in favouring stronger regulations. The German election at the end of 2021 points to an increasing acceptance of such rules. We can also give up on the prosumer focus and shift the balance more towards large-scale generators.
Analysis shows that a more centralised approach—compared to an only small-scale and private customer-driven approach—has the potential to be faster, cheaper and more convenient for customers.
At the same time, not all citizens are enthusiastic about their own involvement or investments in the energy transition, while there is increasing interest in large companies doing the job.
Not going down such route is likely to increase pressure later to adopt controversial solutions, such as large-scale carbon capture and storage or nuclear power. There, we see discussion around potential risks—that stored carbon would escape at a later stage or that there are hazards in nuclear operation and storage of waste over many generations.
In this future energy world, the need for speed in decarbonisation and in securing a resilient supply is everything. Paradigms must develop quickly, with no time for trial and error anymore.
As for the actors, operators of utility-scale energy assets and grids must take centre stage to develop, together with regulators and in swift, coordinated approaches, new infrastructure for the future energy world.
Consumers can retain the possibility of being prosumers, with customer-centric solutions that add to the sustainability and resilience of the system, but don’t have to lead the transition if they do not want to. Moving towards a more “industrialised” transition is not completely new—and has already started.
While holding firm on the target of a sustainable, affordable and resilient energy system, the realities we are facing require us to constantly challenge our manner of progress. •
This opinion piece was originally published in the first edition of FORESIGHT Digest, a new magazine collaboration between E.ON and FORESIGHT Media Group. FORESIGHT Digest combines the best of FORESIGHT Climate & Energy’s in-depth journalism with original content and analysis from E.ON. You can read the rest of the issue here.
If you have a thoughtful response to the opinions expressed here or if you have an idea for a thought leadership article regarding an aspect of the global energy transition, please send a short pitch of 200 words outlining your thoughts and credentials to: firstname.lastname@example.org.
The ups and downs in demand for electricity have long made the flexible operation of power systems a must, so increasing that flexibility to also accommodate variations in supply from renewables is not that big a challenge. Having a clear definition of the term can only help the energy transition
Revolution is a big word, but it is appropriate to describe what digitalisation will do for district energy in the years to come, says Anton Koller, Head of District Energy at Danfoss. It will make it more sustainable, more customer friendly and more competitive than ever — but we need to embrace and lead the change
Without a European grid up to the task of not only meeting more demand for electricity, but also assimilating it from distributed renewables, green electrification of heating and transport is stymied from the start. Decarbonisation requires new infrastructure, yet the public is having none of it.
The rise of distributed energy sources means finding new ways to operate the grid systems. Digital products are set to play a role in solving the issues, says Matthias Rebellius of Siemens Smart Infrastructure
Work to increase the energy performance of Europe’s building stock remains sluggish, despite long standing political commitments and the launch of the EU’s Renovation Wave initiative in late 2020. Thomas Boermans, from German energy supply company E.ON, believes considering building renovation as an infrastructure project could help accelerate the movement
Five years ago, technologists excitedly started suggesting how to use blockchain for energy applications and a raft of start-ups followed, sporting distributed ledgers for the power sector. Today, the word "blockchain" is seldom heard in energy circles. While the hype may have been overblown, work continues instead on a quieter revolution to the one that was promised
Municipal electricity utilities have a long history in Europe, with more emerging as cities look to lead the energy transition. The model has obvious advantages but has also suffered setbacks in some markets. In an increasingly competitive landscape, using the benefits of private partners may be the way forward
The energy transition is not simply a matter of replacing fossil fuels with zero-carbon alternatives. It will also be marked by a radical change in our relationship with energy and the spread of technologies like heat pumps and electric vehicles that can yield significant efficiency gains even before traditional energy savings measures come into play