Europe faces the gargantuan task of becoming carbon neutral by 2050. Beyond the many technical challenges for achieving this ambitious goal, there is also a social and economic dimension to it. Lights must not go out, energy poverty among citizens should not rise and European industry must remain competitive.
The decarbonisation of the economy will require significant efforts in all sectors - industry, residential, agriculture, transport, electricity, gas, heating to name a few. A wide range of solutions will be needed to ensure lowest cost and security of supply, but also accommodate for access to energy sources, climate zones, customer needs and local circumstances. This calls for an integrated systems approach at local level. Solutions like power-to-X, hydrogen, combined heat and power, demand response, heat pumps, all types of storage are already available to deliver this vision.
Local players will play a key role in delivering energy systems integration. Some already leverage the benefits of integration solutions. Stadtwerk Haßfurt, a local utility in Germany, produces its own hydrogen with an electrolyzer from electricity supplied by a local wind farm. The hydrogen is then stored and used in a cogeneration unit to close the circle and transform this green hydrogen into clean heat and electricity supplied to local customers. High efficiency cogeneration not only helps offset any energy losses incurred in producing hydrogen, but it will also help increase flexibility across all energy carriers – electricity, gas and heat. Such examples show the opportunities of integrating more renewables, reducing carbon emissions already today, and improving overall system efficiency at lower costs for consumers and businesses.
The EU and national regulatory frameworks now need to adapt to enable this new reality. A level playing field for all decarbonisation solutions across different energy carriers is needed, looking at power-to-X, demand response, energy efficiency solutions and all types of storage. Identifying and unlocking synergies will be key to bring flexibility between all existing and potential electricity, gas, heat infrastructure and meet customer needs while reducing pressures on the energy system. This will require increasing coordination and planning between market actors, consumers, local and national authorities.
Not taking an integrated approach to energy systems infrastructure and operation will result in a more expensive decarbonisation pathway, which disregards local customer needs and security of supply. On the contrary, making these changes will help foster new business models rewarding citizens, energy communities and businesses for investing in solutions that deliver local, secure and clean energy, make the energy system more flexible and renewable with their own local and clean energy. This will bring them new revenues and make them the active beneficiaries of the energy transition.