Climate change. Russian invasion of Ukraine. Energy security at risk. Customers feeling the pinch of high fossil fuel prices. The pressure to decarbonise Europe and become energy independent is mounting. What future for the power sector envisage top industry CEOs?
Russia’s invasion of Ukraine has opened the door to a new geopolitical energy order. Europe is now moving decisively against fossil fuel imports, aiming to replace two-thirds of Russian gas imports by the end of this year.
Beyond any doubt, the urgency of climate change and the war in Ukraine bring electricity center stage of Europe’s future. And they both call for decisive action towards electrification of key sectors of the economy. Fast – and faster than before. But, are Europe’s energy security and climate action goals finally aligning?
Discover the key messages coveyed by leading industry CEOs at the closing session of Eurelectric’s Power Summit 2022.
Clean energy: raise the game on clean and renewable power generation
The energy transition is accelerating. With the tighter renewable energy targets for 2030 on the horizon, over 1200 GW of green energy are expected to power Europe’s energy needs by the end of the decade. Yet, transformative efforts at a scale that has never been attempted before are needed to raise the game in the race to clean energy and a net-zero future.
Regarding this topic, Kristian Ruby, Secretary General of Eurelectric said:
“To get there, we need to change all those things that are keeping the pace of transformation completely away from the level at which it is supposed to happen.”
Further on, Miguel Stilwell de Andrade, CEO of EDP said:
“We have the targets. We have the roadmap. We have the capital. What we need is to accelerate and execute.”
Electrification: electrify everything that can be electrified
The benefits of electrification are manyfold. It supports Europe’s transition to net-zero and its energy independence endeavours. It is an energy efficient alternative to the use of fossil fuels in transport, buildings and industry.
In sectors where direct electrification is not yet a feasible option, indirect electrification can enable the transition to net-zero.
Hando Sutter, CEO of Enefit said:
“Electricity storage is an existential need. Green power generated hydrogen looks like an option, but the problem is how we use it. Industry can convert electricity into clean hydrogen, but it needs incentives.”
Strengthen the backbone of the transition: electricity distribution grids
Europe’s distribution grids are the backbone of the digital and energy transition. They connect the dots by integrating the majority of renewables, enabling the creation of new services for consumers, and ensuring a reliable electricity flow.
But war and climate change are not sparing the grids. On the contrary, they raise the pressure on the need to make critical infrastructure more resilient and secure.
Maxim Timchenko, the CEO of the biggest Ukrainian utility, DTEK said:
“I wish no one to have to be prepared for war-time resilience.”
He further highlighted three elements that were instrumental in ensuring the resilience of the Ukrainian power sector. “First, professionals working in decentralised energy systems are very important. Second important point, is the decentralisation of generation. The third one: interconnection.”
Secure signals, secure investment market design
As customers started to feel the crunch from increased energy prices, several EU countries have introduced drastic short term market interventions. Needless to say, addressing this unprecedented situation involves difficult energy policy choices. But, guarding investors’ confidence is crucial.
Distortive ad-hoc wholesale market intervention, like measures related to “windfall profits” or the introduction of price caps, risks jeopardising trust in the EU integrated energy market and severely damage the investment climate.
Speaking about the recent market interventions, Catherine MacGregor, CEO of ENGIE highlighted:
“It’s important to have one market, one rule for everyone.”
Investments in clean energy are a must to help Europe wean itself off imported fossil fuels. They are the key for a carbon-neutral, energy independent Europe.