Europe’s total demand for energy is likely to stay unchanged or decrease slightly over the next 35 years, according to a new report by Nordic energy services company Fortum.
However, the share of residential electricity consumption will grow because of an increased use of electricity for heating and cooling with energy-efficient heat pumps, alongside a rise in the number of electric appliances in households.
This is one trend for Europe’s power market predicted by the report Fortum Energy Review.
The study also predicts that the European Union’s 2020 targets are likely to be met but at a high cost. While current European wholesale prices are too low to attract new investments in generation without subsidies, the review says European end-user prices have increased due to higher taxes, levies and networks costs.
Addressing renewable energy, Fortum says technologies are becoming commercially viable and a transition towards a renewables-based energy system is possible with less subsidies if supported by a carbon price and market.
Cost-effective climate policy
Fortum has also used its paper to lobby for the EU 2030 energy and climate policy to be based on a leading emission reduction target with an enforced Emissions Trading System, said Tapio Kuula, president and CEO of Fortum.
Mr Kuula commented: “As European competitiveness is a key concern, a cost-efficient climate policy to minimise the price tag of decarbonisation for society is of utmost importance.
“Decisions on the 2030 climate targets and a structural reform of the ETS are urgently needed to boost the decarbonisation of society. In parallel, global efforts for pricing of carbon should be accelerated.
He added: “The growing global concern over climate change must translate to action as climate change will not wait for better economic times.”