EU electricity on the fast track to carbon neutrality

Two thirds of EU electricity was carbon free in 2020. In a decade, this figure will increase to 85%. An integrated electricity market is essential for all countries to benefit from the cleanest electricity in history.

Nine policy measures can put the European economy on a steady path to net zero, highlights Eurelectric’s Energy Barometer 2021, an industry-wide analysis of trends in the EU electricity sector.

Jean-Bernard Lévy, CEO of EDF and President of Eurelectric, said: “With the Fit for 55 package, Europe’s electricity could be carbon-free five to ten years ahead of schedule, helping transport, heating and industries accelerate their decarbonization. We are ready and committed to playing a leadership role in delivering the carbon-free electricity needed to achieve the Green Deal ambition.”

Kristian Ruby, Secretary General of Eurelectric, added: “To deliver on the ambition, it is essential to have the right investment signals in place and to remove all barriers to progress. Especially allowing delivery times for new energy projects should be shortened as a matter of priority.”

However, in less than a decade, the electrical capacity must increase by 27% compared to 2020. This corresponds to a 93% growth in renewable capacity, achievable only if Europe’s permitting processes radically change.

Investment must increase to close the ambition gap. By 2030, investments in distribution need to double the average of the last decade to 55 billion euros per year, while clean generation capacities need 75 billion euros per year. Key enablers will be: predictable market-based frameworks; a functioning emissions trading system; modernized network tariffs and comprehensive regulation for flexibility solutions, such as battery storage.

The electrification of end-use sectors must grow at breakneck speed. Unless annual emission reductions are nearly tripled to 160 MT of CO ₂ equivalent, the 55% greenhouse gas emission reduction target will be met by 2045, 15 years too late. Key to these decarbonisation goals is to increase electrification rates to a minimum of 33% of the economy by 2030, up from 23% today.

Taxes and levies on electricity should also be reduced. Having risen 29% since 2010, they place a burden on consumers looking to adopt carbon-free alternatives for transportation, heating and cooling, and industrial processes. EU policy makers must put an end to this to enable electric heat pumps to triple to 45 million and bring the electric vehicle market share to 60%, up from 10% in 2020, as the Fit for 55 package intends.

Source: The Energy Newspaper