Convergence has already changed the face of energy in Europe – and yet it could do so much more.
Convergence of companies, policy, financing and sectors should breed collaboration and that in turn could create the business models needed for a 21st century energy sector.
So is more convergence the way to fulfil the full potential of the energy transition? If so, how do we speed it up? Indeed, can we accelerate it with the speed that is needed for a just transition to hit decarbonisation targets and end energy poverty? Because one thing is certain – time is running out to address the climate crisis.
“Achieving climate neutrality by 2050 will require policymakers, industry, the energy and finance sectors to all jump into the same boat,” says Marco Pezzaglia, President of COGEN Europe, the European advocacy group based in Belgium that promotes cogeneration.
“All stakeholders will need to engage in profound discussions and align their strategies to implement the solutions needed to build a sustainable energy system. The cogeneration sector is committed to this stakeholder process. We believe we can only realise a sustainable and affordable energy transition if we combine the right technologies and solutions.”
Pezzaglia says the focus “should be on more renewables, efficiency and flexibility to foster resilience and cost-effectiveness”.
“By combining heat and power, we can maximise efficiency and flexibility for an increasingly integrated energy system on the pathway to carbon neutrality. The cogeneration sector promotes these benefits towards policy makers, industry and the financial sector.
“We are convinced that a mix of complementary local solutions will deliver a socially just and competitive energy transition. The only way forward is for industry, civil society and policymakers to work together on ambitious and community-led trajectories towards climate neutrality.”
James Watson, Secretary-General of European gas organisation Eurogas, agrees that convergence will accelerate the energy transition, “as we increasingly become aware of the interconnectedness of all things: Energy, transport, industry, heating, health and well-being are all inter-related and as we develop more ways of linking them, the speed of the energy transition will pick up”.
He says that in turn, “costs will drop, jobs will be created, sustainable wealth will be created and shared. Society will be more accepting, as convergence will mean less disruption and less costs, and more justice for those moving from one sector to another. Convergence will deliver the energy transition and a better future for us all… and the sooner, the better.”
And he is keen to stress that “recognising the benefits of all clean technologies will end the futile divisions and build a harmony that will make the energy transition irresistible”.
Torsten Knop, Head of European Regulation at Innogy, believes that the energy transition must be structured from the bottom-up and this “requires sectors such as electricity, gas and heating to converge with the objective of creating optimized energy systems of all sizes”.
An optimized system is also the vision of Paddy Young, director of Clarion Energy’s Enlit Europe: yet he defines ‘convergence’ as a “system of systems – or a whole system approach. The concept of one system demonstrates inclusivity.”
Stressing that “convergence is inevitable and essential”, he says that for Europe to hit its carbon-neutrality targets between now and 2050 “utilising and developing current assets in the most cost efficient way is essential”.
“Sector coupling and the whole power-to-X developments really point the way to a whole system approach. A digitized, increasingly green and renewable gas, electricity, heating and cooling system, linked with an overlaying data system, will accelerate the energy transition.”
He says that in the broadest sense, a “resilient system that maximises energy efficiency will help decarbonise commercial property, industry and the transportation sector”.
And he adds that this whole system approach “will need innovation in many ways: regulatory, technological, and in business and financial models, as well as through young talented people entering the sector”.
However, it is not convergence but another C-word that 2020 will be remembered for: coronavirus.
And Kevin O’Donovan, technology evangelist and influencer, says the COVID-19 pandemic could – and perhaps should – change the way we look at convergence.
“When we come out the other side of this crisis, we’re not going back to the ‘old normal’,” he says. “We’re going to a new normal and the new normal means new ways of doing things. We need to learn some lessons from this ‘black swan’, as painful as they may be.”
He wonders whether, “with all of the government stimulus coming at us from across the globe, maybe it’s time for someone to start picking winners and start driving convergence in the energy sector”.
“What happens if that stimulus money is tied to driving convergence? Then there’ll be strings attached. Some people will see that as strong leadership: others will see it as benign dictatorship.”
He concedes there will be winners and losers – and suggest perhaps an engineering evolution is what is needed: “Maybe we don’t have the time anymore to see who wins out in a fair market. It’s unprecedented times, so – what if….”
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This is the first in a series of What If… articles. Up next: What If Consumers Drove the Energy Transition?