by Sushil Purohit*
To realise an affordable, clean energy future, Europe needs to double down on renewables.
With energy prices at record highs, policymakers face a decisive moment in the energy transition. Europe is in the latest of a long line of energy crises going back to the 1970s, with wholesale gas prices surging, and energy bills soaring for households and businesses across the continent.
As costs bite, and the conflict continues, it’s vital that European policymakers maintain their focus on two distinct time horizons. Leaders need to take measures to ensure energy security in the short term. But they must not lose sight of the medium to long-term opportunity: to finally get to the root of the problem.
To make this the last energy crisis and affordably meet the European Union’s (EU) net zero target, EU leaders need to boldly scale-up renewables at an unprecedented rate.
We stand on the precipice of a once-in-a-generation moment to transition quickly and definitively to renewables, cutting emissions and harnessing the potential of unlimited clean power. To understand the opportunity, we recently modelled a predominantly renewable-based power system built by 2030.
The model selected the lowest cost technologies to meet the power demand of 33 European (EU and non-EU) countries, as well as the required balancing technologies to support variable renewable generation.
€323 billion can be saved by doubling renewables by 2030
The results are striking. The analysis finds that Europe can cut its power sector gas consumption in half, reduce energy costs by €323 billion by doubling its share of renewables – from around 33% now, to over 60%, by 2030. In turn, this would reduce electricity bills by 10%, while putting Europe on track to deliver its 55% GHG reduction target by 2030.
Crucially, this allows for annual gas usage in the power sector to be slashed by 52% by 2030. This avoids 5,456 TWh of gas consumption, the equivalent of 3.5 years of Russian gas supply to the EU; significantly raising energy independence.
80GW per year of renewables – transformational, but feasible and now critical
Make no mistake, what we have modelled requires a monumental but achievable build-out of energy infrastructure – up to 80GW per year of renewable capacity. Flexible and reliable grids also require renewable capacity to be reinforced by balancing technologies, which effectively ‘level up’ renewables into a baseload role, replacing fossil fuels.
But what level of capex would be needed to build 80GW of renewables? On a yearly basis, Europe would collectively need to invest over €63 billion, including both balancing and renewables.
To put this into context, the EU installed 37GW of wind and solar in 2021. But when looking outside of Europe, it’s clear that with the right coordination 80GW per year is achievable.
For example, China installed 17GW of offshore wind last year, more than double the amount it built in the previous year – and more than the rest of the world combined in the last five years.
The latest IPCC Mitigation report is crystal clear that to limit warming to around 1.5°C global greenhouse gas emissions must peak by 2025 – and be reduced by 43% by 2030. The power sector provides the lowest hanging fruit for those emissions cuts and needs to take the lead in electrification.
Furthermore, the influx of renewables entering power systems is creating the right conditions for excess clean electricity to be used as a raw material for new types of hydrogen-based, carbon neutral future fuels.
Once our power grids are predominantly powered by renewables, other sectors, such as heavy industry and transport, can be fuelled by both clean abundant electricity, as well as hydrogen-based fuels, to deep decarbonisation in our economies by 2050.
The EU can be a multiplier of low carbon technology
Adding 80GW of renewables annually demands a level of cross-country cooperation which the EU is hardwired to achieve. Through coordinated action, the bloc can unlock breathtaking economies of scale in rolling out renewables.
The multiplier effect of countries collaborating to commercialise innovation is clearly shown by the ‘Energiewende.’
Germany’s clean energy plan focused her industrial and engineering capability, plus financial capacity, on rapidly increasing the adoption of solar PV technology – before the baton was passed to China, which cut costs even further, driving global adoption.
The same multiplier effect can be realised in Europe. By encouraging cross-border infrastructure projects, the EU can link the energy systems of its member countries to promote energy security, efficiency and streamline the costs of the transition.
Clearly, at the local level, European countries must deploy renewables as quickly as possible, and this can be done by establishing permitting frameworks to give renewables projects priority status – plus by fast-tracking approval.
Ultimately, to unlock the full potential for 100% renewable power systems, we must build grids with flexibility at the heart. And this is achievable by creating market frameworks to encourage investment in flexible balancing capacity that can underpin the shift to renewable baseload power.
Energy independence need not cost more for consumers
The combination of the competitive price of renewable technology compared to fossil fuels, plus the imperative to avert the climate crisis have made it politically acceptable and economically smart to deploy renewables at a scale.
Continued reliance on baseload gas, plus locking in new fossil fuel infrastructure to burn it, represents acute volatility for companies and consumers.
The current opportunity to transition towards renewable grids would have seemed unthinkable a decade ago, with persistently high demand for fossil fuels acting as an unassailable barrier to action.
But now, for the first time, the power sector is actively trying to reduce demand for natural gas. The price crisis, compounded by the war in Ukraine, has provided the clearest signal that countries must accelerate away from baseload gas to mainstream renewable power, backed by balancing technologies, at breath-taking speed.
At this crucial juncture, it is vital that countries avoid stranding investment in new inflexible fossil fuel power plants, such as coal, which are incompatible with energy security and Europe’s net zero targets. We have the technologies and expertise we need for a rapid transition. All we need now is the political will.
*president of Wartsila Energy and EVP Wartsila Corporation from Finland
**first published in: www.euractiv.com
By: N. Peter Kramer
