News - May 31, 2024

"Clean and smart solutions are the cheapest route to decarbonisation while supporting the competitiveness of the European industry"

Written by Alessandro Gaillard 4 min read

The EU Manifesto Interviews

In March, the Solar Impulse Foundation published its E.U Manifesto : Modernise to Thrive. The Manifesto, counting with the contribution of more than 40 stakeholders, is grounded in the steadfast belief that an efficient and resolute implementation of the Green Deal can and will come with multiple collateral benefits. Four of these stakeholders are Coalition for Energy Savings; Solar Power Europe; the European Association for Storage of Energy and the Confederation of European Paper Industries. We sat down with them all, around a virtual table, the discuss the need to consider the energy systems as a whole, an interconnected network of consequences and potential benefits. 

Solar Impulse : What is, according to you, a truly integrated energy system?

Arianna Vitali, CEO of the Coalition for Energy Savings (CES) : A fully integrated energy system is one in which demand side considerations are factored in from the start, rather than being an afterthought. Reducing energy consumption works hand in hand with increasing renewable energy so to ensure emissions reductions are achieved with reduced environmental impacts and enhanced benefits for all.

Catarina Augusto, Senior Technical Advisor, SolarPower Europe (SPE) : A truly integrated energy system would support a high share of renewable sources with flexibility solutions like storage. It would send clear price signals and allow grid users to efficiently participate in local flexibility markets with their PV, batteries, heat pumps, and EVs. This EU-interoperable system would have clear rules for seamless device-grid communication, ensuring a balance between supply and demand.

Patrick Clerens from the European Association for Storage of Energy (EASE) : A truly integrated energy system is a smart, renewables-based system where different energy and economic sectors are integrated, thereby increasing the overall efficiency at energy system level while contributing positively to energy security. Clean and smart solutions, such as energy storage, are the cheapest route to decarbonisation while supporting the competitiveness of European industry, and the main facilitators of integration. This is only possible with the support of well-functioning energy markets that promote the development of cleantech solutions and fully reward their benefits to the system.

 Małgosia Rybak from Confederation of European Paper Industries (CEPI) : The pulp and paper sector is already acting as a hub for smart sector integration and provides an example of how a truly integrated energy system could work. Moving forward towards a climate-neutral society, our sector has much to offer, and to gain, from a more integrated energy system. Our production sites are optimally integrated into the energy system. The pulp and paper sector is one of the leading industrial sectors in the use of renewables in industrial heating with biomass, coming from side-streams of other activities, accounting for more than 60% of our primary energy. We are one of the largest industrial prosumers in Europe, with the potential to produce another 31 TWh of fossil-free electricity and heat on-site.

Most importantly, we provide solutions to defossilise other sectors, such as district heating or transport.

Can you give an example of negative impact due to a lack of system integration and coherence in policy-making?

CES : When key decisions regarding the energy system fail to consider demand side resources, such as energy savings and energy efficiency measures, there is a clear risk of oversizing the energy infrastructure, leading to stranded assets and making the energy transition more costly for citizens.

SPE : Inefficient grid capacity and flexibility have led to a backlog in grid connections for the solar sector, energy waste (curtailment) and negative pricing. Despite the comprehensive regulatory solutions provided in the 2019 Clean Energy package to address these issues the consistent enforcement of these measures across the European Union continues to be deficient, aggravating the challenges faced by the solar industry.

EASE: Just a couple of examples. First, the integration of the mobility and energy sector: Vehicle-to-Grid (V2G) has significant potential to provide flexibility for the grid. Nonetheless, the many existing barriers (e.g. lack of charging infrastructure allowing for it, energy tariffs and pricing structure) dramatically limit the business case. A second example: the integration of the Industry - electricity - heating/cooling sectors through thermal energy storage (TES). The potential is extremely high: decarbonising industrial heat and strengthening the grid at the same time. But TES' potential remains significantly untapped: it's rare that its benefits and services are remunerated and discussed in legislation.

CEPI : An example on the EU legislation negatively impacting our sector is the exclusion from the ETS of the production sites that have made significant investments in decarbonisation. The latest revision prevents almost fully decarbonised installations from receiving free allocation, which is meant to reward the top performers. This inconsistency undermines investments in industry decarbonisation, contrasting with the goal of increasing the share of renewables in Europe's energy mix.

Another example is advanced biofuels for heavy transport, which is one of the ‘unexpected’ areas where the pulp and paper sector is expanding and acting as a truly integrated actor of the circular economy. Regulation in this area has been changing constantly and is lacking the long-term view that an enabling policy framework should provide. Demand is there and Europe’s industry, leading in this sector, is ready to scale up. But the investment is not going ahead for reasons mainly having to do with the EU regulatory framework.  

What can and/or should be done to have a truly integrated energy system?

CES : Promoting an integrated planning approach, particularly at the local level, is the prerequisite to integrating our energy system. The application of the energy efficiency first principle should guide energy system integration by ensuring that demand side resources  are always assessed and properly valued in investment decisions.

SPE : The main priorities would be to improve grid preparedness and coordination, accelerate permitting and digitalisation processes, and finally, promote flexibility both from the demand and  supply side.

We can promote flexibility by mapping needs and developing price signal frameworks, facilitating the hybridisation of solar projects with necessary financial support, and finally, accelerating the rollout of smart buildings to ensure the energy system is flexibility-ready. Increasing standardisation of EU network codes and certification processes for connection and flexibility is also essential.

EASE : To achieve sector integration, there are economic, administrative, and regulatory barriers to overcome - to list them all would require an entire paper. But in a general sense, technology neutral policies that enable the deployment of energy storage solutions can support the development of sector integration. Besides, developing well-functioning energy markets and achieving non-discriminatory market incentives and regulatory frameworks across the EU (especially for flexibility) is paramount. Moreover, while respecting the “polluter pays” principle, so the one creating unbalance, harmonise the taxes and fees applied to all energy resources is key, ensuring equitable allocation of energy policy-related costs among all energy carriers/energy consumers. Of course, from an operational/physical perspective, developing appropriate coordination between the different energy carriers across all timeframes is needed – i.e. coordination of infrastructure planning, risk preparedness, system operation, and so on. And finally: it is paramount to increase knowledge and awareness in Europe's society, public sectors, and Industry.

CEPI: Considering the climate emergency, more attention should be brought to effective and affordable solutions. That is in fact what energy system integration is, a mean to the end of a deep decarbonisation of the European economy. The best way to reach this outcome is to consider synergies that exist between technologies and activities, through coordinated planning of what can be made available to end-users in the industry, as part of what we call industrial symbiosis, and in the building sector.

This is why what we would like to see is more support to the development and integration of local value chains and decentralised solutions contributing to create a truly integrated energy system, and to getting consumers on board with the energy transition and the circular bioeconomy. For example, integrated regional and national plans that include all energy networks (electricity, renewable and low-carbon gases, and heat) would ensure that investments are future-proof and help avoid costly new investments whenever infrastructure can be repurposed. At the same time, regulatory barriers for the development of local innovative initiatives should be eliminated.

There should also be an increased emphasis in policymaking on things such as demand side flexibility, Combined Heat and Power (CHP), as well as support for biogas production, and financing for electrification in industry and for synthetic fuels using CO2 captured from biomass. In the future, renewable and low-carbon gases (like biomethane and hydrogen) will remain essential energy sources, complementing the increasing use of all renewable energy sources.

Written by Alessandro Gaillard on May 31, 2024

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