During last month’s Hungarian Battery Day, we sat down with Cillian O’Donoghue, Policy Director at Eurelectric, the voice of the European electricity industry – representing more than 3,500 companies and bringing together 34 national associations across 32 countries.
As the consequences of Europe’s lack of raw materials crystallise amidst the ongoing energy crisis, we ask Mr O’Donoghue about the steps the EU can take to solve – or alleviate the impact of – this critical shortage.
We need a clear raw materials access strategy. This needs to be coupled with three clear action points: firstly, we need to try and produce as much as we can – that means some mines across Europe have to be opened.
“Secondly,” he adds, “we need to build greater public acceptance of mining in Europe, in particular in countries like Sweden and Portugal. Thirdly, we need to build long-term ties with global suppliers to avoid dependence on a single source.”
The proposed three-step access strategy highlights two interesting – yet potentially challenging – future developments. Whilst we are seeing support for domestic energy production in areas such as nuclear, mining generally presents a greater number of environmental considerations. Therefore, greater public acceptance of a long-term European mining strategy may be very difficult. Mr O’Donoghue points to Sweden and Portugal as two countries where communicating the benefits of mining may present the biggest opposition.
Discussing the energy crisis further, the Policy Director of Eurelectric shares his proposals on how governments ought to respond to the price hikes in the average day-ahead electricity prices seen in the last few months.
Most importantly, we need to ensure support for the most vulnerable in society – targeted support is key. On the structural level, we need measures to reform the gas market. In the medium term, we need to focus on delivering the RePowerEU initiative and implement the measures that come with it.
Speaking about the biggest challenges that Eurelectric’s members have highlighted throughout this period, Mr O’Donoghue highlights that “in the short term, energy prices are on everybody’s minds.”
“In the medium term,” he continues, “we need to invest heavily in the electricity grid, and secondly, establish a prudent investment environment, and ensure access to raw materials. In the long term: a clear commitment to the 2050 strategy and 2035 internal combustion engine phase out – without moving the goalposts any further.”
Thus, are there any opportunities on the horizon for the electricity industry in the current energy environment?
“Of course, with the current high prices, there is a strong demand for reduction,” MrO’Donoghue replies. “It creates a market incentive for new technologies that can reduce demand. In conjunction, we need effective communication strategies for our customers. Another key opportunity for us is the digitalisation of the grid – bringing medium- and long-term benefits.”
In terms of innovation, a call for large-scale projects under the EU’s Innovation Fund was recently announced – with innovative electrification in industry and hydrogen among the topic areas eligible for funding.
We also discuss the internal combustion engine phase-out and whether it is feasible to achieve this landmark objective before 2035.
“It certainly is feasible – a key step to take for this to happen is heavy investments in infrastructure, which will, among other things, enable consumers to see benefits of the transformation, for example – greater efficiency offered by EVs, which will accelerate the phase-out”, says Mr O’Donoghue.
Last – but certainly not least, Mr O’Donoghue shares his views on the hydrogen industry and its place in Europe’s future energy landscape: “most importantly, it is less efficient – but that debate has finished, we are going with electric.”
In terms of heavy-duty vehicles, there is more room for debate as there are clearly key points to consider. Nonetheless, I remain sceptical about hydrogen’s place in the future shape of the automotive industry.
A particularly interesting take, when considering the European Commission’s increasingly pro-hydrogen approach – as seen in the proposal for a European Hydrogen Bank, negotiations on hydrogen partnerships and funding for innovative hydrogen projects.