How can Europe capitalise on the smart technology on the grid to guarantee decarbonisation?
Last month was European Sustainability Week, which focussed on the theme ‘Going Green and Digital for Europe’s Energy Transition’. With the continuation of the conflict in Ukraine threatening the continent’s energy supply, and a commitment to decarbonisation by 2050, Europe is devoting significant attention to ensuring energy security. Despite the immediate nature of this winter’s gas crisis, however, the theme of the week demonstrated that Europe sees an opportunity to accelerate the long-term transition to clean, reliable, affordable energy.
Discussions focussed on Europe’s energy future. One session, ‘How will our energy future look in 20 years’ began with remarks from the Director-General for Energy Ditte Juul Jørgensen. In her opener, the Director-General affirmed the complementary aims of decarbonisation and energy security, remarking “there is no more secure energy source than the sun and the wind”. She pointed to the REPowerEU plan, published this Spring after the Russian invasion of Ukraine, as a way forward on reaching the Union’s aims on decarbonisation and energy security.
REPowerEU aligns the twin aims, founded on three pillars:
Reduce - A need to reduce consumption of energy overall
Renewables - A higher percentage of renewables on national grids, and faster
Replace - replace ‘dirty’ power with ‘clean’, and, in the name of advancing energy security, Russian-supplied energy components with other sources
Image: European Commission REPowerEU Plan
The REPowerEU plan is ambitious in its objectives to reach climate neutrality, increasing the headline 2030 target for renewables from 40% to 45% with a dedicated EU Solar Strategy and a targeted amendment to the Renewable Energy Directive to recognise renewable energy as an overriding public interest.
However, the three aims are not without their challenges. The option to ‘reduce energy consumption’ has political and economic implications that are driving significant opposition. The mandatory energy rationing proposed by the Commission in response to the gas price crisis has met with fierce opposition. This is an emergency solution, not scalable nor sustainable, and forces people to adapt to an arbitrary market structure, whereas a just system should work to support the needs of the population. Many of the problems the Commission seeks to address with the blunt tool of blanket demand reduction can in fact be better addressed by unlocking flexibility across the electricity network. The key is to shift energy to the right place and time, as and where it is needed, and ensure that the sources we draw it from are not impediments to our long-term goal of decarbonisation.
Public representations from EU leadership further highlights the issue with trying to fit the population to the system, rather than the other way around. Ursula von der Leyen, in her State of the Union speech, pointed to examples such as ‘Workers in ceramics factories in central Italy, have decided to move their shifts to early morning, to benefit from lower energy prices’. In von der Leyen’s example, workers altered their consumption patterns to the energy market, significantly disrupting their established routine and likely wellbeing to support the EU policy programme. Rather than asking the population to sacrifice their time, routine and wellbeing, or pursuing a blanket reduction in energy consumption, which as von der Leyen noted would mean that ‘millions of Europeans need support[1]’ the key is accelerating electrification and designing electricity - and specifically flexibility - markets which work to consumption patterns. Whilst gas demand can be harder to shift than electricity demand, given the type of usage, building a flexible electricity market will have immediate and long-term benefits for energy consumption. Patterns are moving towards an increase in electricity as a share of final energy consumption. Already, electricity is a greater share of final energy consumption (23.2 %), than natural gas (21.9 %)[2] which is driving the energy crisis, and this will only increase.
In Sustainable Energy Week, later sessions took up the theme of readying the grid for increased electrification, and the corresponding need for increased renewables penetration, and tied it to the ‘green and digital’ theme of the week. The Tuesday panel event ‘Supporting investments for a more digitalised electricity grid’ noted the need for innovative solutions to be used and provided by system operators, manufacturers, providers, and utilities. Opening remarks from Professor Peter Palensky emphasised the need for massive grid investment, not only on cables and physical infrastructure, but on ‘smartness’. Panellists, representing network operation and grid technologies, agreed that whilst there would still be a need for physical expansion of the grid, understanding technologies currently available to improve the efficiency of the grid was key to deliver for consumers. Yann Fromont, President of T&D Europe, remarked that ‘data is key for making the grid more flexible – we need not only an automated, smart grid but an active grid with real-time management and participation’.
Key for enabling this flexibility through smart systems is building markets which support the economic case for them. Local flexibility markets are being developed across Europe, to support the provision of local flexibility services to Distribution System Operators through market-based instruments. A landmark EU report looking at Local Electricity Flexibility Markets in Europe was released this month, examining the implementation of flexible electricity markets at the local level across France, Germany, Netherlands, Norway, Sweden and the UK. The findings of this article show a lack of harmonisation across these markets, which could cause issues for flexibility providers across the bloc. We will discuss these in a further, more detailed article.
The European Union is correct to identify the benefits of flexibility and digitalisation to the grid – the theme of the week was well-timed with steps being taken to reduce energy bills across the bloc. However, the messaging from senior figures continues to focus on traditional solutions. Policy makers should listen to experts and industry who participated and consider digital and smart solutions to aid them in achieving the aims of the REPowerEU plan. Overall, these three aims share a common thread – increasing capacity and flexibility of the electricity grid. At Enoda we see the future in moving the function of stability to the grid with increased carrying capacity of the poles and wires, by improving distribution technology, like Enoda’s Prime. This would enable increased integration of “clean” generation sources like renewables; would not rely on demand management as the grid would become self-stabilising and be able to access sources of flexibility across markets.
We must continue to pursue clean, reliable, and affordable solutions.
[1] https://ec.europa.eu/commission/presscorner/detail/en/SPEECH_22_5493
[2] https://ec.europa.eu/eurostat/statistics-explained/index.php?title=Energy_statistics_-_an_overview#Final_energy_consumption
