Today the European Commission published the long-awaited Report on the Future of EU Competitiveness, authored by Mario Draghi, the former President of the European Central Bank. The publication is set to play a significant role in the shaping of the new European Commission's strategic direction. SolarPower Europe has issued the following statement as an initial reaction to the paper's recommendations:
Walburga Hemetsberger, CEO of SolarPower Europe (she/her):
"It’s good news for solar and renewables that today’s report recognises the importance of decarbonisation and competitiveness, and underlines how mutually reinforcing they are. The best option for EU competitiveness remains flexible, renewable-based electrification. As we’ve modelled, flexible electrification, based on renewables, can decrease day-ahead electricity prices by 25% by 2030 and 33% by 2040 – that’s a no-regret pathway for Europe.”
On market design, grids, flexibility, and electrification
“The solar sector is relieved to read the acknowledgment of the critical role of long-term contracts, like PPAs and CfDs, as well as marginal pricing, in making the electricity system work and delivering lower energy prices for industry. But President von der Leyen, as she shapes her new College of Commissioners, should be clear: to structurally lower costs, the way forward is based on clean flexibility and smart electrification.
Building on this sentiment, we recommend that Europe adopts an Electrification Action Plan, which goes beyond the good work on electrifying transport, and creates a real pathway for electrification in industry and buildings.
As the report highlights, some of Europe’s energy-intensive industries will need support during this transition period. Any support should ultimately be conditional on electrification and the progress of clean flexibility.”
On reshoring solar manufacturing
“Spending on resilience is not a cost, but an investment. It is important not to give up on strengthening the EU solar supply chain – it is the continent’s primary decarbonisation technology.
We are convinced that the EU Net-Zero Industry Act will make a difference. The NZIA will create a new ‘market pull’ for EU solar products. A visible pipeline of demand de-risks investments in new factories. Still, we believe that more support is needed for the initial scale-up for factories. There, we are lacking an EU financial instrument dedicated to EU solar manufacturing – comparable to the support received by other sectors, like wind, batteries, and hydrogen."
Notes
- New modelling shows that more renewables, electrification and flexibility can boost European competitiveness, slashing average day-ahead energy prices by 25% by 2030, and by 33% by 2040. Discover Mission Solar 2040.
- The EU Joint Research Centre warns that Europe needs to double its energy system flexibility by 2030 and increase by sevenfold by 2050.
What is Flexibility?
Flexibility is the ability of a consumer, electricity generator, or any other technology (like storage) to adjust how they feed in electricity to the grid, or consume electricity from the grid in response to grid needs or solar availability. Flexibility means less investment is needed for slow-to-build grid infrastructure. We also need to focus on the efficient and smart operation of grids with smart electrified resources. In real life that looks like a solar power plant coupled with battery storage, or a smart charging station that charges a car when rooftop solar PV is producing abundantly.
While we need to ramp up battery and heat storage, we should ensure flexibility from the demand side too. We can follow the example of nuclear countries who employ flexibility from the demand side to manage inherently inflexible nuclear production. Since it’s hard to switch nuclear on and off, consumers are encouraged to spread out their demand for electricity. ‘Time-of-Use’ tariffs make it cheaper to use nuclear electricity at night, incentivising electricity consumption at night, when demand is typically lower.
Discover the #LetsFlex campaign
What is Electrification?
Electrification means building an energy system on the principal of electricity – rather than combustion. So induction cookers rather than gas hobs, and vehicles that run on electricity, rather than diesel and other fossil fuels. Today, 24% of Europe’s energy system is electrified. We should reach at least 60% electrification in the EU by 2050 to achieve climate neutrality.
Discover the Electrification Alliance
Questions? Get in touch.
Bethany Meban
Head of Press and Policy Communications
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