According to Bloomberg New Energy Finance (BNEF), electrification of transport, building and industrial sectors in Europe could cut emissions by 6-% between 2020 and 2050.
Produced in partnership with Statkraft and Eaton, BNEF’s report set out a pathway of electrification, consisting of both direct and indirect changes. Direct changes would include rapidly increasing the number of electric vehicles (EVs) in as much of the transport sector as possible, along with spreading heating systems such as heat pumps in buildings and some parts of industry. Indirect changes, meanwhile, would see a switch from natural gas to green hydrogen to provide heat for buildings and as many industrial processes as possible.
The report outlined how, through that pathway, power would equate for up to 60% of the final energy demand of those sectors. It accounts for 10% now.
The pathway would call for the power system to be more flexible owed to the different consumption patterns of heating and transport though, it was noted, the sectors could create new sources of flexibility if altering their consumption patterns – provided the right policies and technologies are in place. By 2050, the power system could need 75% more generation capacity compared to what would be needed without additional electrification, with wind and solar making up the majority of that, the report estimated.
Head of Analysis for BNEF, Albert Cheung, said: “Policy makers will have to support the reinforcement and extension of the grid to handle higher power volumes and more renewables, and the deployment of batteries and other sources of flexibility to balance the system. It will be crucial that governments and regulators adopt an electricity market design that enables developers of wind and solar projects, and those planning battery storage plants or demand response services, to anticipate level of returns that justify their investment.”