Eurelectric calls for prioritization of direct electrification

Direct electrification needs top billing in the slate of policies being put together by the European Commission in its "Fit for 55" climate package, Eurelectric's Secretary General Kristian Ruby told S&P Global Platts May 25.

The association has just set out five "policy pillars" to 2030 that in sum call for a holistic policy framework to accelerate electrification and overcome existing barriers.

"The 2020s will be the decisive decade. If we fail, the Paris objectives will be out of reach. If we succeed, we'll have a roaring '20s for electrification," Ruby said.

This translates into the addition of 500 GW of renewables capacity, equivalent to half of all European generation in existence today, and Eur400 billion investment in distribution, he said.

At the same time, large and small consumers alike will need to transform processes and services to those based on carbon-free electrons and molecules.

"The Green Deal has profound implications for European society. We're looking at a fundamental shift to the customer, to the offtake side, and we need to pull all the electrification levers we have to succeed," he said.

All this spelled the need for a dedicated electrification strategy.

"The single most important thing is to get the electrification piece right. Sector integration is also important, but there is so much that still needs to happen on direct electrification, and I think there is a risk of losing sight of that," Ruby said.

Direct electrification was by far the most efficient route to meeting climate obligations, he said.

"The problem is that sector integration tends to skip the direct electrification path. It recognizes its importance but then goes straight to Power-to-X -- to molecules, hydrogen etc. It is essential we dig out the key piece that is critical for efficiency, customer experience, security of supply and decarbonization," he said.

Fatal lead times

There was a "huge disconnect" between headline targets and enabling policies, notably the "fatal lead times" facing renewable energy projects.

"Factor in six or seven years of permitting, and we're left with just three years to bring forward 500 GW. It does not add up. We need a change in mindset," Ruby said.

This was equally the case for grids.

"We need a new, collaborative mindset between regulators, DSOs and TSOs. The grid build-out challenge is everywhere – every single city in Europe is asking how do we decarbonize our transport, our heat? There cannot be an endless back-and-forth to get projects approved," Ruby said.

Collaboration was also needed between nature protection and climate policy on the one hand, and energy infrastructure projects on the other.

Coalition of the willing

"We need a coalition of the willing on the supply side as much as on the demand side to relieve some of these barriers," said Wytse Kaastra, a managing director and European utility lead for Accenture, and author of "Electric Decade", a new report produced in collaboration with Eurelectric.

The concept of the industrial cluster would be crucial to accelerating the transition, concentrating collaboration in energy-intense regions, he said.

"These pragmatic approaches must be pursued in order to scale up volumes. If not, companies will lose themselves in proof of concepts and fail to move the needle by 2030," Kaastra said.

The demand-side pull of industrial clusters would be greatly helped in port locations if the maritime sector also sent a strong signal for carbon-free fuels, he said.

The Electric Decade

Eurelectric's report identifies five policy pillars as part of a European electrification strategy. These are:

• System efficient decarbonization – prioritize direct electrification.
• End-user sector electrification – align heating and cooling in buildings with a 55% GHG target.
• Customer empowerment – establish a level playing field for electricity vs other energy carriers by reducing taxes and levies.
• Power system modernization – enable flexibility, improve permitting.
• Infrastructure reinforcement – ensure buildings have EV charge points, unlock investment in distribution.