On June 3rd and 4th, representatives of the European electricity industry met in the Slovenian capital for Eurelectric’s Annual Convention. The debates focused on the sector’s prospective challenges, the so-called "4Ds": decarbonization, decentralization, digitalization and democratization. This Convention was the opportunity for Eurelectric to unveil the results of its study on pathways to decarbonise the whole European economy by 2050.
The message of the power sector’s annual Convention is clear: the electricity sector ecosystem is undergoing profound transformations, marked by a digital revolution and the emergence of new players and new services. In this context, the electricity sector must undergo a profound mutation and resolutely be forward-looking.
Adapting and innovating to meet tomorrow’s challenges
Several "major trends" were highlighted in the discussions:
To integrate renewable energies, it is essential to increase the flexibility of tomorrow’s electricity system, which requires rethinking the regulatory framework and the way flexibility is valued in the market. The development of storage, the active participation of demand, the use of hydroelectricity and electromobility - as key vector of the decarbonisation of the transport sector - will be essential.
The digital revolution offers tremendous opportunities to unleash the potential of energy transformation. The development of smart grids, the automation of processes and the optimal use of data will enable electricity players to innovate in a world where energy management is more decentralised.
Finally, the increasing participation of consumers will be an essential component of tomorrow’s electricity system, especially downstream. Anticipating, identifying and responding to their needs, in particular by offering attractive services, is more than ever a priority for the sector’s players.
Meeting the ambitions of the Paris Agreement
During its convention in Ljubljana, Eurelectric also revealed the main findings of its annual study conducted by the consultancy Mc Kinsey. The study follows the European utilities’ commitment to achieve carbon neutrality well before 2050 and work towards an accelerated energy transition. This report, which builds upon a large consultation process with representatives of the industry and electricity companies from the 28 EU Member States, models various possible options to meet the ambitions of the Paris Agreement. It shows that, to enable Europe to reduce its carbon emissions by 95% by 2050, electrification will have to be pushed in all sectors of the EU economy, to cover at least 60% of final energy consumption. This figure is based on the assumption of an annual growth rate of 1.5% and a decrease in energy consumption in the EU of 1.3% per year. In addition, Full EU decarbonisation by 2050 would require an electrification share of 63% in transport and buildings respectively and 50% in industrial processes. Unprecedented efforts will be necessary to achieve such substantial decarbonisation of the European economy. "The political emphasis on developing a just transition and adapting to different country situations will be one of the keys to success," said Eurelectric, which hopes that his study will contribute to the debate on the long-term climate strategy for the European Union.
New challenges mean new paradigms
Such a transformation thus implies rethinking the way the sector’s players operate and developing a new vision that goes beyond sectoral barriers and puts innovation at the heart of the energy transition. Francesco Starace, CEO of Enel and President of Eurelectric, emphasised that "companies will have to show a willingness and flexibility to adopt new business models, as well as an openness to embrace new partnerships".
The panelists reiterated the importance of defending a sustainable transition: the electricity sector must strive for an inclusive and responsible leadership model if we want to create a clean, intelligent and connected future.