Delivering on Europe’s energy transition to net zero - honestly, we’ve got some unfinished business

This article summarizes findings from the European Energy Transition Readiness Index produced jointly by Roland Berger and Siemens Energy. 

Key Findings

• The Energy Transition Readiness Index (ETRI) is an in-depth study that evaluates progress towards the full transformation of the energy system and boils this down to a single “readiness” figure. 
• Europe’s ETRI score is 33%. It differs from region to region. But all these figures have one thing in common: they are much lower than they should be. 

To tackle the energy transition, our report identifies five key fields of action: 

1. Expand renewables
2. Improve energy efficiency
3. Strengthen the electrical grid
4. Exploit existing infrastructure
5. Manage the supply chain.

What is the ETRI?

The Energy Transition Readiness Index (ETRI) bridges the gap from perception to reality – and reveals the action needed to reach net zero. The report collates data from over 2,000 energy industry experts globally. Participants were asked to give their expert opinion on the progress made on key energy priorities. The result, a European energy readiness score of 33%, shows we’ve got so much more still to do. 

Our European ETRI analysis provides key insights into a dynamic and changing regional energy market, with policy and funding top of most people’s list of priorities. One large barrier often reported was inconsistent policy support for renewable energy solutions. Europe came second to North America in its energy readiness score. So, what lessons can be learned? 

Climate change, but also the significant industrial developments in other regions of the world, requires decisive actions if Europe wants to keep up. The US is demonstrating, with its Inflation Reduction Act, a very pragmatic approach. Simple and speedy. Seven months after the IRA was unveiled, the European Commission presented the Net Zero Industry Act and several other measures. They are intended to make Europe faster, more competitive, and thus fit for the future again. Such regulatory frameworks are important – we now need to act fast and enforce them. 

Plan of Action

Honestly, we’ve got some unfinished business when it comes to delivering on energy transition in Europe and getting to net zero. Our report highlights that we need to place greater emphasis on joint implementation to ensure progress in the following five areas: expanding renewables, improving energy efficiency, strengthening the electrical grid, exploiting existing infrastructure, and managing the supply chain. 

During the past 12 months there has been a strong focus on energy security and what is clearer than ever is that we need a mix of energy solutions. This is especially vital if we’re to solve the energy trilemma – the need to find the right balance between affordability, reliability, and sustainability. Last year was also marked by shocking climate change records. UN Secretary-General Antonio Guterres, following the publication of the IPCC’s world climate report, reminded global leaders again of the dire consequences if we don’t act. 

We can’t do this alone. Together with Bill Gates and Breakthrough Energy, the Energy Resilience Leadership Group has been established with two clear commitments: to harness start-up innovation in the next 12-24 months and to make Europe less dependent on gas.

It is not enough to wait until COP28 in December, we must make decisive progress now. To do so, the expansion of power grids must receive the same attention as the expansion of renewable energies. For example, for Italy to benefit from renewable energy in the future, the islands of Sardinia, Sicily, and the Italian mainland must be able to flexibly exchange electricity. We’re working with Italian transmission system operator Terna on the ‘Tyrrhenian Link’ to make this a reality. The 970 km long power link will ensure that the regions involved can derive the best possible economic benefits from this and help Italy achieve a more sustainable and secure power supply.

If Europe is to reach climate neutrality by 2050, it’s time to get real and act now. Our ETRI report describes not just the perceived readiness to move to net zero, but also the main actions to focus on. We can do this, but only through partnerships and with countries and regions working in cooperation with each other. 

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