A common challenge facing industry, policymakers and customers in
today's energy world is: how
to cost-effectively decarbonise
Europe. Heating and cooling
in EU buildings and industries
constitutes 50% of our energy
consumption. Together with 32%
for transport, they represent the
largest shares of energy demand
across Europe. Currently, 85% of
heating and cooling is produced
from fossil fuels. This means that
there is a vast potential to both
decarbonise and save fuel. While
some options to this are widely
known, such as electric vehicles
(EVs), much more can already be
done, especially if we look at the
overall potential of electrification.
REVEALING ELECTRICITY'S TRUE VALUE
In considering the true value of
electricity as a means to achieve
a decarbonised European
economy, we must be clear that
no other current energy carrier
can decarbonise to the same
extent and scale as electricity.
Decarbonising electricity
generation will make a major
contribution to meet Europe's
climate change targets. With the
power sector fully committed
to reducing CO2 emissions by
80-95% by 2050, and an effective
policy framework in place to
ensure this goal, electricity is set
to become the energy carrier
of the future. Therefore, if used
more widely, it also has the
potential to decarbonise other
sectors, which currently have
no prospect of becoming fully
sustainable.
ELECTRIFY AND BENEFIT
Electrifying heating, cooling
and transport with power from
decarbonised sources reveals
a wide range of benefits which
are critical in the transition to a
sustainable economy in Europe.
One of the key benefits of
electrification is that it helps meet
the world's energy needs with
less carbon. Using electricity for
local heating in buildings and
cities would not only reduce
CO2 emissions, but it would also
cap the emissions of the heating
sector by de facto bringing them
under the EU Emissions Trading
System.
Currently, there is widespread
perception that improving
energy efficiency implies
reducing electricity consumption.
However, recent technological
developments have completely
reshaped the comparative
efficiency of electricity use versus
the use of other energy vectors
(e.g. gasoline, natural gas, oil).
Therefore, the use of more
electricity can actually result in
increased energy efficiency. For
example, changing an oil burner
with a heat pump can, on average,
save almost 50% of annual
primary energy consumption.
In road and rail transport, the
numbers are just as impressive.
In urban areas in particular,
electrification can also have
significant environmental
benefits. Electricity in transport
and heating can reduce air
pollution in our cities, especially
when it comes to local pollutants
such as particulates, NOx, SOx,
VOCs and ozone. The use of
electric buses, trains and light
trains can drastically improve
the air quality, traffic congestion
and noise pollution. Beyond
cities, electricity can also replace
fossil fuels in small and medium
enterprises (SMEs). This will allow
concentrating energy related
emissions to those remaining
electricity producing plants
with more efficient pollution
abatement systems that will
primarily be used as back-up
for carbon-neutral generation.
Therefore, switching from direct
use of fossil fuels to electricity
enables energy users to meet
energy needs through zero
emission energy (solar, wind,
hydro, geothermal, nuclear etc.).
Since power can be produced
from many different sources,
electrification allows greater
flexibility, and in return, this
will further strengthen the
security of supply. At the same
time, electrifying final energy
consumption could increase
storage opportunities. The use
of electric vehicle batteries or
electric appliances (e.g. water
heaters) as flexible demand and
decentralised energy storage
will allow higher renewable
penetration and increase the
reliability of electricity supply.
Finally, all the benefits mentioned
above have direct positive
impacts on the consumer. The
use of electric vehicle batteries
or electric appliances means
that customers will no longer
rely on fossil fuels and their
volatile prices. Moreover, the
development of demand
response options for consumers
make electric solutions more
valuable compared to fossil
fuelled alternatives. Electrification
empowers the final consumers
by giving them the opportunity
to influence their bill and be in
control of their consumption.
TECHNOLOGICAL ENABLERS ARE A REALITY
The good news is that the
technologies enabling
electrification are a reality. They
already exist on the market
or are getting ready for mass
deployment (e.g. electric vehicles,
heat pumps, smart technologies
controlling energy consuming
appliances, and direct heating
based on low carbon generation).
However, we must ensure that
these technologies live up to their
potential and help transform the
energy system. While there have
already been some positive policy
signals, such as the strengthening
of the EU Emissions Trading
Scheme (EU ETS), much more
progress is possible in the right
policy landscape.
POLICY DRAWBACKS AND OBSTACLES
Despite policy developments,
electrification and its direct and
indirect benefits continue to suffer
from a general lack of recognition
or even a straight blockade of
technologies involved. One
major obstacle, which remains
to be tackled, is related to the
additional energy costs placed
on electricity bills. These make
electricity more expensive to
customers compared to fossil
fuel alternatives. It is therefore
crucial to develop smarter
financial instruments to increase
private investment in new
technologies that can replace old
ones. Moreover, further factors
enabling electrification, such
as innovation and smart grids,
need to be recognised so that
new technologies can be pushed
forward.
Without a doubt, the
electrification of transport and
heating is a very promising
pathway. However, the policy
obstacles indicated above need
to be addressed as soon as
possible. The choices we make
today will determine whether
we reap the potential benefits
from electrification in 10 years,
or whether we continue to
consume large quantities of
fossil fuels in our buildings and
means of transport for another
generation. If we are serious
about decarbonisation, and
the power sector is, unlocking
electrification's potential
will multiply its benefits for
society and the environment.
EURELECTRIC, sector association
representing the common
interests of the electricity industry
at pan-European level, has made
electrification a top priority in its
agenda and will publish further
reports supported by quantitative
data.