Electrification Could Save Europe’s Energy Grid — Here’s How

By Ben Ahrens Published on Dec. 09, 2022

Europe is facing an energy crisis. Gas prices are high, and the continent is struggling to meet its challenging climate goals. These issues are primarily because the region relies heavily on imported oil and gas. This reliance has made Europe vulnerable to price shocks, as seen in 2008 when the price of oil spiked. In addition, Europe's aging energy infrastructure needs modernization to resolve many of these ongoing issues.

Europe's climate goals and current carbon footprint

National Greenhouse Gas Emissions per Capita in the EU Impacting Europe's Energy Grid

By 2050, Europe aims to become the world's first climate-neutral continent. To pave the way to achieve this ambitious target in the fight against climate change, the European Commission created a dedicated action plan known as the European Green Deal. This is an ambitious new climate policy proposed by the European Union, or EU, that aims to make the EU carbon-neutral by 2050. The plan includes investment in:

  • Renewable energy
  • Transportation infrastructure
  • Energy efficiency
  • And measures to reduce emissions from agriculture and industry.

It also calls for a strong focus on climate justice, with efforts to take responsibility by helping those most vulnerable in society adapt – all while building clean energy solutions so they can access and transition to a low-carbon economy. The Green Deal has been met with some criticism, particularly over its cost and that it doesn’t go far enough. But if successful, it could be a significant step forward in the fight against climate change. Electrification can help alleviate some of these issues.

So what does it mean to electrify everything?

Electrification is implementing technologies that utilize electricity as their primary energy source, often replacing existing technologies that rely heavily on fossil fuels such as oil, coal, and natural gas. Depending on the resources used to generate the electricity, electrification can potentially reduce carbon dioxide emissions from the energy sector, which accounts for about 77% of all greenhouse gas emissions in the EU.

RELATED: Four Trends Transforming Energy

The EU Commission is looking to make electricity 75% of their continent's energy consumed by 2050. Giles Dickson, CEO of WindEurope, says that this goal made by the Commission is possible, although with some caveats. He mentioned the requirement of emphasis on "cross-border planning and planning processes at the EU level" and the necessity for countries to include all stakeholders in grid planning. He goes on to say that, "we need to have concrete plans for Europe's grids. Without extra investments, we simply won't be able to get the large amounts of green electricity produced by wind farms to where it is needed."

With 76% of Europe's power grid still relying on fossil fuels for electricity, it’s crucial that the continent reaches at least 60% electrification by 2050 if they hope to meet their climate targets.

"The investments will be used to develop renewable energy sources, upgrade power grids, refurbish buildings and support the switch to electricity for the mobility, real estate, and manufacturing industries."

— Alberto Gandolfi, Head of European Utilities Research

Electrification will help Europe reach its goal of reducing greenhouse emissions by 55% by the decade's end. The continent will need to enhance its power grid to achieve this target. Some startups are innovating in this area and are working on ways to make electrification more efficient and effective.

According to an interview with Goldman Sachs earlier this year, Alberto Gandolfi, Head of European Utilities Research, voiced the roadblocks he sees on their path to reaching their lofty climate goals:

"We estimate that the electrification push needed to meet the EU's goals will require Europe to free up €3.7tn of capital over the coming nine years. Over half of this could be privately funded [roughly €2.2tn], an amount we think will be invested mostly by clean energy companies, with the remainder split between energy efficiency spending and grants. The investments will be used to develop renewable energy sources, upgrade power grids, refurbish buildings and support the switch to electricity for the mobility, real estate, and manufacturing industries."

How electrification factors into Europe's natural gas dependency

There are many reasons why gas is so expensive in Europe. One of the main ones being that the continent relies heavily on imported gas. Russia supplies a large percentage of Europe's gas, and prices can be volatile. Moreover, much of Europe has a carbon tax, which adds to the cost of gas. Electrification can help reduce Europe's dependence on imported gas and the continent can then source its power from various domestic and renewable sources. This would also create jobs and stimulate economic growth.

Natural Gas Opposes Electrification

Europe has been making an effort to increase the amount of electricity it provides its citizens. This trend can be attributed, at least partly, due to electric cars and solar energy sources like wind that are helping reduce greenhouse gas emissions while improving air quality. As more people gain access to these benefits, they’ll enjoy clean power and less cost from their utilities.

Some European startups fueling this trend include SolarMente and Baupal. Systems thinking is the key to understanding how our homes work. The SolarMente platform helps consumers harness clean energy and cut down on expensive utility bills by seamlessly integrating solar panels with storage units in one smart package through their software, making it easier than ever before for homeowners all over Europe.

With a focus on sustainability, Baupal is an online building application service that aims to make architecture more accessible. They also concentrate on energy consulting and help individuals secure funding for home improvements through their attention towards environmental factors like climate change or air quality concerns — all to make our built environment healthier.

NEXT: How Technology is Shaping the Real Estate Industry

Electrification is not without its challenges. The upfront costs are high, and there is resistance from the gas industry. However, it’s practically necessary that electrification be utilized to address Europe's energy crisis and meet its climate goals. There’s a strong argument that remaining static isn’t an option.