The European Union does not let the crisis go to waste


I I’m CEO and co-founder of a green fintech based in London. We conduct extensive research on solutions to climate change and companies leading the transition to a low carbon economy. In this new weekly column, we aim to share some of our insights. We believe the convergence of key technologies will profoundly reshape the way we live our lives, driving a seismic shift to our biggest industries like transportation and energy. It is becoming increasingly clear that the deflationary power of technologies such as solar panels and battery storage are driving new forms of life that are more sustainable, more efficient and more democratic.

A perfect example of this trend is cars; parked and unused for most of their useful life as we know them now, they will soon become computerized power stations on wheels, capable of delivering electricity to and from our homes and our grid. Our homes, too, will essentially turn into small power plants, as the grid moves from a dated, centralized, fossil fuel-based structure to a decentralized, digital one, based primarily on renewable energy assets. I will share evidence of this massive shift to a low carbon future every week.

The pace of this energy transformation is already accelerating. When the Biden administration joined the Paris Agreement, more than 90% of global GDP pledged to mitigate climate change and reach Net Zero. Last February was a sad month, but one that also saw a marked acceleration in the transition to a low-carbon economy. Europe was already in an energy crisis before Russian troops invaded Ukraine. This energy crisis is fundamentally about natural gas, with liquefied natural gas (LNG) being shipped internationally to the highest bidder at historically high prices, contributing to persistent global inflation.

The combination of the energy crisis and the militancy of a major global oil state has led to a significant moment of acceleration of the low carbon transition. Germany is the world’s fourth largest economy, has the largest GDP in Europe and depends on Russia for more than half of its natural gas imports. Germany was supposed to dismantle its last three nuclear plants this year and has a plan to dismantle all coal-fired plants. In the face of our twin crises, Germany decided last week to further accelerate the energy transition, with new economy minister Robert Habeck announcing a plan to advance the goal of achieving a 100% renewable electricity grid of 15 years here. To have Germany’s grid primarily based on renewables by 2035, well ahead of its previous 2050 target, new legislation is being put in place to support 10 GW of new offshore wind and 20 GW of new solar power plants per year. year. This week, all eyes will be on Ursula von der Leyen, the President of the European Commission, who is expected to unveil a new energy strategy for the continent, which should also represent a material acceleration of the energy transition.

The solutions to the energy crisis are local… Very local.

As the EU works on a plan for a predominantly fossil fuel-free electricity system by 2035, it is worth thinking about what this grid of the future might look like, something to which we at iClima have devoted a great deal of time. Our global energy industry has been built around large centralized power plants, primarily fueled by coal and natural gas. Here, electricity is delivered to users via long high voltage transmission lines which are connected to substations which step down the voltage and connect to a distribution network.

The reality of this system is that much of the energy content of fuel sources such as coal, diesel or natural gas is wasted through inefficiencies in energy conversion and later through losses in transmission and distribution process. According to Electropaedia, if we take the example of domestic electric lighting, “about 2% of the energy consumed to supply the electricity is ultimately converted into light energy”. This centralized system also places consumers at the mercy of world events.

The only two short-term solutions in the hands of consumers are to embrace energy efficiency and, where possible, to generate electricity at the point of consumption. Power generation “behind the meter” has been difficult for technical and economic reasons until recently, when substantial declines in the cost of solar panels and batteries made these solutions competitive. This means that users adopting behind-the-meter products can reduce the kWh acquired from the grid. Deployed efficiently and at scale, the potential savings from these Distributed Energy Resources (DERs) can be substantial. Vibrant Clean Energy estimates that with potential users investing in what energy expert and author Bill Nussey beautifully calls “homegrown solar power,” the U.S. economy alone could save $473 billion in utility bills. electricity until 2050.

That said, we are at the bottom of the so-called “S” adoption curve for these technologies. According to SunRun, only 3.5% of US homes have residential solar installations on their rooftops, which means more than 75 million homes could benefit from the savings from installing a rooftop solar system. This is a huge opportunity for companies catering to the needs of this growing market. On the other side of the planet, Australia is ahead of adoption, reaching 25 GW of solar capacity by the end of 2021. At this level, rooftop solar accounted for almost 8% last year of all the electricity consumed in their national electricity market, their largest network which covers five regions.

We believe we are seeing the beginning of the end for fossil fuels, and the end of the beginning for decarbonization solutions. They are no longer concepts, they are evolving now. We foresee a rapid shift towards a sustainable, low-carbon, circular and inclusive economy and I look forward to sharing evidence of this reinvented world over the coming weeks.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


nasdaq

Not all news on the site expresses the point of view of the site, but we transmit this news automatically and translate it through programmatic technology on the site and not from a human editor.
Back to top button