The increase in clean electricity consumption confirms that the market balance will be maintained

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AleaSoft, November 12, 2019. Last week, a group of industrial and civil society organizations signed a statement urging the European political representatives to promote the use of electricity produced from renewable sources to achieve the goal of zero emissions in 2050. For AleaSoft, this statement confirms that the market balance will be maintained in the future and that photovoltaic auctions are not essential. What is necessary is to promote the consumption of clean and renewable electricity.

On November 6, a group formed by one hundred organizations from the main industrial and civil society sectors signed a statement whose objective is to call the political leaders of the European Union on the importance of the electricity produced from renewable sources to achieve the goal of zero emissions in 2050.

In the statement, the signers list the benefits that the smart electrification from clean energy sources will bring. First, it will allow reducing the import of fossil fuels, whose current cost to the European citizens is more than 5 thousand million Euros every week.

The electrification will also lead to significant energy savings, since heat pumps and electric vehicles, for example, are more efficient than their fossil fuel combustion counterparts. In addition, the intelligent management of the air conditioning electricity systems and the recharging of electric vehicles will allow managing intelligently the large amount of energy generated from renewable sources, improving the flexibility of the demand and strengthening the response capacity and robustness of the electricity system. Also on the demand side, the digitalisation and the storage systems will allow users to have an active role in managing their energy consumption, becoming prosumers and reducing costs.

The intention of the statement is that electrification drives the technological development that will allow Europe to maintain its industrial leadership, thanks to the digitalisation, the promotion of the electromobility, the investments in solutions related to renewable energies, intelligent and clean electricity and the use of the green hydrogen. The hydrogen generation, thanks to affordable electricity from renewable sources, will be a very important element in the decarbonisation of both transport and industry and will also provide medium and long‑term energy storage.

And last but not least, the electrification will also improve air quality, something of vital importance to health and the environment.

Taking into account all the above advantages, the statement calls on the European authorities to enhance the electrification so that the European Green Deal, proposed by the new President of the European Commission, Ursula von der Leyen, is significant. Specifically urged to:

  • Incorporate the electricity produced from renewable sources in sectors such as transport, heating and cooling.
  • Support a solid industrial strategy that guarantees the elimination of carbon emissions while enhancing the European industrial leadership in the sector.
  • Promote a greater digitalisation of the sector.
  • Ensure the investments in grid infrastructure, especially smart grids, which support the energy transition.
  • Support the increase of electric vehicles by accelerating the deployment of the charging infrastructure.
  • Implement strategies to increase the energy efficiency of buildings.
  • Ensure financing to support the regions that have a different starting point in the energy transition process.
  • Modernise the energy tax regime in order to accelerate the decarbonisation.
  • Allocate funds for research and innovation of solutions aimed at mitigating the effects of the climate change.

The statement was promoted by the Electrification Alliance, a group created in 2017, whose members are European Association for Electromobility (AVERE), European Association of Electrical Contractors (AIE), European Climate Foundation (ECF), European Copper Institute, Eurelectric, European Heat Pump Association (EHPA), Smart Energy Europe (smartEn), SolarPower Europe, of which UNEF and APPA are members, and WindEurope. Among the signatories are Acciona, AEE, Axpo, EDF, EDP, ENEL, to which Endesa, E.ON, Iberdrola, Luminus, Naturgy and Siemens Gamesa belong.

According to AleaSoft, the massive electrification of all sectors that promulgates the statement is necessary to complement the spectacular increase in the production of electricity with renewable sources that is expected. Although, for AleaSoft, it is necessary to promote the consumption of green energy, as the signers propose, the market itself will favour it by offering clean energy and at more attractive prices. The increase in the demand thanks to these prices will, at the same time, allow the prices of the electricity markets to remain in balance, avoiding the dreaded cannibalisation effect of photovoltaic energy.

This initiative only confirms that the market balance, between supply and demand, will continue with the increase in renewable electricity generation, as the Spanish consultant commented on previous occasions. In addition, for AleaSoft, this statement demonstrates that there is no need for photovoltaic auctions. Better allocate all these resources to stimulate the electrification and the decarbonisation of the consumption.

The AleaSoft forecasts models, which cover a horizon of up to 30 years, project this market balance between the demand and the supply of electricity into the future, taking into account both the increase in the production capacity of the renewable energies and the increase of the electricity consumption that will involve the electrification to which the statement refers.

 

Source: AleaSoft Energy Forecasting.

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