By Ariel Porat, Senior Vice President and Head of Europe at Siemens Energy
- 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, and #5 Manage the supply chain.
- The global and five regional reports, including Europe and the UK, can be read here https://www.siemens-energy.com/global/en/news/magazine/2023/energy-transition-readiness.html
The Energy Transition Readiness Index (ETRI) bridges the gap from perception to reality – and reveals the action needed to reach net zero.
Siemens Energy joined forces with Roland Berger to produce our report, and in Europe and the UK we collected data from over 400 energy experts. 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.
During the past 12 months the war in Ukraine has placed tremendous 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 and reminded us again why we need to act now. A group of European scientists, from the EU’s climate monitoring service (Copernicus), recently highlighted how urgent the situation is getting. Ten countries – including Britain, France, Italy, Spain, and Switzerland – recorded 2022 as their hottest year to date.
Our report highlights we need to place emphasis on joint implementation and work shoulder-to-shoulder to ensure progress in the following five areas: expand renewables, improve energy efficiency, strengthen the electrical grid, exploit existing infrastructure, and manage the supply chain. We understand that these challenges are about more than one individual company. We can’t do this alone, that’s why Siemens Energy was delighted to join with SSE and other businesses to sign the Powering Net Zero Pact at last year’s All-Energy Conference in Glasgow.
Our European and UK ETRI analysis also 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. Currently Europe is second to North America in its energy readiness score. So, what lessons could be learned? The US is demonstrating, with its Inflation Reduction Act, a very pragmatic approach. Simple and speedy. In contrast respondents to our report highlighted while funding is available in the EU/UK, it’s often uncertain how you access it.
For the time being, Europe and the UK presents a varied picture in terms of progress on its key energy priorities. Top of the regional priority list for most respondents though was a focus on accelerating the switch to renewables. The Iberian Peninsula (Spain & Portugal) is currently leading the way on this, with the share of renewables in their energy mix forecast to reach nearly 80% by 2030. By contrast, progress on exiting from coal is closely tied up with the specific situation in individual European countries.
The good news is that transition can happen quickly. Ten years ago, coal provided 45% of the UK’s electricity; now it’s less than 2%. But the UK’s recent Net Zero Review, led by Conservative MP Chris Skidmore, also highlights the risk of falling behind on other energy targets and, because of inconsistent policy, missing out on once in a generation net zero growth opportunity.
If Europe and the UK 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.