Energy transition has gained enormous attention amid a strong call for decarbonisation. Governments, companies and civil society organisations have expressed their commitment to support this journey to clean energy and reduce carbon footprint significantly.
This attention is coupled with a downpour of investments toward renewable energy, from governments and investors.
The DACH region, composed of Germany, Austria and Switzerland, is joining this global energy transition journey as it is accelerating the integration of renewable energy sources in its energy system. To shed more light on this topic, we invited our DACH partner Bettina Bachmann to answer a few questions.
Bettina is an experienced energy professional who has held a variety of business technical and leadership roles in a global energy company. In her last role as Vice President in Production and Technology, she was responsible for software development, strategic partnerships, global deployment and technical data management. Bettina holds a MSc in geophysics from the ETH Zuerich, Switzerland. Currently, she focuses on non-executive and advisory roles in international technology and energy companies.
Below are some insights shared by Bettina on the energy transition in the DACH region.
How would you describe the journey of the DACH region towards energy transition?
Countries in the DACH region have a clear vision and long standing commitment to a carbon neutral future, shared by citizens, businesses and the public sector. It can largely be attributed to the strong clamour from the people themselves to explore different energy sources other than nuclear and fossil fuels, triggered by a number of events, from oil price shocks to Fukushima. People decided then, that they wanted to explore other options, pushing their governments and creating a sense of urgency to rethink energy strategies for the future.
People are at the forefront of the region’s journey towards energy transition. It is certainly an agenda that no politician, no corporation can make without very strong consideration and involvement of the public, of society at large.
However, changing the whole energy system is a very complex endeavour. We cannot just look at sustainability in isolation – what we need is a secure, sustainable and affordable energy supply. That is often forgotten, when emotions run high during discussions of the climate crisis. Today’s energy system has evolved over the last 100 years. Changing it is a bit like rebuilding a plane in full flight --- it comes with many degrees of freedom, and very little tolerance for failure.
What are the challenges and opportunities for organisations working toward energy transition in the DACH region?
Having this strong commitment from the public, companies, public sector agencies and other institutions, you can see a lot of funding going into technology development and innovation around the renewable energy sector. As a result, many large corporations have a dedicated unit for this endeavour, and they also partner with academia and start-ups to have access to the best ideas and to develop innovations together.
In the EU, the framework of the Green Deal, offers a lot of opportunities. This is not just the promise to become the first climate -neutral continent by 2050, it includes the systemic modernisation of energy systems and the sustainable use of all our resources. At the heart of all this is tremendous support to science, technology and innovation, and companies which receive funding also get strong coaching, guidance and supervision. As a result, we see a lot of new ideas, new technologies coming up and start-ups proliferate in the last few years. In Switzerland, there is a similar funding pool for development of new technologies and innovations.
The challenge, on the other hand, is that these commitments and opportunities can lead to fragmentation. There are just so many different targets and there is lack of clarity. Are we going to focus on greenhouse emissions in total or only CO2? How do we bring these targets down to individual contributors i.e. transport, households, industry? Questions like that arise. There is also a demand for transparent reporting, which is often hampered by limited digitalisation of data and data exchange. Once data becomes freely available, then comes the need for the possibility to measure and have proper metrics.
The ability to do professional data monitoring, analysis and reporting requires a tech industry of its own: you need sensors, data collection and storage, data privacy frameworks, and a platform, shareable between all relevant stakeholders. However, we run a risk that the thousands of small and medium enterprises which develop and deploy new energy technologies in the DACH area become overwhelmed by too many regulations, targets, forms to fill in, and reports to write. Administrative and regulatory costs alone might eat up their profits.
What is the interlink between established energy providers and new technologies?
How these established energy providers --- countries with hydrocarbons, national and international integrated energy companies and large electricity providers --- are linked now, will undoubtedly change, especially since electrification is becoming the name of the game. With large grid companies growing and having to provide much more capacity than ever before, they will provide this capacity from a new energy mix.
So, there are two key points to raise. One, the net zero world will lead to a large increase in electrification of many activities, which means the size and capacity of the current grid needs upgrading. The second point is, that the new energy mix should contain as much renewable energy as possible, while still providing security of supply. This requires a stable grid that can handle the intermittency of renewables, like solar and wind and combine it with the stable supply of established resources.
Then, longer term, there is hydrogen – this will require a whole new set of technologies to accelerate and reach scale, but it can also leverage some of the existing infrastructure for distribution.
Overall, there is agreement that in addition to the political, economic and social aspects, the challenges of reliable distribution and reliable supply have to be addressed through innovation and development and deployment of new technologies.
What are the opportunities for traditional energies in this energy transition?
Even with all the commitments and initiatives that are in place to push renewable energy sources, we still foresee that about 50 percent of the energy mix will come from fossil fuels in 2050. We just cannot scale up much faster and we cannot distribute fast enough. Also, not all fossil fuels are equal. We should not forget that gas is a fairly clean fuel that can contribute significantly to CO2 emissions reduction. Short term, gas can accelerate the journey towards a low carbon future.
Assuming fossil fuels will still contribute to the energy mix in 2050, one huge opportunity for traditional energies is to look at their own operations. Oil and gas companies have all set targets for emissions and committed to ensure that the CO2 impact of their own operation is going to be zero.
These traditional energies, having worked in the complex energy system for decades, must also leverage their expertise in project management and strategic planning to support the transition to a sustainable energy system that is also secure and affordable.
What is the role of consumers in this energy transition?
Consumers are realising that their lifestyle has an impact on this planet. We see climate conscious consumer behaviors getting popular; people are buying locally resourced goods, preferring “green” brands and are going carbon neutral. Perhaps more efforts are needed on other dimensions of their lives where they can significantly reduce their carbon footprints: insulate their houses, use less heating/cooling, consider travel and personal mobility, etc.
There is also a need to be realistic and become more knowledgeable about the compromises and trade-offs in the current energy situation. Sustainable, secure and affordable energy sources are our aspiration, and we need the right mix rather than focussing on selected resources only, at least in the short to medium term.