Nordic utilities Vattenfall, Fortum and Statkraft have highlighted what they see as three key elements necessary to meet the EU’s revised 2030 climate target of reducing emissions by at least 55%.
They called for strengthening cost efficiency and power markets through technology neutrality, enhancing electrification to accelerate the decarbonisation of the EU economy, and strengthening and enlarging the EU ETS as a key driver for decarbonisation.
The trio said the complementarity of technologies will play a key role in keeping transition costs down and making the energy transition affordable to customers.
They said that technology neutrality should be safeguarded in the Taxonomy Regulation by ensuring that the screening criteria are defined objectively and applied evenly in order to enable a full utilization of existing and new carbon-free power production assets to cost-efficiently deliver on the EU climate neutrality objective.
Well-functioning power markets should also be promoted and support should be allowed for less-mature technologies in a transitional phase.
It is also key to maintain the unbundling principle for ownership and operation of storage and supply of required flexibility, they said.
Demand for carbon free energy carriers should be stimulated in order to speed up investments in generation assets and infrastructure.
Work should also be done to strengthen grids and interconnectors across EU regions to enable the full potential of carbon free electricity and clean hydrogen.
They added that direct and indirect electrification is not only the most cost-efficient solution and main instrument for decarbonising other sectors, but also contributes to realising energy efficiency gains and sector integration.
Clean hydrogen should complement the use of carbon free electricity specifically in hard-to abate industrial and transport sectors, the trio said.
“Substituting fossil fuels with electricity will lead to significant increases in demand for electricity and clean gases,” they said.
Finally, carbon pricing should be applied as broadly as possible in the economy, possibly supported by other instruments particularly in the non-EU ETS sectors.
Pictured left to right are Fortum chief executive Markus Rauramo, Statkraft CEO Christian Rynning-Tonnesen and Vattenfall president and CEO Anna Borg.