THE ENERGY INDUSTRY TIMES - SEPTEMBER 2018
Industry Perspective 13
Electrification: the path to
an emission-free society
Eurelectric’s ‘Decarbonisation pathways’ is an extensive two-part study that concludes that a major shift to electricity in
transport, buildings and industry is needed to meet the goals set by the Paris Agreement. Kristian Ruby
December 2017 represented a
milestone for the European
power sector. Back then, the
industry launched its new vision to
power the EU economy with carbonneutral
energy and pursue all efforts
to decarbonise the electricity mix
well before mid-century.
That vision is now supported by
‘Decarbonisation pathways’, an extensive
two-part study conducted
with analytical support from McKinsey
& Company. The first part, published
in June this year, concludes
that a major shift to electricity in
transport, buildings and industry is
needed to meet the goals set by the
Paris Agreement. The analysis covers
100 per cent of the EU and European
Economic Area final energy
consumption, and reveals a close
connection between electrification
and deep decarbonisation.
In November this year we will publish
the second part of the study,
which examines a set of detailed
pathways, including associated costs,
to reach full carbon neutrality of the
power sector within one generation.
The study is based on bottom-up
inputs from national energy associations
– and their members – Eurelectric
committees and working groups,
as well as from external stakeholders,
including NGOs and industry associations.
The approach used is:
n Comprehensive: input from Eurelectric’s
34 members (28 EU + EEA
states);
n Granular: multi-factor analysis of
+50 sectors and subsectors of the
economy;
n Realistic: iterative benchmarking
with other leading studies and
research institutions.
‘Decarbonisation pathways’ delves
into three distinct scenarios of decarbonisation
and highlights the acute
need for a radical shift driven by four
factors: level of ambition, technology
development, consumer behaviour
and regulation.
The first scenario is aligned with
the EU’s current commitment under
the Paris climate agreement, namely
to cut carbon emissions by 80 per
cent by 2050 compared to 1990. It
relies on accelerated technology development,
customer take-up and the
implementation of policies needed to
deliver on Paris.
The second scenario assumes increased
reduction efforts to 90 per
cent. This would require a strong
shift in policies, tariffs and taxes to
remove barriers and promote decarbonisation
and electrification.
Lastly, the third and most ambitious
scenario explores moving towards
a full decarbonisation of the
EU economy with reductions of up
to 95 per cent, which could result
from early technology breakthroughs
in a context of concerted efforts on
decarbonisation policies around the
world. For the EU to reach full decarbonisation
by 2050, electricity
needs to cover at least 60 per cent of
final energy consumption. This is
achievable with a 1.5 per cent yearon
year growth of EU electricity use
whilst at the same time reducing the
EU’s energy consumption by 1.3 per
cent per year.
The conclusion of the three scenarios
is unequivocal: electrification is
the key to unlocking deep decarbonisation
and opening the door towards
that economically and environmentally
healthier society we are striving
for. The truth is that no matter which
2050 decarbonisation pathway we
choose, urgent action must be taken
to a more electrified energy sector. In
addition to climate protection, increased
electrification will also bring
other environmental benefits such as
noise reduction or better air quality.
Today a quarter of the total EU
emissions stems from the use of traditional
transport methods. The
findings presented in the ‘Decarbonisation
pathways’ indicate the
need for immediate action to increase
the electrification rates in
transportation. Despite high levels
of electrification of the rail lines,
only 1 per cent of the overall energy
use in this sector comes from electricity.
A massive shift in the transport
sector is required to deliver on
the Paris objectives.
E-mobility is a crucial area, and
one that is skyrocketing. Electric
transport is still a dwarf, but it will
soon turn into a giant. There are numerous
indicators that electromobility
is on the verge of a massive
take-off. In the past year, European
automakers have announced €34
billion investments in electrification.
In leading countries such as
Norway more than half of new passenger
cars are hybrid or full-electric.
Meanwhile, the European Commission
has proposed legislation,
which will bring 35-40 million electric
cars on the road by 2030.
Depending on the level of ambition,
75-95 per cent of all passenger
cars need to become electric. Today,
the deployment of electric cars is
limited. But a few years from now,
the pace of change will be enhanced
by economic fundamentals as the total
cost of ownership tips in favour
of electric cars.
We now need a political push and a
well-calibrated regulatory framework
that removes barriers in order to promote
decarbonisation through electrification.
Eurelectric believes that
European policy makers should step
up their game and aim at having 50
per cent of new car sales electric by
2030. Also, a robust carrot-and-stick
approach should be applied to ensure
delivery of the targets. Moreover,
public-private partnerships are essential
for the build-up of the necessary
infrastructure. As almost 90 per cent
of charging is done at home, it is crucial
to provide consumers with the
ability to charge an electric car at
home, regardless of whether they
live in the suburbs or in high-rise
buildings in city centres.
The electrification rates in buildings,
both residential and commercial,
are more advanced. Here, more
than one third of the total energy
consumption comes from electric
sources. However, reaching the goals
already agreed by policy makers
would require an electrification rate
of 45 per cent. As there is still room
for improvement, our study explores
the potential for electrification in
cooking, as well as in space and water
heating systems.
Encouragingly, there is some pioneering
change under way in the sector.
Notable developments include:
n In the Netherlands, Nerdalize is
heating residential water using heat
generated from their cloud
computing services;
n 85 per cent of hot water used in In
Drammen (Norway) comes from the
district heating that is powered with
low-cost hydro-based electricity;
n By blending up to 20 per cent
hydrogen with gas, Hydeploy
Consortium (UK) is moving towards
further indirect electrification.
Yet while numerous solutions already
exist, they need time before
taking precedence over outdated
technologies such as domestic oil
furnaces. Our study foresees that
heat pump economics will be a major
trigger for electrification in space
heating.
As electricity increasingly becomes
a flexible and ubiquitous
source of energy, different sectors
are gradually electrifying their activities.
Our study shows that in
2015 already one third of the overall
industrial activity was electrified.
By 2050 we can reach a direct electrification
rate of 50 per cent. The
relative competitiveness of electricity
against other carbon-neutral fuels
will be the critical driver for this
shift. Moreover, indirect electrification,
such as hydrogen made with
carbon-free electricity, has a significant
potential to decarbonise heavy
industrial processes.
Today, only a little over a fifth of
the total energy consumption is electric,
but to reach the decarbonisation
levels that correspond with the Paris
Agreement, electricity must represent
40-60 per cent. This does not
mean that overall energy consumption
will increase. On the contrary,
significant energy savings will also
be needed in order to reach the targets.
Here it is important to stress
that electrification and efficiency are
a winning combination, as, in many
cases, electrification actually yields
energy savings.
Numerous examples from each of
the three analysed sectors illustrate
how deploying electric solutions
contribute to the energy efficiency
gains. E-trucks consume approximately
50 per cent of their diesel
equivalents’ own energy consumption,
whereas, in cooking, the energy
intensity of electric solutions represents
one fifth of the ones using coal
or wood.
Across the three scenarios studied,
electrification delivers a third or
more of the energy savings needed to
reach the agreed emissions targets.
A last important finding is the different
starting points for the transition.
It is important to recognise regional
particularities when driving a
deep decarbonisation of our economies.
Our study shows that we are
facing different starting points in the
energy transition. Thus, the decarbonisation
pathways will continue
to be influenced by a number of factors,
including the availability of resources,
geographical position of
the country, industrial specialisations
and the commercial availability
of key transition technologies.
The bottom line remains that any
ambitious decarbonisation strategy
will require a strong push of electrification.
By betting on electrification,
Europe has a unique opportunity
to foster economic growth
while at the same time delivering on
the Paris goals.
Kristian Ruby is Secretary General,
Eurelectric.
Ruby: by betting on electrification, Europe has a unique
opportunity to foster economic growth while at the same time
delivering on the Paris goals