Energy utilities prepare to deliver new 2030 climate target

Picture showing a modern biomethane plant for generating electricity and heat from renewable raw materials. "We think green gases will be a relatively sizeable part of the fully decarbonised energy mix, something in the range of 25%" by 2050, said Camilla Palladino, executive vice president at Italian energy infrastructure company Snam. [Ralf Geithe / Shutterstock]

Now that the EU has raised its 2030 emissions reduction target from 40% to 55%, questions are being asked about how utility operators can make the changes necessary to transform the energy system.

After marathon eight-hour negotiations that went until the early hours of the morning, EU prime ministers and presidents agreed on 10 December to a European Commission proposal to raise the union’s 2030 target for reducing emissions to 55% below 1990 levels, up from a previous target of -40%.

The target will still need to be agreed early next year with the European Parliament, which wants to raise the target to -60%. But it is already clear that Europe’s energy system is going to have to transform faster than originally envisaged, to meet the 2050 target of completely decarbonising down to net zero.

This will require new energy technologies such as solar, wind, hydrogen, and perhaps others we don’t know about yet. All of those new energy sources will have to be integrated into the EU’s energy grid, and that task will fall to Europe’s energy utility operators.

Right now there are two main concerns: preparing the grid for intermittent renewable energy supply, and updating gas pipelines to be capable of transporting hydrogen as a baseline fuel.

“We think green gases will be a relatively sizeable part of the fully decarbonised energy mix, something in the range of 25%” by 2050, said Camilla Palladino, executive vice president at Italian energy infrastructure company Snam, at a EURACTIV virtual conference last week.

“The existing gas infrastructure is fundamental for this to happen,” she said, because it’s the most cost-effective.

“We are running a process to make our infrastructure hydrogen-ready which means everything we buy from now in terms of pipes is at a hydrogen-ready standard. We’re doing a hydrogen audit on everything we have underground, all of the pipes, to see what percent will already be ready to have hydrogen in them, and what changes will need to be made to the others.”

“It looks so far that 70% of the pipes underground are already hydrogen-ready in terms of material, which points to the fact that investments required would be small.”

Though the 2030 target has now been agreed in principle, the specifics of how to get there won’t come until the European Commission proposes its climate law, expected in June next year.

Augustijn van Haasteren, a senior expert in the Commission’s energy department, said at the event that while the specifics are yet to be worked out, what’s clear is that the law will mean a fundamental transformation of Europe’s energy system.

“Whereas in the past the work was very much guided toward the greening of electricity production, next year we’ll see a more serious attempt to decarbonise other energy carriers – I’m thinking in particular of gaseous fuels,” he said.

“It will set a framework in which the private sector and utilities will have to operate in the future. And already it’s quite clear that these changes will lead to significant changes to the environment that utilities have to operate in.”

He said an early indication of the way the Commission is thinking can be seen in the Energy System Integration Strategy published in July. “There’s a strong emphasis on the need to make the energy system more integrated and move away from the system where we have a one-way street from the energy producer to the energy consumer.”

“This movement will require lots of investments,” he added. “Even if public funds will be available in generous amounts, of course, the majority of investments will need to be privately financed.”

However Dries Acke, director of energy systems at the European Climate Foundation, disagreed with the idea that the EU’s priority should be shifting away from electrification and renewables and toward decarbonisation of older energy sources.

“Electrification is going to be the main driver of the energy system integration and also carbon abatement,” he said at the event. “Gett electrification right is really the thing that deserves most attention and headspace from our decision-makers.”

The focus on gas infrastructure is misguided, he said. “These are comparatively smaller niche solutions, it’s important to make that difference – clean electrification and renewables build-out are what policymakers should focus on first,” he said.

“55% in 2030 means a reduction of 30% of fossil gas use across the European economy, as well as minus 15% of fossil gas imports. It’s not a golden age for gas, it’s rather a declining age for gas in the short term and towards full phase-out by 2050.”

German Green MEP Jutta Paulus agreed but said that the key challenge will be integrating the various energy sources into one cohesive grid.

“I think we have been thinking in silos much too long, we need a proper sector integration to achieve these climate targets,” she said. “We should think from the target. We should think from where do we want to go, and then have a downward declination so to speak. What do we have to do today? What is the planning that has to be done as fast as possible?”

The question of who should be controlling these planning decisions for energy infrastructure has been a contentious one recently.

Climate campaigners have said that ENTSOG, an association of gas utilities, should no longer have a role in advising on where infrastructure investment should be made. Dries said that utilities are using the possibilities of future green hydrogen as an excuse to lock in gas infrastructure built now.

But Palladino said that while she agrees that electrification should still be a focus, the key to reaching the 2030 focus will be knocking down these silos and incorporating different technologies into the energy system. That will require the expertise and knowledge of Europe’s energy utilities to be taken into account.

“One of the key things to have an efficient infrastructure planning system is to have very solid scenarios,” she said. “We need to try to understand what is likely to happen.”

“What we’re talking about is an energy system that needs to transform to get to full decarbonisation,” she said. “There will be big growth in renewable production and big growth in electrification. You would want to solve all the challenges that come from that in the best way possible for the system.”

Coordinated planning will be important, she said, “rather than to go ahead as they have done in the past with an electricity view, a gas view, and you only solve for your part of the energy system.”

The European Parliament is expected to take up the 2030 issue in a vote in January, during which it may add new demands about how next year’s implementing legislation should be crafted. The question over if and how gas infrastructure should be incorporated into the planning will be the subject of contentious debate.

> Watch the full EURACTIV virtual event below:

[Edited by Zoran Radosavljevic and Frédéric Simon]

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