Electrification is the most critical enabler of decarbonisation and the single biggest opportunity of this decade.
Climate change has set a hard deadline for transformation and we welcome the European Commission’s current target for a net emissions reduction of 55% by 2030.
Establishing clear decarbonisation targets for 2030 is fundamental to setting the trajectory for the future. But an “Electrification Strategy” is urgently needed to pull forward changes at the scale required.
As the EU develops the “Fit for 55” package, electricity and its multiple uses and benefits must be a priority. The power sector will have a new role for end-users – electricity companies will deliver low-carbon solutions, whether that is for transport, heating, industrial processes or for consumers in their homes.
An electrification strategy would offer even more than decarbonisation. It would increase energy security, with less need for imported energy, and health benefits alongside the reduction in fossil fuel use.
It would foster new opportunities for the workforce. Navigating the energy transition will require electricity companies to develop experts who want to use build their digital skills to solve the complex challenges ahead and have a positive impact on the environment. A decade of accelerated electrification will create a workforce with new skills and new opportunities.
It would also help foster a new industry in hydrogen from electrolysis, which offers new pathways for indirect electrification of hard-to-decarbonise sectors of the economy.
We are at a critical inflection point in the energy transition, where the societal demand for climate action is unprecedented. At the same time consumers, businesses, and governments all want a reliable, affordable supply of electricity. And more
Residential customers want better experiences from service providers that reflect their values and lifestyles, and that includes electric mobility. This will change the game in this decade.
It will be imperative to embrace the full range of electric technology options and scale the deployment. At this point in the transition, the real innovation challenge is not in new ideas or technology. Many of the solutions already exist – what matters is bringing them to scale as quickly as possible and with the help of the larger players.
Electricity companies will play a central role as demand evolves: producing and delivering the net-zero energy and services that clients want and orchestrating the cross-industry ecosystems that will deliver the energy transition.
Electricity companies will be challenged to reposition themselves and become the trusted partner for net-zero consumers.
Europe’s electricity companies have the capabilities and assets to achieve this. But being strategic is key for a successful, well-coordinated clean energy transition. Therefore, we call on the Commission to move forward and devise an all-encompassing Electrification Strategy in the context of the Fit for 55 discussions.
This Electrification Strategy should:
- Have an overarching objective to maximise the benefits of electrification, especially for end-use sectors.
- Address the barriers to electrification and maximise synergies between policy tools and between different energy sectors.
- Take into account the structure of the power sector: infrastructure operators, generators and retailers, prosumers, and flexibility providers.
- Make sure that policies in and beyond ‘the Fit for 55’ Package are compatible with our ambitions.
Eurelectric firmly believes that such a strategy would be essential to maximising cost-effective and timely deployment of efficient electric solutions, powered by clean and renewable electricity. Getting each policy item on track is a necessity.
But it is even more critical to do so in a holistic manner – as an overarching, strategic, legislative approach for effective and timely deployment.
We have identified 5 key policy pillars which should be part of a European electrification strategy and may require legislation to deliver the electrification that is needed this decade. They are:
- Act across the system to make decarbonisation more efficient: prioritise direct electrification to drive decarbonisation and aim for indirect electrification, using hydrogen, where direct electrification is not feasible.
- Help end-users to electrify: Streamline building policies to make sure that heating and cooling are compatible with the ‘Fit for 55’ ambitions and that barriers to electrification are addressed. Review transport legislation to give the right signals to all sectors to go electric. Facilitate decarbonisation of industry through direct and indirect electrification.
- Empower customers: Establish a level playing field for electricity and end discriminatory taxation which disincentives the shift to fossil-free alternatives, allowing customers to become genuine change drivers.
- Improve infrastructure: Ensure buildings have the necessary infrastructure electric vehicle charging and unlock investments in distribution grids.
- Modernise the power system: Improve the permitting procedures for new capacity to meet growing demand and enable flexibility from electrified sectors to optimise the energy system.
Organisations who seize the opportunity of electrification in this decade will be transformed and be fit for the following decades. To give them the tools to do this, we believe the Fit for 55 package should have an Electrification Strategy at its heart.
This decade is make-or-break. If we fail, the objectives of the Paris Agreement will be definitively out of reach. If we succeed, the 2020s will be a roaring, prosperous, electric decade.
May 25, 2021