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30 October 2020

To decentralize energy systems we need customer empowerment

In his interview with IMET, Kristian Ruby, Secretary General of Eurelectric, describes energy systems as development drivers towards more electrification and consumer involvement, and explains why hydrogen will not play a major role for most vehicles close to people and citizens.

How do you envision the future of urban energy systems?

Towards 2030, electricity will radically shift to carbon-neutral sources: 60% RES, 21% nuclear. Today, electricity is way ahead of the curve, making it a viable option to decarbonise other sectors. We envisage a future much more electric than it is today; with electricity covering more than 50% of the energy demand. We will be living in a thrilling and dynamic society, a carbon neutral economy with more involvement of the people in the energy network. We think that even if this future requires quite a few investments it is one that brings a lot of opportunities for people, and it is one that is going to empower people.

How does Eurelectriccontribute to this vision?

We conduct research and provide political advice on all major issues affecting the electricity sector, from markets to energy policy, environment & sustainable development, retail customers, networks and many other energy related topics.

Furthermore, we represent the common interests of the electricity industry at pan-European level. Together we define our vision of the future and, through thorough and specialised research studies, we understand how it can be achieved. On this basis, we promote the views of our industry at European level and engage in policy debates with policy makers and other relevant stakeholders to drive the required developments.

We take the crucial role in this transition – supporting energy systems as development drivers towards more electrification and more consumer involvement.

Why did you join the IMET initiative?

We see a big need for collaboration among a multitude of stakeholders. Even if utilities are very committed to the clean energy transition, they are not going to do it on their own. The transition towards a more sustainable future will require cooperation. Energy providers, building owners, public authorities, technology providers, will need to collaborate in order to make this happen. We think that essentially engaging in platforms, which gather actors that are driving the transition together, is important to voice our views on what needs to happen and to co-create solutions.

"The transition towards a more sustainable future will require cooperation. Energy providers, building owners, public authorities, technology providers, will need to collaborate in order to make this happen."

This is why we actively cooperate with a whole range of initiatives that follow the same goals, such as IMET. In terms of similar collaborations in the sustainable mobility field, we are part of the Platform for Electromobility. As for the smart cities field, we also cooperate with the Covenant of Mayors, the world's largest movement for local climate and energy actions.

Could you mention some concrete examples of actions you have taken?

We convene experts from the industry to explore different themes. We have currently 30 groups working on different aspects of the energy transition: market arrangements, energy efficiency, socially fair transition and so on. This is part of our effort to convene the industry around a joint vision and put meat on the bone when it comes to accelerating the transition.

I will give you a couple of examples of the most recent actions undertaken in the field of energy transition:

First one, we got our members to commit to 15 pledges to customers. As a result of a one year process, we set out to understand how to support customer empowerment in the energy transition, and delivered this list of pledges. The pledges are supported by the electricity industry across Europe with the aim to deliver a sustainable, inclusive and smart energy future to our customers.

Energy suppliers are therefore developing a range of solutions to make sure that everyone can benefit from carbon neutral electric solutions. Some examples of innovative services from European companies are Iberdrola’s Smart Mobility Plan which includes the installation of fast charging stations on the main roads for every 100 km, or the EDP EV.X app, an app designed to help the drivers understand what their daily life would be like with an EV.

Second action I’d like to mention is the joint statement we have issued with ACEA (the EU Automobile Manufacturers Association) to electrify mobility. We called on the European Commission to accelerate its plans for the Alternative Fuel Infrastructure Directive review as part of the recovery plan for Europe. This revised directive should introduce a much more ambitious approach for rolling out charging points across the entire European Union. This is very much needed for citizens to support the electrification of transport.

Does Eurelectric sponsor and/or endorse innovation projects with potential to scale-up?

Our main task in relation to innovation is to maximise the European Commission envelope for climate-friendly energy innovation. Occasionally, we also endorse specific projects on a request basis. So if we have a consortium approaching us with an idea to develop a project on V2G and other areas and if we think it’s solid and has potential, we endorse it. Also, the larger companies in our network have big accelerator and start-up programmes, and a lot of the start-ups in the energy sector are typically part of these programmes. We are actually trying to give some visibility to start-ups by putting the spotlight on some of the new innovative ideas that are entering the market and by trying to challenge conventional thinking. Furthermore, we also have e-mobility companies, such as charge point operators, who assist us in defining our positions.

"We are trying to give some visibility to start-ups by putting the spotlight on some of the new innovative ideas that are entering the market and by trying to challenge conventional thinking"

According to you, what are the most efficient policies on decentralisation of energy systems adopted at European level?

The EC target of decarbonising by 2050 is very ambitious, and its magnitude will inevitably spur huge changes in the energy system.

Is decentralisation of energy systems a goal in itself or is decarbonisation and customer empowerment the real goal? We believe in the latter and that the energy system will be decentralised in parallel. Solutions are becoming cheap and people like to generate their own energy. We spent (and are still allocating efforts to it) several years trying to develop new market rules that allow for more involvement  of customers, easier access and less barriers to generate energy as well as an easier choice to shift to an energy provider. I think that what is really important now is that we implement those new market rules very seriously. Still, there is a huge challenge ahead of us: the energy transition is the most important societal transformation of the 21st century and the next mission-critical stage of that endeavour is to make e-mobility a success. So make it easier and cheaper for “normal” people to be able to purchase a fully electric car, taking advantage of the fact that electricity is very advanced in its decarbonisation process.

"Is decentralisation of energy systems a goal in itself or is decarbonisation and customer empowerment the real goal? We believe in the latter and that the energy system will be decentralised in parallel."

And what would that take? Consolidated effort from many parties to roll out charging infrastructure that allows for millions and millions of people across European cities and suburbs to be able to charge conveniently (any time you need it and want it). Build that system now, invest in the current infrastructure (such as the power grid) to make it work for the energy providers, for the companies that have the charging infrastructure so that they can profit from it and make it easy for the customers by removing all the barriers.

When you speak about concerted effort, it seems easy, but it is incredibly complex: non-aligned interests, find compromises between different stakeholers, etc. Is that also the case among your different members?

Yes, definitely. And this is logical, there are different realities in the EU today, which lead to different views. Some are moving in the right direction, others aren’t. Some realities can be really complex. There’s no chance in this world that one actor can do it alone. As an example, take a rented building. If you want to set up a charging point, this alone requires a whole range of interactions with different actors – an e-moblity service provider, the electricity company, the landlord; this takes us to the next challenge: what about the parking lot in front of the house which is publicly owned? Who makes the investment, who owns it, who operates it, and so forth? We should not underestimate nor assume that it will happen because it is technically feasible. It requires time and a huge effort from a lot of sides and it is not going to happen overnight.

"When we are talking about energy transition for passenger cars, we want to electrify hundreds of millions of passenger cars and provide infrastructure for them in the next 10-20 years. If we don’t make it a success and people perceive this as a frenzy from Brussels, then the market won’t follow and people might get disappointed. That is why our approach is more bottom-up."

Sometimes, in Brussels there is this idea that if we push some directives and they are approved, then it’s done. However, when we are talking about energy transition for passenger cars: we want to electrify hundreds of millions of passenger cars and provide infrastructure for them in the next 10-20 years. If we don’t make it a success and people perceive this as a frenzy from Brussels, then the market won’t follow and people might get disappointed. That is why our approach is more bottom-up: decarbonisation needs to happen from the view of consumer engagement and empowerment exercise, where people feel that their lives can and will be improved, that they get more value for their investments by getting cheaper and more efficient mobility.

Do you think there are currently enough communication campaigns to “educate” consumers?

The mobilisation of young people by the Fridays for Future movement is in my view the most impressive and impactful communication campaign you can imagine. I think this movement will trigger genuine change both politically and in terms of habits. This can be strengthened with additional communication efforts. One big game changer here will be when the marketing budgets of car companies will be fully directed to e-mobility. This is starting to happen already and combined with the new regulations, it has triggered an increase in the sales of fully-electric. But in my view, the trick is to guarantee that this communication is accompanied with accessible and convenient solutions so that we see lasting changes.

What about alternative clean energy sources, such as hydrogen? Where does EURELECTRIC stand? Do you believe they can “co-exist” or is electrification the only way forward?

Eurelectric's vision is a dynamic society powered by carbon-neutral energy and we believe that electrification will play a major role. Nevertheless, there are currently also places where a fully electric solution is quite a way off. We made some very detailed studies where we see that hydrogen plays a role, but significantly lower than electricity. And that’s basically down to pure physics. If you want to produce carbon-neutral hydrogen (which is hard), you need to start with electricity (or with putting carbon in the ground which is messy and difficult). This means you will only use hydrogen where there is no other alternative and/or where the cost doesn’t matter that much. There might be some hydrogen buses here and there, but from what we just discussed (transformation of cities, stable urban infrastructure), the role of hydrogen will be limited if you look at the transportation needs of people. Due to the costs and ease of use, hydrogen will not play a significant role. Most passenger cars will be electric, as hydrogen-powered cars are too expensive and very few are being manufactured, and moreover, let’s not forget about the logistics that are needed to transport hydrogen. As a conclusion, hydrogen will not play a major role for most vehicles close to people and citizens. It will probably be used by industry and heavy transports.