Addressing soaring energy prices and energy transition in Europe

IIASA

Europe is in the grip of an unprecedented energy crisis, leading some to call for a renewed focus on fossil fuels to supply much needed electricity for the coming winter months. A statement released by the Group of Chief Scientific Advisors to the European Commission however highlights that accelerating the transition to a low-carbon energy system is a solution that can actually lower energy prices in the long term.

Energy prices in Europe have soared in recent months. Reasons include gas shortages and rising global energy demands as economies bounce back from the COVID-19 pandemic.

In their statement, the advisors stress the need to achieve a fair and effective clean energy transition to mitigate the climate crisis, while protecting those who are in danger of suffering from energy poverty. The 54 million Europeans who risk suffering from the consequences of energy poverty must not be left behind. To achieve this, the advisors say, Europe must put people at the center of energy policy and rally the whole of society behind this common goal. Reacting to high energy prices plays a pivotal role and should involve immediate support for households at risk of energy poverty along with investments to increase the share of low-carbon energy production in the long term.

“As high energy prices threaten millions of Europeans at risk of energy poverty, achieving a high share of affordable, sustainable, and renewable energy to provide sufficient energy services is more important and urgent than ever. This must be done with a people-centric approach, that leaves no one behind,” says IIASA Emeritus Research Scholar Nebojsa Nakicenovic, Deputy Chair of the Group of Chief Scientific Advisors and lead Advisor for the statement.

The advisors point out that an increased share of renewable energy, which is cheaper to produce than gas and coal, led to a drop in wholesale electricity prices in 2019 and that experts are confident that low-carbon sources like wind and solar are key to providing everyone with universal access to clean, fair, and modern energy services. Growing the share of low-carbon energy will also greatly reduce Europe’s dependence on fossil fuel imports and make the system more resilient to external threats. The EU should mitigate the effects of new dependencies (e.g., on key metals needed for low-carbon technologies) by boosting up recycling and researching less expensive and more accessible alternatives for the most critical materials.

The statement was prepared following a request from the Commission’s Vice-President for Inter-institutional Relations and Foresight, Maroš Šefčovič. It resonates with the recent Commission Communication on energy prices published on 13 October, which includes a “toolbox” that the EU and its Member States can use to address the immediate impact of current price increases, and further strengthen resilience against future shocks. In particular, the advisors support the proposal to invest carbon-pricing revenue in addressing energy poverty, spurring innovation, and creating employment.

The statement is based on the advisors’ June 2021 Scientific Opinion A Systemic Approach to the Energy Transition in Europe, and informed by the Evidence Review Report by the Horizon 2020-funded Scientific Advice for Policy by European Academies (SAPEA) consortium of European academies, which forms part of the Commission’s Scientific Advice Mechanism.

Adapted from a statement by the EU Chief Scientific Advisors sent out by the European Commission. Read the full statement here.

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