Electrification - Myth Busters

All-electric-Europe might sound very optimistic and this idea is often confronted by doubts and questions. We have consulted a large number of EU stakeholders, from policymakers to industry, and gathered what are potential challenges. From what to do with gas infrastructure and energy storage, to cost of electricity and economic impact.

An independent research - THEMA - has been conducted and below you will find answers to the most common 40 questions. If you have any other doubts, why you think that full scale electrification is not possible, contact and test us.

  • Infeasibility of Electrification
    • Credible decarbonisation pathways to 2050 do not assume extensive electrification.

      Most, if not all, decarbonisation scenarios, including those of the EU Commission, foresee extensive electrification. The Commission’s own analysis of cost-effective measures to reduce emissions by ~90% shows electricity’s direct share of final energy demand more than doubling between 2015 and 2050, with further electrification under more ambitious scenarios.

      Most, if not all, decarbonisation pathways project extensive electrification. In the European Commission’s 2018 analysis of pathways to 2050, which examined eight different potential scenarios, electricity becomes the dominant carrier in final consumption in every scenario, including those designed to specially emphasise the use of alternative fuels like hydrogen. In the cost-effective scenario (consistent with a roughly 90% reduction in emissions), electricity goes from making up 22% of final energy consumption in 2015, to close to half of all final energy consumption in 2050. This reflects the electrification of energy demand in industrial processes, heat and transport. The more ambitions emission reductions depend on even more electrification.

      Eurelectric has shown that, under a 95% emission reduction scenario for Europe, electricity could make up 60% of final energy consumption. Again, increased ambition following from the European Green Deal could imply an even higher degree of electrification.

      Further global studies from reputable sources such as the IPCC, the IEA and IRENA all see a major increase in the share of electricity in final energy consumption. To achieve a below-2°C pathway, the IPCC also expects electricity’s share of global final consumption to increase dramatically to reach up to 50% by mid-century. These conclusions are matched by those of IRENA , and in the IEA WEO Sustainable Development scenario, final consumption of electricity grows in Europe by 1.1% a year between 2018-40 even while total final energy consumption falls by 1.3% annually, again resulting in a dramatic expansion in electricity’s total share.

      References:

      European Commission, “In-Depth Analysis In Support Of The Commission Communication COM(2018) 773: A Clean Planet for All - A European Long-Term Strategic Vision for a Prosperous, Modern, Competitive and Climate Neutral Economy” (Brussels, 2018), fig. 20, https://ec.europa.eu/clima/sites/clima/files/docs/pages/com_2018_733_analysis_in_support_en_0.pdf.

      Eurelectric, “Decarbonisation Pathways: Full Study Results,” 2018, 50, https://cdn.eurelectric.org/media/3558/decarbonisation-pathways-all-slideslinks-29112018-h-4484BB0C.pdf.

      W. V. Masson-Delmotte, P. Zhai, H. O. Pörtner, D. Roberts, J. Skea, P.R. Shukla, A. Pirani, E. Lonnoy Moufouma-Okia, C. Péan, R. Pidcock, S. Connors, J. B. R. Matthews, Y. Chen, X. Zhou, M. I. Gomis, and T. Waterfield T. Maycock, M. Tignor, “Global Warming of 1.5°C. An IPCC Special Report on the Impacts of Global Warming of 1.5°C above Pre-Industrial Levels and Related Global Greenhouse Gas Emission Pathways, in the Context of Strengthening the Global Response to the Threat of Climate Change,” 2019, 130, https://www.ipcc.ch/site/assets/uploads/sites/2/2019/06/SR15_Full_Report_High_Res.pdf.

      IRENA, Global Energy Transformation: A Roadmap to 2050 (2019 Edition), International Renewable Energy Agency, 2019, 20.

      International Energy Agency, “World Energy Outlook 2018,” 2018, https://doi.org/10.1787/weo-2018-2-en.

    • The limited supply of rare earth materials makes extensive electrification infeasible.

      The raw materials needed for electrification are not geologically scarce and efforts are already underway to improve the supply chain.

      According to IRENA, most rare earth minerals are not geologically rare. For the EU, the issues are ‘the time lags’ needed to ramp up production and import dependency, as more than 90% of these metals are coming from other regions, mainly from China. A heightened focus on improved sourcing, resource efficiency and recycling has already helped lower prices since 2011.

      To avoid future constraints and reduce import dependency, the EU has put forward a list of critical raw materials and started several initiatives to prevent future supply shortages. These initatives include SecrEEts , a project to establish a stable and secure supply of critical rare earth elements in Europe, and the European Rare Earths Competency Network (Erecon) , to identify opportunities and bottlenecks and increase both resource efficiency and recycling.

      Options being pursued by the EU to enable a secure supply of critical raw materials include:

      • substitution of materials using varied technologies, e.g. cobalt-free li-ion batteries,
      • supporting new supply sources to decrease the reliance on single countries,
      • improving reuse and recycling through the EU’s circular economy strategy (European rare earth recycling rates were below 1% in 2014 , and
      • the mining of critical raw materials in promising locations in Europe, e.g. Sweden or Greenland.

      Estimates show that recycling and the use of alternative technologies have the potential to significantly reduce total demand for the critical raw materials used in electric vehicle batteries and solar PV manufacture primary resources.

      References:

      Vincent Moreau et al., “Enough Metals ? Resource Constraints to Supply,” 2019, https://doi.org/10.3390/resources8010029.

      IRENA, “A New World - The Geopolitics of the Energy Transformation,” Global Commission on the Geopolitics of Energy Transformation, 2019.

      EU Commission SINTEF, “Horizon 2020 - Secure European Critical Rare Earth Elements,” 2018, https://cordis.europa.eu/project/id/776559.

      ERECON (J. Kooroshy et al. [Eds.]), “Strengthening the European Rare Earths Supply-Chain - Challenges and Policy Options,” 2015, https://reinhardbuetikofer.eu/wp-content/uploads/2015/03/ERECON_Report_v05.pdf.

      Elsa Dominish, Sven Teske, and Nick Florin, “Responsible Minerals Sourcing for Renewable Energy,” 2019, fig. A, https://earthworks.org/cms/assets/uploads/2019/04/MCEC_UTS_Report_lowres-1.pdf.

    • Some industrial processes, like those requiring combustion, cannot be electrified.

      Some industrial processes produce emissions directly and will be challenging to decarbonise irrespective of the broader decarbonisation strategy. However, even in these cases, there is scope to reduce total emissions through partial electrification.

      Electricity is remarkably versatile in terms of its potential uses, but some industrial processes will be difficult to decarbonise irrespective of Europe’s overall decarbonisation strategy. Cement, steel and plastics manufacturing, in particular, pose major challenges. The bulk of cement emissions at a modern production facility, for example, are so-called ‘process emissions’ stemming directly from the chemical reactions involved, and fossil fuels form part of the raw materials used to manufacture steel and plastics.

      However, the fact that these sectors will be hard to decarbonise in no way implies that electrification does not make sense where it is possible and, indeed, even these processes can be partially decarbonised through existing electric technology. The electrification of industrial processes also supports the development and application of advanced energy management.

      Emissions from cement manufacture, for example, could be reduced by as much as 40% by electrifying the heat processes currently fuelled using fossil fuels and emissions from steel manufacture could be reduced by 80% or more by adopting production processes that are already commercially deployed (Circored®). Consequently, electricity still has a potentially useful role to play in the decarbonisation of hard-to-treat industrial sectors.

      References:

      Bellona, “An Industry Guide to Climate Action,” 2018, 15, https://network.bellona.org/content/uploads/sites/3/2018/11/Industry-Report-Web.pdf.

    • Electrification is not a viable alternative to fossil fuel use for heating and transport in rural areas.

      Direct electrification is already a viable alternative for much of rural heating and transport. Even hard-to-treat areas, like large agricultural machinery, could be decarbonised through indirect electrification and the use of e-fuels.

      Electrification represents an effective way to decarbonise heating in rural areas. For example, rural areas are often not connected to the gas network, meaning that the distribution of alternative fuels such as ‘green hydrogen’ is impracticable. Similarly, district heating is generally unavailable, and sustainable biomass is needed elsewhere to decarbonise harder-to-treat sectors. However, heat in rural areas can be decarbonised using heat pumps combined with renewable energy sources and energy efficiency measures.

      Electrification also represents an effective way to decarbonise transport. Transport in rural areas is characterised by longer distances for road transport, lower availability of public transport services and the use of vehicles and machinery for agriculture. Passenger cars already have ranges exceeding 600 km, which could meet the needs of a large portion of rural transport, and further improvements in battery technology will allow even longer ranges, extending the suitability of electric cars in rural areas. Trucks travelling longer distances may have to rely on approaches other than direct electrification, but electricity can still help decarbonise these areas through the use of green hydrogen or other e-fuels.

      The situation for agricultural machines is similar. Smaller agriculture machines and vehicles are suitable for direct electrification, and some models are already available on the market. Bigger machines might be harder to electrify directly with current technologies but can still be indirectly electrified through emissions-free e-fuels.

      References:

      Committee on Climate Change, “Biomass in a Low - Carbon Economy,” 2018, https://www.theccc.org.uk/publication/biomass-in-a-low-carbon-economy/.

      Brian Vad; Mathiesen et al., “Towards a Decarbonised Heating and Cooling Sector in Europe - Unlocking the Potential of Energy Efficiency and District Energy” (Copenhagen, 2019).

    • Agriculture requires liquid fuels and therefore cannot be electrified.

      Direct electric farm vehicles, like loaders and mixer-feeder wagons, are already on the market and future models are expected to benefit from the rapid development of e-mobility technology in other sectors.

      Some electric farm vehicles, such as loaders and mixer-feeder wagons, already exist in the market and the electrification of machines and vehicles for agriculture is already benefiting from battery technology development for electric cars.

      In general, small electric agriculture machines and vehicles, weighting below 3-4 tons and with a motor size of 19-56 kW, are well suited for direct electrification. It is these machines that already exist in the market and that are likely to become more available and more common in the coming years.

      For larger machines and vehicles, and for vehicles that rely on long usage between charging due to the work pattern of farmers, the current constraints of battery technology are more pressing and further design and process innovation is needed. Work is, however, being done on developing electric models for larger machines and vehicles and many of the biggest manufacturers are involved. For some of these machines, liquid e-fuels may currently represent a more feasible approach than direct electrification, but such fuels are certainly not required by all agricultural machines and vehicles.

      References:

      Richard Allison, “Is Electric Technology Set to Kill off Diesel Tractors,” 2017, https://www.fwi.co.uk/arable/analysis-electric-technology-set-kill-off-diesel-tractors

      Helene Sedal (Rambøll) Heidi Ødegård Berg, Per Halvor Bekkelund, “MULIGHETSROMMET FOR ALTERNATIV TEKNOLOGI PÅ TRAKTORER,” 2016.

      Derek Casey, “Is There Life after Diesel for Tractors?,” 2019, https://www.independent.ie/business/farming/machinery/is-there-life-after-diesel-for-tractors-38270479.html.

    • There aren’t enough people with the necessary technical qualifications to electrify the economy.

      Relative to other means of decarbonisation, electrification benefits from a large existing skilled workforce and a variety of measures and infrastructure that are already in place to help address future skills and capacity needs.

      Decarbonisation will reshape the economy and, with it, the skills required of the workforce. The skills needed for electrification are, in general, not new, but match those of the roughly 1.8 million European professionals already employed by electrical contractors. Indeed, 1 in every 134 existing workers is employed in this sector. This makes meeting the labour needs of the energy transition far easier and it ensures that even genuinely ‘new’ jobs can be filled by upskilling the existing workforce. It also helps that the training infrastructure required is likely already in place since workers in the sector are trained in a variety of institutions that include both electro-technical schools and tertiary education institutions.

      This is not to say that the current workforce is, by itself, sufficient – more workers and new combinations of skills will be needed – but here too, the sector is already preparing itself for the future. In 2020, new European sectoral skill alliances were launched to support the skills needed for both the electro-mobility battery industry and digitalisation in the energy value chain. In addition, several national electrical contractors’ associations are already working in cooperation with education agencies and employment institutions to improve paths into the sector. This includes ZVEH in Germany, which is working to reform vocational education and training paths into the sector, and FFIE and SERCE in France, which are engaged in a multi-stakeholder initiative to adapt the relevant qualifications to meet future skills needs.

      References:

      EuropeOn, “A Snapshot of the Electrical Contracting Sector in Europe,” 2019, 3, https://europe-on.org/wp-content/uploads/2019/12/EuropeOn-sector-report-3_compressed-2.pdf.

      European Commission, “Blueprint for Sectoral Cooperation on Skills - Employment, Social Affairs & Inclusion - European Commission,” accessed April 14, 2020, https://ec.europa.eu/social/main.jsp?catId=1415&langId=en.

    • Space travel requires combustion and therefore cannot be electrified.

      Some parts of space travel are already electrified and present advantages over chemical propulsion. Moreover, hydrogen, the fuel for the main engines , can be produced with electricity.

      Once spacecraft have been placed into orbit and separated from the launch vehicle, they rely on the onboard propulsion system for moving in space. One of the problems with chemical propulsion at this stage is the weight of the propellants, which can represent a large share of the spacecraft’s total weight. With the use of Solar Electric Propulsion (SEP), the total weight of the propulsion system and the propellant can be reduced by up to 90%. Due to the lower weight, mission costs can be reduced because launch vehicles can be smaller and more cargo can be carried by spacecraft over long distances.

      Although launch vehicles still rely on chemical propulsion to produce the amount of thrust needed to get into orbit, the propellants used in the main engines can be produced with electricity. For example, SpaceX’s Starship is designed to use methane and oxygen as propellants and methane can already be produced using power-to-X technologies. Similarly, hydrogen, a very popular e-fuel, is currently used in NASA’s Space Launch Systems to fuel the engines.

      References:

      European Space Agency, “What Is Electric Propulsion?,” accessed April 13, 2020, https://www.esa.int/Enabling_Support/Space_Engineering_Technology/What_is_Electric_propulsion.

      Beverly Perry, “Rocket Fuel | Rocketology: NASA’s Space Launch System,” Nasa, 2016, https://blogs.nasa.gov/Rocketology/tag/rocket-fuel/.

      John H. Glenn Research Center, “NASA Facts: Solar Electric Propulsion,” NASA, vol. 3, 2002, http://www.nasa.gov/centers/glenn/pdf/84790main_fs03grc.pdf.

      SpaceX, “Starship,” accessed April 13, 2020, https://www.spacex.com/starship.

      NASA, “Space Launch System (SLS) Overview,” NASA, accessed April 16, 2020, https://www.nasa.gov/exploration/systems/sls/overview.html.

  • Emissions
    • Electrifying Europe (EEA) would not significantly reduce overall greenhouse gas emissions.

      Electrification of final consumption entails considerable emission savings both due to inherent improvements in efficiency and as a result of the relatively low carbon intensity of electricity generation the EU, even now, which will improve further in future.

      The electrification of industry, the building sector and transport displaces relatively carbon-intensive existing sources of energy with electricity that is not only presently cleaner, but will continue to become even cleaner in the future. CO2 emissions in the power sector have decreased by almost 30% since 1990 in the EU and the bloc’s reference scenario for 2030, which achieves a 32% share of renewable energy in gross final energy consumption, implies that the carbon-intensity of average electricity and steam generation will fall by a further 5.7% each year between 2020-30. As a result, electrification directly reduces the emissions intensity of these sectors. Commitments to even higher climate ambitions in the European Green Deal will further speed up the complete decarbonisation of the power sector.

      Even ignoring these future improvements, electrification today can lower GHG emissions substantially. Life-cycle analyses show that with the electricity mix of most European countries, e.g. France or the UK, carbon savings would already be achieved through electrification. Only in few countries, notably Poland or Estonia, would the uptake of electric heat pumps or EVs not lead to immediate savings . Still, in the coming years, power generation in these countries will become clean enough to realise emissions savings via electrification.

      Importantly, the relatively clean nature of power is not the only means by which electrification reduces emissions. In many cases electrification directly enables energy efficiency. Modern gas boilers, for example, are capable of achieving impressive efficiencies approaching 90%. However, these are nothing compared to the roughly 300% efficiency achieved by air source heat pumps, which can output more heat than the actual amount of electricity consumed. Sources of efficiency like these enable electrification to support emissions reductions even where the source of electricity used is not carbon-free.

      References:

      European Commission, “Technical Note: Results of the EUCO3232.5 Scenario on Member States,” 2019, https://ec.europa.eu/energy/sites/ener/files/technical_note_on_the_euco3232_final_14062019.pdf.

      Bloomberg New Energy Finance, “Sector Coupling in Europe: Powering Decarbonisation,” 2020, https://data.bloomberglp.com/professional/sites/24/BNEF-Sector-Coupling-Report-Feb-2020.pdf.

      Diaz Vazquez and Van Dingenen, Global Energy and Climate Outlook 2019 : Electrification for the Low-Carbon Transition, 2020, https://doi.org/10.2760/58255.

      Daniel Steinberg et al., “Electrification and Decarbonization: Exploring U.S. Energy Use and Greenhouse Gas Emissions in Scenarios with Widespread Electrification and Power Sector Decarbonization,” July (2017), https://doi.org/10.2172/1372620.

      Knobloch, F., S. Hanssen, and A. Lam, “Net Emission Reductions from Electric Cars and Heat Pumps in 59 World Regions over Time.,” Nature Sustainability, 2020, https://doi.org/10.1038/s41893-020-0488-7.

      Currie & Brown, “The Costs and Benefits of Tighter Standards for New Buildings,” 2019, 27–28, https://www.theccc.org.uk/wp-content/uploads/2019/07/The-costs-and-benefits-of-tighter-standards-for-new-buildings-Currie-Brown-and-AECOM.pdf.

    • Electricity generation will always be somewhat carbon intensive.

      Zero-carbon generation in the EU is possible.

      A decarbonised power sector would rely on a combination of renewable generation and sources of flexibility that can balance the daily and seasonal variability of many renewable generators. These sources of flexibility would potentially include storage and smart demand-side tools and automation. Interconnectors that transport low-carbon electricity from locations with an oversupply to locations with too little generation will also be vital.

      Even under a scenario in which generation is zero-carbon, generation technologies may still have lifetime emissions if the manufacturing, construction or decommissioning processes involve emissions. , New materials and cleaner ways to build, operate and maintain are continuously researched, and allow for a further reduction in the carbon-intensity of power generation even where other supporting sectors remain net emitters. For example, Vestas, the Danish wind turbine manufacturer plans to abolish non-recyclable turbine parts by 2040.

      References:

      IRENA and State Grid Corporation of China, “Electrification with Renewables: Driving the Transformation of Energy Services Preview For Policy Makers,” 2019, https://irena.org/-/media/Files/IRENA/Agency/Publication/2019/Jan/IRENA_RE-Electrification_SGCC_2019_preview.pdf.

      World Nuclear Association, “Comparison of Lifecycle Greenhouse Gas Emissions of Various Electricity Generation Sources,” WNNA Report, 2011, https://doi.org/10.1002/esp.

      C. Bauer et al., “Greenhouse Gas Emissions from Energy Systems, Comparison, and Overview,” Encyclopedia of the Anthropocene 1–5 (2017): 473–84, https://doi.org/10.1016/B978-0-12-809665-9.09276-4.

      Craig Richards, “Vestas Plans ‘zero-Waste Turbines’ by 2040,” Wind Power Montlhly, January 20, 2020, https://www.windpowermonthly.com/article/1671285/vestas-plans-zero-waste-turbines-2040.

  • Other EU Policy Objectives
    • Electrification supports existing businesses rather than stimulating new innovations, industries and export opportunities.

      The electrification of sectors currently dominated by fossil fuels will entail the creation of entirely new business models, innovation and the development of large, new industrial sectors in which Europe can take a global lead.

      Electrification is transforming key parts of European society such as transport, buildings and industry and this wave of change is stimulating innovation and new business models in both the electricity and the affected sectors.

      For example, innovation is taking place in the sphere of the electric heating and cooling of buildings and industry. Next-generation heat pump technology is being developed to provide ever more energy-efficient and comfortable solutions for regulating building temperature. Synergies between electrical heating and cooling of buildings and the variable nature of power production from renewable sources such as wind and solar power can be exploited to enable decarbonisation of the building sector . The flexibility of residential heat pumps could stimulate new retail business models in which heat pump activity is made to respond to fluctuations in the power market, to the benefit of the electricity system and the homeowner. Indeed, new ideas and business models can be seen in every segment of the value chain.

      Electrification, and the changes it brings, provides an enormous potential for new industrial growth in Europe. An important example is the electrification of transport, which brings a completely new set of opportunities related to distributing, charging and storing electrical energy. This potential is clearly recognised by the EU, which has already identified the manufacture of batteries for EVs as a strategic opportunity to build up new industry in Europe, secure “high value jobs and increase economic output”. Indeed, it cites estimates of the European market potential of € 250 billion annually from 2025.

      References:

      Nexant, “So Hot Right Now: Innovations in Heat Pump Technology | Nexant,” 2019, https://www.nexant.com/resources/so-hot-right-now-innovations-heat-pump-technology.

      Innovation Origins, “Electric Heating Could Save CO2 Emissions - Innovation Origins,” 2019, https://innovationorigins.com/electric-heating-could-save-co2-emissions/.

      David Fischer et al., “Business Models Using the Flexibility of Heat Pumps - A Discourse,” 12th IEA Heat Pump Conference, 2017.

      European Commission, “Report from the Commission on on the Implementation of the Strategic Action Plan on Batteries: Building a Strategic Battery Value Chain in Europe,” European Commission, 2019, 17, https://ec.europa.eu/transparency/regdoc/rep/1/2019/EN/COM-2019-176-F1-EN-MAIN-PART-1.PDF.

    • Economic recovery is the immediate policy imperative –electrification must wait.

      Supporting electrification projects generates jobs and economic growth while also advancing Europe towards a low-carbon and sustainable economy.

      Investments and government programs aimed at reinvigorating the economy and generating jobs can also deliver against other social objectives. For example, by prioritising projects that bring Europe closer to a sustainable and low-carbon economy, both economic regeneration and climate action can be achieved simultaneously, an idea supported by European leaders.

      Public efforts to accelerate the electrification of sectors currently dominated by fossil fuels, such as road transport or heating and cooling, offer a clear opportunity because they can simultaneously deliver economic, social and environmental benefits.

      A public push for investments in charging infrastructure for road transport will stimulate jobs and activity across multiple sectors, while at the same time making it easier for people to cut emissions by switching to electric vehicles. Electrification efforts also provide an opportunity to deliver social objectives. For example, programmes aimed at providing citizens with electric heat pumps could be targeted towards poorer households, promoting social equality and increasing these groups’ disposable income by lowering heating costs. In this way, investments to electrify heat can simultaneously stimulate economic activity, create jobs, reduce energy poverty and cut climate gas emissions.

      References:

      Climate Home News (2020): European Green Deal must be central to a resilient recovery after Covid-19. Letter from 13 European Ministers of Environment published on April 9 2020. Available at https://www.climatechangenews.com/2020/04/09/european-green-deal-must-central-resilient-recovery-covid-19/

    • We should pursue energy efficiency rather than electrification.

      Efficiency should be pursued, but cannot eliminate emissions alone. Electrification offers an ideal partner to energy efficiency measures, often helping to improve efficiency and decarbonise residual energy demand in one step.

      Improvements in energy efficiency are critical in meeting Europe’s climate goals, but even the Commission’s ambitions 2030 scenarios, which achieve an energy efficiency target of 32.5%, result in a final energy demand for 2030 that is 84% of demand in 2020. Energy efficiency alone, therefore, cannot decarbonise the economy.

      Electrification provides an ideal partner to energy efficiency because it often both directly improves efficiency and decarbonises the remaining energy demand. Take electric vehicles for example. Conventional petrol vehicles convert 12-30% of the energy stored in the petrol to power at the wheels. Electric vehicles, in contrast, convert over 77% of the energy drawn from the grid to power at the wheels, an enormous efficiency gain. Nor is this, by any means, the only example. Modern gas boilers, for example, are capable of achieving impressive efficiencies approaching 90%. However, these are nothing compared to the roughly 300% efficiency achieved by air source heat pumps, which can output more heat than the actual amount of electricity consumed. These examples help to show just how powerful electrification can be as a means to improve energy efficiency while also enabling the complete decarbonisation of the remaining energy demand.

      References:

      European Commission, “Technical Note: Results of the EUCO3232.5 Scenario on Member States,” 6.

      U.S. Department of Energy, “All-Electric Vehicles,” accessed April 15, 2020, https://www.fueleconomy.gov/feg/evtech.shtml.

      Currie & Brown, “The Costs and Benefits of Tighter Standards for New Buildings,” 27–28.

    • Electrification will add to waste, for example from the use of batteries in transport.

      Nearly all electrical waste can be recycled and doing so is a great opportunity to provide Europe with valuable metals, new jobs and more sustainable value chains for electric vehicles.

      Nearly all electrical waste (e-waste) can be recycled often to the benefit of both the environment and the economy. In Europe, e-waste is strictly regulated to ensure safe treatment and enhance resource efficiency and the Commission sees further potential to increase the repairability and recyclability of electronic devices in the years to come.

      In addition to contributing to waste reduction, recycling of e-waste can also ensure that valuable materials are retrieved and reused. Some estimates set the value of the secondary raw materials from e-waste at €55 billion globally, including materials such as gold, silver, copper, platinum and palladium.

      A case in point is the batteries used in electric vehicles. For example, the lithium-ion batteries used in most of the EV market today contain valuable materials such as nickel, aluminium, cobalt and lithium. The European Commission notes that, by 2025, recycling car batteries could provide more of the rare and valuable metal cobalt than Europe’s combined domestic production. Building up this recycling supply chain in Europe would complement efforts to establish a world-leading industry for batteries and electric vehicles in Europe, as well as offering the potential for job generation.

      References:

      European Commission, “Waste Electronic Equipment - Environment - European Commission,” 2020, https://ec.europa.eu/environment/waste/weee/index_en.htm.

      European Commission, “Circular Economy Action Plan,” #EUGreenDeal, no. March (2020): 4, https://doi.org/10.2775/855540.

      C.P. Balde et al., The Global E-Waste Monitor 2017, United Nations University, 2017, https://doi.org/10.1016/j.proci.2014.05.148.

      Eleanor Drabik and Vasileos Rizos, Prospects for Electric Vehicle Batteries in a Circular Economy, Circular Impacts, 2018.

      European Commission, “Report from the Commission on on the Implementation of the Strategic Action Plan on Batteries: Building a Strategic Battery Value Chain in Europe,” European Commission, 2019, 17.

      N Hill et al., Circular Economy Perspectives for the Management of Batteries Used in Electric Vehicles Final Project Report, 2019, https://doi.org/10.2760/537140.

    • Extensive electrification would entail an unacceptable risk to European energy security.

      Electrification and renewable energy production strengthen energy security by helping to reduce Europe’s dependence on energy imports such as oil, gas and coal.

      Production of coal, lignite and gas has fallen over time in the EU, increasing the need to import energy resources to meet demand. As a result, the EU has depended on imports to cover more than half of its energy needs since 2004. The scale of the EU’s dependence on imports to provide its citizens with energy is worrying. This security risk is especially severe where critical supplies are provided by only a few suppliers, as is the case in several Central and East European member states.

      The EU has abundant renewable generation resources that can provide a safe supply of energy for almost any purpose, including heating, transport, cooking and powering all the appliances used in daily life. Electrifying the European economy can, therefore, reduce the EU’s dependence on energy imports.

      The value of electrification in improving security of supply is already recognised in EU strategy. For example, the European Commission’s EU Energy Security Strategy notes that, “Today, the EU is the only major economic actor producing 50% of its electricity without greenhouse gas emissions. This trend must continue. In the long term, the Union's energy security is inseparable from and significantly fostered by its need to move to a competitive, low-carbon economy which reduces the use of imported fossil fuels.” Similarly, the EU’s long-term climate strategy towards 2050 shows that exchanging fossil fuels with domestic decarbonised sources in the form of electricity, e-fuels and hydrogen leads to a 35 percentage point reduction of the share of energy demand that must be imported.

      References:

      Eurostat, “Energy Production and Imports - Statistics Explained,” 2019, https://ec.europa.eu/eurostat/statistics-explained/index.php/Energy_production_and_imports#More_than_half_of_EU-28_energy_needs_are_covered_by_imports.

      European Commission, “EU Energy Security Strategy,” no. COM(2014) 330 (2018): 1–23.

      European Commission;, “In-Depth Analysis in Support of the Commission Communication COM (2018) 773: A Clean Planet for All - A European Long-Term Strategic Vision for a Prosperous , Modern , Competitive and Climate Neutral Economy,” no. November (2018). The import dependency falls from a level of 55% in 2015 to 20% in 2050 in the net zero emission scenarios.

    • Guarantees of Origin are distorting the EU electricity market.

      Guarantees of Origin enable consumers to choose which types of generation to support. Far from distorting the market, they enable the market to efficiently reflect consumers’ actual preferences.

      A Guarantee of Origin is a certificate created alongside the production of renewable energy. By buying these certificates, consumers both provide additional income to the relevant generator and can uniquely claim to have purchased the associated energy. For example, if you’re a Dutch consumer and want to support Dutch wind farms through your power bill, you can do that. Your electricity supplier will purchase Guarantees of Origin to cover your demand from Dutch wind farms. Similarly, if you want to support new plants or those that meet strict environmental standards, you can do that too. The more popular the source of power, the higher the asking price for the Guarantees of Origin and the greater the revenue received by the generator.

      Guarantees of Origins ensure that consumers’ preferences are reflected in the way the market works. Attractive generators earn more. Guarantees of Origin for Dutch wind, using the example above, can cost around €3/MWh. This means both that attractive generators can afford to generate more, where this is an option, and that new investments in generation must take account of potential revenues reflecting consumers’ preferences. By incorporating consumer preferences, Guarantees of Origin are therefore correcting rather than distorting the market and ultimately support more efficient market outcomes.

      References:

      Oslo Economics, “Analysis of the Trade in Guarantees of Origin” (Oslo, 2017), figs. 2–8, https://www.energinorge.no/contentassets/ac0b5a4fc38b4111b9195a77737a461e/analysis-of-the-trade-in-gos.-oslo-economics.pdf.

  • Grid and technical
    • Extensive electrification implies prohibitive increases in network costs.

      Extensive electrification needn’t imply rising network charges. If we use the network smartly, costs per kWh can be kept stable or even reduced as part of an electrification strategy.

      Network charges need not increase with electrification provided that we use the network smartly and make use of cost efficiencies. Some network cost efficiencies will occur naturally, as the average costs of network equipment tend to fall as its size increases . However, some of the biggest potential sources of efficiency come from ‘flattening the curve’, as illustrated below. By retiming demand, existing infrastructure can be used effectively without incurring unnecessary investment. This retiming can be achieved, for example, by using network tariffs to encourage the retiming of vehicle charging or through energy service companies that adjust water tank heater demand to match network availability.

      By flattening the curve and taking advantage of natural economies of scale, more demand can be accommodated with lower investment requirements. Although the scale of these effects is uncertain, numerous studies and pilot projects have shown the significant potential of retiming demand:

      • A study in the UK found that a 10% reduction in peak demand could be achieved by employing time-of-use tariffs. Additionally, the Association for Decentralized Energy in the UK determined that a 16% peak reduction could be provided by businesses . Assuming that these reductions to residential and commercial peak demand are generally achievable, household network charges could remain the same or even slightly fall from their current levels even after accounting for the pressure to increase peak demand due to electrification from 40.5 €//MWh to 39.6 €/MWh
      • A study of the Czech Republic in the Interflex project found that by using EV smart charging stations, the need for transformer investments could be reduced by 46% . Assuming this level of savings and given the share of total costs linked to transformers, implies a 4-8% fall in overall household network charges for the affected consumers, from roughly 46 €/MWh today to around 42-44 €/MWh. (Without considering increase in the ratio of peak demand to total demand.)
      • A 2019 study in Norway found that, with efficient grid use, network costs would either stay the same or decrease from around 30 €/MWh to 20 €/MWh for household users over the period 2025-2040.
      • A study of France for the Grid4EU project found that by controlling electric heaters, residential peak demand could be reduced by 21% and businesses peak demand could be reduced by 6-9% . These reductions in peak demand would imply a 9-11% fall in network charges for the affected consumers. By taking into consideration the increase in peak demand from increased electrification, costs could go from roughly 50 €/MWh today, to around 47-48 €/MWh.

      Overall, therefore, electrification need not entail higher network costs per kWh. Provided policies are put in place to enable the more efficient use of the network, for example through time-of-use tariffs, network costs per kWh may actually decline.

      References:

      Econ Pöyry AS, Report 2008-129 Optimal Network Tariffs and Allocation of Costs Optimal Network Tariffs and Allocation of Costs Commissioned by the Norwegian Water Resources and Energy, 2008.

      HM Government and Ofgem, “Upgrading Our Energy System,” 2017.

      The Association for Decentralised Energy, “Demand Side Response,” accessed April 15, 2020, https://www.theade.co.uk/resources/what-is-demand-side-response.

      Jan Kula and Jan Svec, “Analysis of Smart Technical Measures Impacts on DER and EV Hosting Capacity Increase in LV and MV Grids in the Czech Republic in Terms of European Project InterFlex,” 2019.

      DNV GL, “Strømnettet i et Fullelektrisk Norge,” 2019, www.dnvgl.com.

      Grid4EU, “GRID4EU: Innovation for Energy Networks,” 2016.

    • Inverters, used for battery charging, harm the quality of the AC power supplied by the grid. Scaling up the number of inverters while maintaining grid supplies will prove a major challenge.

      Rather than posing a challenge to the grid, new inverters will be able to contribute to grid stability by controlling power flow, sensing faults and disconnecting from the grid when necessary.

      The standards defining the requirements for grid-connected assets are periodically revised and updated to deal with problems that may arise in the grid. The latest update of power inverter standards requires new inverters to contain grid supporting features that ensure reliability . Put simply, inverters were previously ‘dumb’, meaning that they only performed the function of converting from DC to AC without sensing what was happening in the grid.

      To comply with the updated standard however, inverters will need to be able to sense and adapt to grid disturbances, helping to stabilise the grid when needed and guaranteeing future supplies.

      References:

      Babak Arbab-Zavar et al., “Smart Inverters for Microgrid Applications: A Review,” Energies 12, no. 5 (2019), https://doi.org/10.3390/en12050840.

      Francisco Gonzalez-longatt, “IEEE 1547-2018 . Standard on Smart Inverters : Short Overview !,” no. February (2019), https://doi.org/10.13140/RG.2.2.28968.01282.

      Benjamin Kroposki, “Can Smarter Solar Inverters Save the Grid? - IEEE Spectrum,” 2016, https://spectrum.ieee.org/energy/renewables/can-smarter-solar-inverters-save-the-grid.

    • Electrification entails safety risks, for example, related to electrical fires.
  • Generation and supply
    • The scale of generation required isn’t feasible given the limited availability of space and raw materials.

      Research has shown that Europe’s renewable generation potential vastly exceeds its needs even accounting for limited available space. Although demand for some materials will be increased by electrification, this additional demand is expected to be met by improvements to the supply chain, recycling and the use of alternative materials.

      Although wind and solar power take up more space than conventional generation, modelling of land use needs shows that covering just 1% of European land would generate enough electricity to satisfy power demand. If 3% of the surface were used for solar PV, the EU’s entire energy demand could be supplied. While this might seem like a large number, ‘neglected surfaces’ such as industrial sites and parking lots could effectively alleviate the impact solar PV would have on the European landscape. In France alone, around 50 GW of solar PV could be built in such locations without impacting other land uses. In addition, the IEA estimates that the technical offshore wind potential of the European Union, explicitly considering geospatial restrictions, amounts to more than 36,000 TWh per year, more than 10 times current gross power demand in the EU. , This constitutes a legitimate alternative to land-based forms of renewable energy that would limit the spatial impact on the European landmass.

      Turning to the raw material requirements, the deployment of wind turbines, photovoltaic parks and EVs all depend on raw material use. In particular, neodymium, indium, lithium, cobalt and graphite are all used in the above sectors. According to IRENA , most rare earth minerals are not geologically rare. However, the supply chains used to source these materials are very complex and mining and refining is currently concentrated in only a few countries. Nevertheless, technological innovations, the use of alternative materials, recycling and circular design can all help to diversify the options available. To help avoid supply bottlenecks, the EU already has initiatives in place to secure the future supply of the key raw materials like these.

      References:

      P Ruiz et al., “ENSPRESO - an Open , EU-28 Wide , Transparent and Coherent Database of Wind , Solar and Biomass Energy Potentials,” Energy Strategy Reviews 26, no. September 2019: 100379, https://doi.org/10.1016/j.esr.2019.100379.

      ADEME, “Évaluation Du Gisement Relatif Aux Zones Delaissees et Artificialisées Propices à l’Implantation de Centrales Photovoltaïques - Synthèse”, Transénergie, March 2019.

      IEA, “Offshore Wind Outlook 2019: World Energy Outlook Special Report,” 2019.

      Eurostat, “Electricity Generation Statistics - First Results,” no. June 2019 (2019): 1–7.

      D. T. Blagoeva et al., Assessment of Potential Bottlenecks along the Materials Supply Chain for the Future Deployment of Low-Carbon Energy and Transport Technologies in the EU. Wind Power, Photovoltaic and Electric Vehicles Technologies, Time Frame: 2015-2030, 2016, https://doi.org/10.2790/08169.

      IRENA, “A New World - The Geopolitics of the Energy Transformation,” Global Commission on the Geopolitics of Energy Transformation, 2019.

      European Commission, “Study on the Review of the List of Critical Raw Materials,” 2017.

    • Renewable generation cannot be ramped up to meet peak demand, meaning that fossil-fuel backup capacity will still be required.

      New ways to store energy are enabling larger shares of generation to be sourced from variable generation technologies like wind and solar. Despite the variability in these renewable sources of generation, it should be possible to eliminate fossil-fuel backup relatively fast.

      Wind and solar generation produce electricity when the wind blows and the sun shines and cannot be steered in the same way as traditional ‘dispatchable’ resources, like fossil fuel power plants, to meet changes in power demand. To make up for their volatile output, a variety of approaches are being used to store energy from the time it is generated, to the time it is needed. This includes storing energy in hydro reservoirs, in batteries (like those used in electric vehicles), as heat (in hot water tanks distributed in homes and business) and in e-fuels (like hydrogen). By drawing on these forms of storage, as well as on consumers’ inherent ability to retime certain forms of consumption, like the running of refrigerators, the system can be made more flexible. This flexibility can be used to predict and meet the overall need for power without the need for the construction of back-up generation capacity.

      The integration of variable sources of renewable generation will also be supported naturally by improving interconnection in the power system and by sector coupling. Wind speeds vary across the Continent, and as Europe’s power system becomes more interconnected surpluses in one region can be used to meet needs elsewhere, thereby alleviating the need for backup capacity. Sector coupling, meanwhile, strongly increases the access to flexible sources of demand, such as smart electric vehicle charging or price-responsive industrial demand. By combining these features of a future system with power storage technologies like hydrogen, which can be used to store and then generate power, it should be possible to entirely eliminate the need for fossil-fuel backup capacity for renewable generation.

      References:

      IRENA, "Power System Flexibility for the Energy Transition", 2018, https://doi.org/10.13140/RG.2.2.11715.86566.

      NERA, Imperial College London, KEMA, “Integration of Renewable Energy in Europe,” no. June (2014): 236, https://ec.europa.eu/energy/sites/ener/files/documents/201406_report_renewables_integration_europe.pdf.

      IRENA, “From Baseload to Peak : Renewables Provide a Reliable Solution,” 2015, http://www.irena.org/DocumentDownloads/Publications/IRENA_Baseload_to_Peak_2015.pdf.

      IRENA, Power System Flexibility for the Energy Transition.

      Fraunhofer IWES, “The European Power System in 2030: Flexibility Challenges and Integration Benefits. An Analysis with a Focus on the Pentalateral Energy Forum Region,” 2015, 1–88.

      Steinberg et al., “Electrification and Decarbonization: Exploring U.S. Energy Use and Greenhouse Gas Emissions in Scenarios with Widespread Electrification and Power Sector Decarbonization.”

      IRENA, Power System Flexibility for the Energy Transition.

    • Enormous quantities of generation will need to be curtailed and thus wasted.

      New forms of storage and demand-response will help the system to absorb surpluses in variable renewable generation without resorting to curtailment.

      Curtailment happens when there is more wind or solar output than the system can absorb, either due to insufficient demand or insufficient transmission capacity. By enabling local demand to take advantage of this oversupply, storage technologies (like batteries) and demand response technologies (like the smart charging of EVs), help to ensure that this power has somewhere useful to go and thereby limit the need for curtailment.

      Reinforcement of the power grid can also help ensure that this power can reach those that can use it. The planned north-south transmission infrastructure in Germany is expected to transport wind from the wind-rich north to the demand centres in the south. These grid upgrades are expected to profoundly reduce the costs associated with curtailment. An alternative to new transmission, if the former is not viable from an economic or public acceptance perspective, is to build renewable generation at sites closer to consumption in order to reduce the need for grid expansion. Such a measure can be supported through appropriate policy and decentralised power market design.

      References:

      CAISO, “Managing Oversupply-Solutions,” 2017, http://www.caiso.com/Documents/ManagingOversupply-Solutions.pdf.

      Xiaohe Yan et al., “Power to Gas: Addressing Renewable Curtailment by Converting to Hydrogen,” Frontiers in Energy 12, no. 4 (2018): 560–68, https://doi.org/10.1007/s11708-018-0588-5.

      Jennie Jorgensen, Trieu Mai, and Greg Brinkman, “Reducing Wind Curtailment through Transmission Expansion in a Wind Vision Future,” no. January (2017): 38, https://www.nrel.gov/docs/fy17osti/67240.pdf.

      Agora Energiewende, “Cost Optimal Expansion of Renewables in Germany,” 2013.

      Michael Joos and Iain Staffell, “Short-Term Integration Costs of Variable Renewable Energy: Wind Curtailment and Balancing in Britain and Germany,” Renewable and Sustainable Energy Reviews 86, no. February 2017 (2018): 45–65, https://doi.org/10.1016/j.rser.2018.01.009.

      Felix Böing, Andreas Bruckmeier, Timo Kern, Alexander Murmann, Christoph Pellinger, “Reliving the German Transmission Grid with Regulated Wind Power Development,” 2017, 1–15.

    • Full-scale electrification would require the construction of new nuclear capacity.

      Full-scale electrification would not require the construction of new nuclear capacity. The economics of wind and solar power currently favour them as major sources of new generation capacity and the generation potential of alternative technologies are sufficient to satisfy increased total electricity demand.

      Ultimately, the significant existing potentials of renewable generation technologies such as wind and solar PV mean that full-scale electrification could be achieved without the use of new nuclear. , Furthermore, following dramatic declines in the costs of wind and solar generation, these technologies are now, in many places, cheaper than conventional fossil generation and therefore likely to be preferred to future nuclear investments. Solar PV costs fell between 66-80% between 2010 and 2018, and further cost reductions, albeit likely on a lower level, are expected to continue. With adequate instruments available to secure the integration of a high share of renewables in the power system, it is therefore reasonable to assume that renewables will play the major role in satisfying an increased need for electricity.

      References:

      Ruiz et al., “ENSPRESO - an Open , EU-28 Wide , Transparent and Coherent Database of Wind , Solar and Biomass Energy Potentials.”

      IEA, “Offshore Wind Outlook 2019: World Energy Outlook Special Report.”

      IRENA, “Renewable Power Generation Costs in 2018” (Abu Dhabi, 2019), 9, https://www.irena.org/-/media/Files/IRENA/Agency/Publication/2019/May/IRENA_Renewable-Power-Generations-Costs-in-2018.pdf.

      IRENA, Power System Flexibility for the Energy Transition.

    • Full-scale electrification would require the construction of new generation capacity, like hydropower, that would entail irreparable damage to the environment.

      Electrification yields major environmental benefits but, like all decarbonisation strategies, it also involves investment activity that might seem to compromise environmental objectives. In reality, these impacts are, however, far lower than many realise.

      While electrification yields clear environmental benefits, the sector’s activities also impact the environment. For example, renewable power generation has a comparatively high land-use impact given its need for space. However, wind parks are often built on land that is already and will continue to be used for agriculture and when plants are decommissioned, no lasting impacts on the landscape remain. The same is true for solar installations, which also benefit from the ability to fully recycle 90% of panels. A majority of negative impacts associated with hydropower can be alleviated through integrated planning, restoration and mitigation measures, and fish protection facilities and downstream fishways, minimum flows and debris and sediment management can all be implemented to minimise the ecological impacts of plants.

      In general, the environmental impacts of new renewable generation can be contained through careful site selection, the intelligent use of environmental impact assessments and by including key stakeholders into the planning process. Solutions to minimise their impact exist, are further being researched and are, without a doubt, less harmful than the continued use of fossil fuels.

      References:

      Peter Berrill et al., “Environmental Impacts of High Penetration Renewable Energy Scenarios for Europe,” Environmental Research Letters 11, no. 1 (2016), https://doi.org/10.1088/1748-9326/11/1/014012.

      Government of New South Wales, “The Wind Energy Fact Sheet,” 2010.

      Garvin Heath et al., “Life Cycle Inventory of Current Photovoltaic Module Recycling Processes in Europe Life Cycle Inventory of Current Photovoltaic Module Recycling Processes in Europe,” 2017.

      Arcadis and Ingenieurbüro Floecksmühle, “Hydropower Generation in the Context of the EU WFD Contract N ° 070307 / 2010 / 574390 EC DG Environment Project Number 11418 | Version 5”, 2011.

      European Commission, “Science for Environment Policy Future Brief : Wind & Solar Energy and Nature Conservation,” European, no. 9 (2014), https://doi.org/10.2779/54142.

  • Transport
    • Electricity isn’t a viable means to power trucks, ships and planes.

      Electricity is already powering lorries and ships. Electric planes are now entering the market. Future improvements in battery technology will further extend the range of transport operations that can be directly electrified.

      The development of battery technology is key to the electrification of larger modes of transport, such as trucks, ships and planes. In recent years, electrification has begun in these segments due to remarkable improvements in battery technology.

      Electric medium freight trucks with lower range requirements, typically for urban transport, are now available in the market and are being used for commercial activity. The energy requirement of these trucks is compatible with the capacity of existing battery technologies. Currently, the market for electric trucks is small compared to conventional trucks, but it is expected to accelerate in the 2020s. ,

      There are ongoing demonstration projects for heavier electric trucks and further improvements in battery technology will increase both these vehicles’ range and size, extending the range of transport operations that electric logistics can cover.

      Electric propulsion is already available for smaller ships that travel shorter routes and that can be recharged frequently, such as ferries, passenger ships and small cargo ships. However, deep-sea shipping will remain unsuitable for electric propulsion in the foreseeable future due to current limitations in battery capacity.

      Several small electric planes have already been successfully demonstrated, and a two-seater plane is already available on the market. Current battery technology allows planes with up to 19 seats and a range of 350-400 km, and planes of this category are expected to be available on the market within the next 10-20 years. Given this, Norway aims to electrify the first commercial route by 2030, and to fully electrify all short-haul flights by 2040. There are also examples of somewhat bigger electric planes that have been announced, such as Wright Electric’s Wright aircraft with 186 seats and a range of at least 560 km. Wright Electric is aiming to have the aircraft in commercial service by 2030.

      For long-haul trucks, long-distance aircraft and deep-sea shipping, battery electrification is unlikely to be immediately achievable. However, even here, electricity could still play an important role through the production of e-fuels like methane, methanol, ammonia and hydrogen.

      References:

      Kyle Field, “Clean Technica,” Clean Technica, 2020, https://cleantechnica.com/2020/02/19/bloombergnef-lithium-ion-battery-cell-densities-have-almost-tripled-since-2010/.

      IEA, “The Future of Trucks – Implications for Energy and the Environment,” International Energy Agency, 2017.

      Bloomberg New Energy Finance, “Electric Vehicle Outlook,” Electric Vehicle Outlook 2019, 2019, https://bnef.turtl.co/story/evo2019/page/6/1.

      Till Bunsen et al., “Global EV Outlook 2019 to Electric Mobility,” OECD Iea.Org, 2019, 232, www.iea.org/publications/reports/globalevoutlook2019/.

      IEA, “The Future of Trucks – Implications for Energy and the Environment.”

      DNV GL Maritime, “Reduksjon Av Klimagassutslipp Fra Skipsfarten,” 2016.

      DNV GL - Maritime, “Assessment of Selected Alternative Fuels And,” vol. 391, 2019, http://www.imo.org/en/KnowledgeCentre/IndexofIMOResolutions/Maritime-Safety-Committee-(MSC)/Documents/MSC.391(95).pdf.

      Till Bunsen et al., “Global EV Outlook 2019 to Electric Mobility.”

      Luftfartstilsynet Avinor, “Forslag Til Program for Introduksjon Av Elektrifiserte Fly i Kommersiell Luftfart,” 2020.

      Leigh Collins, “SPECIAL REPORT | Can Renewables Make Airlines Carbon-Free by 2050?,” Recharge, 2020, https://www.rechargenews.com/transition/special-report-can-renewables-make-airlines-carbon-free-by-2050-/2-1-778590.

      Avinor, “Forslag Til Program for Introduksjon Av Elektrifiserte Fly i Kommersiell Luftfart.”

      DNV GL - Maritime, “Assessment of Selected Ternative Fuels And,” Imo 391, no. June (2019): 1–48.

    • Electric vehicles are only practical for short-distance transport.

      Driving ranges of electric passenger cars now exceed 600 km and can thus cover the majority of trips made by Europeans.

      Over the past decade, we have seen a significant improvement in battery technology, with energy densities almost tripling since 2010. This has allowed increased driving ranges and current models have ranges exceeding 600 km. This demonstrates that electric vehicles are no longer limited to short-distance transport. Furthermore, since more than 80% of motorists across Europe drive less than 100 km in a typical day, electric cars can already cover most trips without the need to charge on route.

      Heavier vehicles, such as trucks, have shorter ranges due to the capacity constraints of batteries. However, further advances in battery technology will allow for longer ranges in these segments. For those vehicles that are hard to electrify directly at present, due to weight and range requirements, e-fuels may be an appropriate solution.

      References:

      Kyle Field, “Clean Technica,” Clean Technica, 2020, https://cleantechnica.com/2020/02/19/bloombergnef-lithium-ion-battery-cell-densities-have-almost-tripled-since-2010/.

      Sunday Times Driving, “10 ELECTRIC CARS WITH 292 MILES OR MORE RANGE TO BUY INSTEAD OF A DIESEL OR PETROL,” 2020, https://www.driving.co.uk/news/10-electric-cars-248-miles-range-buy-instead-diesel-petrol/.

    • Current market mechanisms cannot provide sufficient charging infrastructure for electric transport.

      At present, most of Europe has sufficient charging infrastructure to support the relatively small EV fleet. Private actors are already heavily involved in the provision of Europe’s charging infrastructure and future investment needs will increasingly be provided directly by such actors without the need for public subsidy. These market actors have a strong commercial incentive to make sure that future demand for this infrastructure is met.

      At the start of 2020, there was, on average, one public charging point for every seven electric vehicles, better than the EU guideline level of one per every ten vehicles. Indeed, only four Member States (Cyprus, Finland, Greece and Sweden) fail to meet this target level. Network coverage is also good and, for the fast-charging network specifically, Transport & Environment conclude that “a good comprehensive coverage is provided in most Member States ... and very few gaps persist”.

      Although legislation and public subsidy have played an important role in ensuring the sufficiency of Europe’s current charging infrastructure, and were especially important when the electric vehicle market was in its infancy, it is important to appreciate that private investment has played a large and growing role in developing the charging network. 79% of charging points in Europe are operated by oil and gas utilities , with Shell (NewMotion) alone owning or operating more than 74,000 of Europe’s roughly 235,000 charging points. These and other firms are investing substantial sums to position themselves in the growing charging market. In 2019, for example, Iberdrola invested €15 million in a charging point manufacturer as part of a plan to roll out 25,000 chargers in Spain by 2021 and £35 million of private funds were invested in a private charging network in the UK to install over 2,000 rapid charging points.

      As the number of EVs grows, the business case for investment in charging points improves and the need for public subsidy is expected to diminish. There are already multiple examples of public charging infrastructure being deployed without public money and, for those European countries with higher electric vehicle penetrations, Transport & Environment expect the need for public subsidy to “gradually phase-out in the 2020-2025 period”. As charging point provision becomes viable on commercial terms, we should expect new and existing commercial providers to roll out infrastructure to meet increased demand given the commercial incentives they already face to do so.

      References:

      Transport & Environment, “Recharge EU: How Many Charge Points Will Europe and Its Member States Need in the 2020s” (Brussels, 2020), 12, https://www.transportenvironment.org/sites/te/files/publications/01 2020 Draft TE Infrastructure Report Final.pdf.

      Brian Eckhouse, David Stringer, and Jeremy Hodges, “The World Still Doesn’t Have Enough Places to Plug In Cars - Bloomberg,” Bloomberg, February 14, 2019, https://www.bloomberg.com/news/features/2019-02-14/the-world-still-doesn-t-have-enough-places-to-plug-in-cars.

      Elchin Mammadov, “Electric Vehicles Won’t Be Panacea for Utilities,” Bloomberg Intelligence, March 19, 2019, https://www.bloomberg.com/professional/blog/electric-vehicles-wont-panacea-utilities/.

      Raquel Soat, “Global EV Charging Infrastructure Investments Are On the Rise,” August 27, 2019, https://guidehouseinsights.com/news-and-views/global-ev-charging-infrastructure-investments-are-on-the-rise.

      Transport & Environment, “Roll-out of Public EV Charging Infrastructure in the EU Is the Chicken and Egg Dilemma Resolved?,” 2018, 13, https://www.transportenvironment.org/sites/te/files/publications/Charging Infrastructure Report_September 2018_FINAL.pdf

    • The mass use of electric transport is impossible without technological standardisation.

      Standards for electric road vehicle charging infrastructure are already in place. For other electric modes of transport, such as aircraft and ships, work to establish such standards is already underway.

      Standards are already in place for electric vehicle charging infrastructure covering passenger cars, light-duty vans and trucks, which cover both physical connectors and communication protocols. As such, a lack of standardisation is not considered to be a barrier to the widespread deployment of electric vehicles. The European Commission has decided on an EU standard physical connector for both slow and fast charging and many fast-charging stations support multiple connectors to ensure that even legacy non-standard vehicles can charge.

      The ISO15118 communication protocol has also been agreed and enables, among other things, smart charging, in which the energy demand from the vehicles is matched to grid capacity, and vehicle to grid flows. ISO 15118’s Plug & Charge capability also enables the EV to automatically identify itself when connecting to the charging station. This means that the only thing the driver needs to do is to plug in the charger. Other forms of identification such as RFID or mobile apps are no longer needed.

      Standards are not yet in place for electric ships and electric aircraft due to their lower technical maturity. However, work is underway to establish standards for these modes of transport as well.

      References:

      M. Spöttle et al., “Research for TRAN Committee – Charging Infrastructure for Electric Road Vehicles,” 2018, https://doi.org/10.2861/62486.

      “What Is ISO 15118?,” V2G Clarity, 2019, https://v2g-clarity.com/knowledgebase/what-is-iso-15118/.

    • Electric vehicles pose a greater fire safety risk than conventional transportation.

      Research shows that electric vehicles are less likely to result in a fire than vehicles that use conventional fuels.

      According to researchers at the Swedish research institute RISE, electric vehicles are a lower fire safety risk than conventional transportation.

      Similarly, the Norwegian Directorate for Civil Protection’s (DSB) investigation of car fires in Norway in the period between 2016 and 2019 shows that, adjusting for the number of vehicles, conventional petrol and diesel vehicles result in fires four to five times more often than electric vehicles. Research for the National Highway Traffic Safety Administration in the US also concluded that the propensity and severity of fires from electric vehicles are comparable to, or possibly slightly less, than those of gasoline or diesel vehicles. However, electric vehicle fires are different than fires in conventional petrol and diesel vehicles. Electric vehicle fires take more time to ignite after an accident, and can be difficult to extinguish. Therefore, appropriate fire service training to understand and respond to these differences is needed.

      References:

      Rune Korsvoll, “Brann i Biler Elbiler Brenner Ikke Oftere,” dinside.no, 2020, https://www.dinside.no/motor/elbiler-brenner-ikke-oftere/72229104.

      Mark Hovis, “Are EVs More Or Less Likely To Catch Fire Than Combustion Engined Cars?,” 2018, https://insideevs.com/news/341441/are-evs-more-or-less-likely-to-catch-fire-than-combustion-engined-cars/.

    • Car manufacturing jobs will be put at risk.

      E-mobility will inevitably transform the automotive sector but could also increase overall employment in European companies if Europe successfully establishes its global leadership in the sector’s electrification.

      Global efforts to achieve the targets of the Paris agreement mean that electric vehicles are already transforming the automotive sector and becoming an increasingly important part of the fleet produced by global carmakers. This change could happen relatively quickly, with some estimates putting the number of electric vehicles on European roads at 33-40 million by 2030.

      This transition could lead to increased employment in Europe if we take global leadership in the growing value chains associated with electric mobility. Transport & Energy cite research that, in 2030, European employment could increase by 500 000-850 000 as a result of shift to electric vehicles, with limited or no job losses in the automotive sector, due to the massive reduction in the EU’s oil export bill and the macroeconomic dividend that this brings.

      To ensure that European employees benefit the most from the transition to sustainable road transport, a world-leading and competitive value chain for electric vehicle parts must be developed in Europe. , A clear European strategy on electrification, with an awareness of the industrial strategy opportunities, could help achieve this goal.

      Concerted efforts to achieve leadership is already being made by the EU in the areas of battery production and technology. This represents a strategic opportunity to build up new industry in Europe, secure “high value jobs and increase economic output”. Indeed, the Commission cites estimates of the European market potential of € 250 billion annually from 2025.

      References:

      Transport & Environment, “Recharge EU: How Many Charge Points Will Europe and Its Member States Need in the 2020s.”

      Transport & Environment, “How Will Electric Vehicle Transition Impact EU Jobs?,” no. September (2017).

      Nikolas Hill et al., “Assessing the Impacts of Selected Options for Regulating CO2 Emissions from New Passenger Cars and Vans after 2020,” Final Report for the European Commission, DG Climate Action 4, no. 6 (2018).

      European Commission, “Report from the Commission on on the Implementation of the Strategic Action Plan on Batteries: Building a Strategic Battery Value Chain in Europe,” 2019.

  • Costs, Benefits and Distributional Impacts
    • The costs of electrification outweigh the benefits.

      The benefits of tackling climate change significantly outweigh the costs of inaction and, among the options available to decarbonise the economy, electrification is often the cheapest.

      The benefits of tackling climate change have been shown to exceed the costs of action by a substantial margin. Identifying the least-cost approach is difficult, but several systemic studies clearly show the enormous role that ought to be played by electrification.

      A good example of this is the Commission’s own 2018 analysis of scenarios to reduce emissions by between 80-100% by 2050. All of these scenarios show electricity becoming the dominant energy carrier. Under the scenario intended to reflect cost-efficient measures to achieve a 2°C target, electricity’s direct share of final energy demand more than doubles between 2015 and 2050, and is larger still when one accounts for the role of e-fuels. Electricity’s direct share is also larger when more ambitious climate targets are assumed.

      Given the enormous role expected of electrification in such attempts to define cost-effect action, and the significant costs of climate change, the benefits of electrification would exceed the costs.

      References:

      Nicholas Stern, The Economics of Climate Change: The Stern Review, The Economics of Climate Change: The Stern Review, 2007, https://doi.org/10.1017/CBO9780511817434.

      European Commission, “IN-DEPTH ANALYSIS IN SUPPORT OF THE COMMISSION COMMUNICATION COM(2018) 773: A Clean Planet for All A European Long-Term Strategic Vision for a Prosperous, Modern, Competitive and Climate Neutral Economy,” fig. 20.

    • At some point, further electrification won’t be cost-effective.

      Electricity is already the dominant energy carrier in every European Commission decarbonisation scenario. That does not mean that every single energy use solution should be electric. With declines in the costs of low-carbon generation having consistently beat expectations, it is reasonable to believe that least-cost decarbonisation will entail even more electrification than presently envisaged.

      All decarbonisation pathways for the EU already involve considerable electrification. In the European Commission’s 2018 analysis of pathways to 2050, which examined eight different potential scenarios, electricity becomes the dominant carrier in final consumption in every one, including those designed to specially emphasise the use of alternative fuels like hydrogen. In the cost-effective scenario (consistent with a roughly 90% reduction in emissions) electricity goes from making up 22% of final energy consumption in 2015, to close to half of all consumption in 2050. The more ambitions emission reductions scenarios examined involve even more electrification.

      Of course, estimating a cost-effective pathway to 2050 is fraught with difficulty and, among other challenges, long-term modelling has consistently underestimated the declines in the cost of low carbon generation. Given that solar PV costs fell between 66-80% between 2010 and 2018, this failing is perhaps understandable. However, it also points to that fact that electrification’s cost-effective contribution to decarbonisation, already acknowledged to be significant, may well be larger than currently envisioned.

      References:

      European Commission, “IN-DEPTH ANALYSIS IN SUPPORT OF THE COMMISSION COMMUNICATION COM(2018) 773: A Clean Planet for All A European Long-Term Strategic Vision for a Prosperous, Modern, Competitive and Climate Neutral Economy," 72.

      IRENA, “Renewable Power Generation Costs in 2018,” 45.

    • Electrification, and especially the electrification of transport and domestic heating, imposes unjust costs on those least able to pay.

      Nothing about electrification requires that costs be loaded on those least able to pay. Indeed, with appropriate policy design, efforts to electrify the economy could actually support low-income households and reduce inequality.

      Recent research into the social impacts of climate policy has shown that decarbonisation policies, like the electrification of transport and domestic heating, can be used to reduce inequality with appropriate policy design. In particular, measures can be designed specifically to target low-income households and funded using mechanisms that avoid taxes or charges on essential goods like electricity. Policy measures can also be paired with compensating changes to tax policy to ensure that effective climate policies don’t disadvantage vulnerable groups. Numerous practical examples of this approach already exist in the context of energy efficiency policy, with households in receipt of social welfare often eligible for additional support. Such approaches could be readily adapted to ensure that electrification helps the poorest households. Put simply, how the costs and benefits of electrification are distributed is ultimately a question of policy and the options already exist to ensure that electrification benefits low-income families and reduces inequality.

      Reference:

      Georg Zachmann, Gustav Fredriksson, and Grégory Claeys, “The Distributional Effects of Climate Policies” (Brussels: Bruegel, 2018), https://www.bruegel.org/wp-content/uploads/2018/11/Bruegel_Blueprint_28_final1.pdf

    • Electrification would require excessive public subsidy.

      The investment needed to decarbonise the economy, whether through electrification or by other means, can be stimulated through a variety of policies and need not be publicly funded.

      Private investments in low-carbon technologies can be driven by a variety of public policies including the use of standards, planning policy, taxes, quota schemes and subsidies. Multiple different policy options can be used to drive the same investment. Consequently, there is nothing about electrification that requires the use of public subsidy.

      Indeed, the role of subsidies in driving investment may be limited for reasons unrelated to the budgetary impact. A growing body of work has shown that people often do not respond as expected to financial incentives and that, as such, subsidies can be inefficient at motivating household investment. Factors like this help to underpin renewed interest in non-subsidy measures, like the proposed ban on the sale on conventional cars in at least seven EEA member states.

      Reference:

      See, for example, Elisha R. Frederiks, Karen Stenner, and Elizabeth V. Hobman, “Household Energy Use: Applying Behavioural Economics to Understand Consumer Decision-Making and Behaviour,” Renewable and Sustainable Energy Reviews (Elsevier Ltd, 2015), https://doi.org/10.1016/j.rser.2014.09.026.

    • It would be better to reuse our existing natural gas infrastructure, for example, to transport hydrogen.

      Unfortunately, existing natural gas infrastructure will, in many cases, not be suitable for use with hydrogen and the costs of converting this infrastructure may well exceed those of direct electrification.

      It is natural human instinct to want to continue pushing projects into which one has invested time and money even after they cease to be the right choice. So common, in fact, that it has many names – such as the sunk cost or concord fallacy. However, the large investments made in natural gas infrastructure historically should not fool one into thinking that it must be the lowest cost option going forward.

      The reality is that natural gas infrastructure is, in many cases, exactly that – natural gas infrastructure that cannot be used for hydrogen. Some of the most important challenges to appreciate in this regard are that the metal pipes used to transport natural gas cannot be safely used to transport hydrogen and that the natural gas appliances attached to the gas network cannot be used with hydrogen.

      For the pipes, the key problem is so-called hydrogen embrittlement. Metal pipes tend to become susceptible to cracks when exposed to hydrogen and, consequently, the metal infrastructure used to transport natural gas cannot generally be used to safely transport hydrogen. For appliances, differences in the combustion characteristics of natural gas and hydrogen mean that, in many cases, consumers’ appliances would anyway need to be replaced or retrofitted. This is not only costly but poses a significant coordination and safety challenge, as retrofits must be coordinated with the changes to the network to ensure safe, continued service, potentially implying mass street-by-street refits.

      Overall, therefore, it is important to realise that the existing natural gas network does not represent free hydrogen infrastructure and direct electrification will, in many cases, be cheaper than the use of hydrogen.

      Reference:

      Frazer-Nash Consultancy, “Appraisal of Domestic Hydrogen Appliances,” 2018, https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/699685/Hydrogen_Appliances-For_Publication-14-02-2018-PDF.pdf

    • Hydrogen is the better technology for energy storage.

      The energy system’s storage requirements vary and, as such, a range of solutions are likely to be required.

      Some of the key differences between storage technologies are the time for which energy can be stored, how much energy can be stored, and how fast that energy can be released. For some applications, battery technologies provide the best approach, especially when power is required quickly, such as when responding to an unexpected outage on the grid . However, batteries are not cost-effective for storing large amounts of energy over long periods. Here, technologies like pumped hydro or reservoir storage shine, allowing large amounts of energy to be stored over long periods at little marginal cost. In Norway, for example, reservoir storage represents about 70% of annual consumption, making energy available even when precipitation levels are low.

      In some situations, the need for storage can be removed altogether by retiming demand, for example by charging EVs when supply is available, or increasing interconnection, such that energy can be moved somewhere that it can be used immediately.

      Hydrogen also has some natural applications. It may form a critical role, for example, in allowing us to usefully store excess renewable generation when renewable output is high and cheaper alternatives for long-term storage are unavailable. In this way, the use of hydrogen for storage may well be an important element of an overall electrification strategy. However, it currently represents only a tiny portion of hydrogen production and the provision a meaningful contribution to storage requirements is at least a decade away.

      References:

      Statkraft and Matthias Holzenkamp, “Renewable: Balancing with Batteries | Explained,” Explained by Statkraft, accessed April 16, 2020, https://explained.statkraft.com/articles/2018/renewable-balancing-with-batteries/.

      Ministry of Petroleum and Energy, “Electricity Production - Energifakta Norge,” accessed May 4, 2020, https://energifaktanorge.no/en/norsk-energiforsyning/kraftproduksjon/.

      Wood Mackenzie, “Green Hydrogen: A Pillar Of Decarbonization?,” Forbes, January 31, 2020, https://www.forbes.com/sites/woodmackenzie/2020/01/31/green-hydrogen-a-pillar-of-decarbonization/.

      World Energy Council, “E-Storage: Shifting from Cost to Value Wind and Solar Applications,” 2016, www.worldenergy.org

    • District heating is a better means to decarbonise heat supply than electrification.

      The decarbonisation of heat will require zero-emission heat sources irrespective of whether heat is delivered via district heating or produced onsite. In fact, electrification and district heating are likely to increasingly be used in combination to try and realise the benefits of both.

      A decarbonised energy system will need a decarbonised supply of heat. Although district heating can be useful in making use of otherwise wasted heat, the widespread use of district heating will rely on the ability to generate zero-carbon heat, often for use in densely populated urban areas where air pollution concerns are critical. Electrification can, therefore, be expected to play an important role in the future of district heating for several reasons.

      First, modern heat networks do not distribute heat at high temperatures. Doing so is expensive, both because more heat tends to be lost in transit and because the infrastructure costs involved in combatting these losses are greater. Rather they distribute heat at low temperatures that is then used by electric heat pumps to supply higher temperature heat to end-users. As such, incorporating heat pumps directly into the network infrastructure can improve the flexibility and efficiency of the heat network.

      Second, large-scale heat pumps are already used as a source of initial heat supply by some heat networks. Doing so enables useful heat to be gathered from ubiquitous low-temperature sources of industrial waste heat. Using these pumps, excess power generation can effectively be stored as heat in the heat network for later use.

      As a result, electrification and district heating are natural complements and can usefully be applied in tandem where conditions support the use of heat networks.

      References:

      Simone Buffa et al., “5th Generation District Heating and Cooling Systems: A Review of Existing Cases in Europe,” Renewable and Sustainable Energy Reviews 104 (April 1, 2019): 504–22, https://doi.org/10.1016/j.rser.2018.12.059.

      Helge Averfalk et al., “Large Heat Pumps in Swedish District Heating Systems,” Renewable and Sustainable Energy Reviews 79 (November 1, 2017): 1275–84, https://doi.org/10.1016/j.rser.2017.05.135.

    • Any health benefits from electrification are minor.

      Emissions from road transport and fossil-fuel heating result in tens of thousands of premature deaths in the EU-28 each year. By reducing harmful emissions, electrification could realise annual health benefits in excess of €62 billion.

      Road transport and fossil-fuel heating are major sources of air pollution and, because these sources are concentrated in the areas where people live and work, they have a disproportionality large impact on public health. The health consequences of air pollution are well-documented. Exposure results in reduced lung function, repository infections and aggravated asthma, and maternal exposure has been linked to numerous adverse effects on pregnancy and new-borns. Furthermore, because exposure is so widespread, the scale of the aggregate health impacts are staggering. The European Environment Agency estimates that NO2 emissions alone, 39% of which come from road transport, contribute to about 68,000 premature deaths a year in the EU-28, with around 682,000 years of life lost. Other pollutants that would also be alleviated by electrification, notably particulate matter, contribute to even larger negative health impacts.

      A separate study into the health impacts of road transport emissions concluded that, assuming an additional year of life was worth around €70,000, the health costs associated with road transport pollution in the EU-28 in 2016 amounted to €62-80 billion. Given electrification’s potential to reduce harmful emissions from a large number of sectors, not limited to road transport, and the fact that electrification can reduce emissions from those sources to which people are directly exposed, it is reasonable to assume that these road transport estimates reflect the low end of the health benefits that could be achieved through extensive electrification.

      References:

      European Environmental Agency, Air Quality in Europe — 2019 Report — EEA Report No 10/2019, 2019, 14, figs. 2.4, 10.1-10.2 https://doi.org/10.2800/822355.

      CE Delft, “Health Impacts and Costs of Diesel Emissions in the EU,” 2018, 46, www.cedelft.eu.

  • Market Mechanisms
    • Electricity bills will rise.

      Electrification can help lower bills through a combination of lower prices and increased energy efficiency.

      Additional power generation will necessarily be a part of a deep electrification strategy and the addition of more plants and more power will tend to pull prices down. Indeed, the impact of new wind and solar plants in Germany means that wholesale power prices there now routinely hit zero during windy periods, and there is plenty of research showing that new renewable generation has pushed down power prices both in Europe and beyond. Even back in 2011-13, detailed analysis of the German system shows that market prices would have been 5.29 ct/kWh higher had it not been for the additional power supplied from wind and solar.

      The costs of these fuel-free power sources have also been falling dramatically and are now cheaper than conventional fossil generation in many places. Solar PV costs have fallen between 66-80% between 2010 and 2018. With this track record and the promise of further low-carbon power cost reductions in future, we may well see the average price of power fall as part of a comprehensive strategy to decarbonise through electrification.

      Finally, even in the event that prices do not fall, bills can be lowered through the improvements to energy efficiency resulting from electrification. This is particularly the case for electric vehicles and electric heat pumps, which are both substantially more energy efficient than their fossil fuel equivalents. Air source heat pumps, for example, can output more heat than the actual amount of electricity consumed and achieve efficiencies of around 300%, relative to efficiencies approaching 90% for a modern gas boiler, as heat is lost through the exhaust gases.

      As a result of these factors, electrification can actually help to lower consumer bills.

      References:

      Jorge Blazquez et al., “The Renewable Energy Policy Paradox,” Renewable and Sustainable Energy Reviews, 2018, https://doi.org/10.1016/j.rser.2017.09.002.

      Marius Dillig, Manuel Jung, and Jürgen Karl, “The Impact of Renewables on Electricity Prices in Germany – An Estimation Based on Historic Spot Prices in the Years 2011–2013,” Renewable and Sustainable Energy Reviews 57 (May 1, 2016): 7–15, https://doi.org/10.1016/j.rser.2015.12.003.

      IRENA, “Renewable Power Generation Costs in 2018,” 9, 45.

      Currie & Brown, “The Costs and Benefits of Tighter Standards for New Buildings,” 27–28.

    • In a system with lots of renewable generation with zero fuel cost, the current market mechanisms for establishing price will cease to function.

      Decarbonising the power sector will likely require improvements to existing market mechanisms regardless of the extent to which the rest of the economy is electrified. A European electrification strategy would provide an opportunity to tackle the necessary market changes in a structured and efficient manner.

      Many renewable generation technologies require no fuel. As such, the nature of their costs is very different from conventional power plants. Wind parks, for example, have comparatively large upfront costs, but then produce electricity almost for free. Traditional market mechanisms are not designed with this cost structure in mind and this may create problems as the sector decarbonises. For example, the power market price reflects the costs of generating electricity, not the cost of building power plants in the first place. In a system with lots of low-cost generation, power prices are likely to be very low a lot of the time. These low prices may not, in themselves, be sufficient to encourage investments in generation capacity. Other mechanisms already exist in many countries to support investment and their importance is likely to grow as the sector decarbonises further. However, these changes and the associated challenges are the result of decarbonising generation and not the wider electrification of the economy. Indeed, the European Commission’s own analysis of scenarios to reduce emissions between 80-100% by 2050 shows that, regardless of the strategy chosen, the share of generation met by wind, solar and nuclear generation, all marked by high upfront costs and low generation costs, rises to between 77-87% of all generation by 2050. As such, market mechanisms will need to evolve regardless of the extent of electrification. A European electrification strategy would, however, provide a useful opportunity for Europe to meet these challenges in a more coordinated and efficient manner.

      Reference:

      European Commission, “IN-DEPTH ANALYSIS IN SUPPORT OF THE COMMISSION COMMUNICATION COM(2018) 773: A Clean Planet for All A European Long-Term Strategic Vision for a Prosperous, Modern, Competitive and Climate Neutral Economy,” fig. 23

    • Existing markets for flexible demand and generation won’t be able to provide the necessary flexibility.

      The market, supported by technological innovation, is already evolving to help unlock additional flexibility and, with so many alternative sources available, it seems likely that solutions will be found.

      As the power system decarbonises and new areas of the economy are electrified, it will be increasingly valuable to efficiently match both the provision and use of power. Doing so will involve harnessing both new and existing sources of flexibility in the energy system, for example by changing the time when electric vehicles are charged to reflect the availability of cheap power.

      New markets, products and actors are already popping up to help add flexibility to the system and make sure it is used efficiently. New marketplaces are being created, for example NorFlex in Norway and the Cornwall Local Energy Market in the United Kingdom, to bring buyers and sellers together. New products, like fast-acting battery reserves and demand turn-down services, are being created by power networks to help them make use of flexibility; and new actors, like Next Kraftwerke in Germany, are identifying new sources of flexibility and finding ways to monetise them.

      Similarly, the fact that more flexibility will be needed in future is not inherently a problem, given the wide variety of sources that can provide it. Indeed, the process of electrification will bring both new sources of demand and new potential sources of flexibility. The electrification of transport, for example, implies that large numbers of batteries, in the electric vehicles themselves, will at any time be connected and distributed throughout the power system. This represents a significant net source of potential flexibility and helps to demonstrate electrification’s potential to contribute to smarter and cheaper customer participation in the provision of flexibility.

      Overall, therefore, the market is already evolving to meet the system’s future requirements for flexibility and electrification itself may help to bring new sources of flexibility to the energy system.