Europe’s energy transition is a ‘prisoner of rules’ created for 2050 scenarios

World Energy Congress told that continuously adding new targets is stalling the energy transition

European policymakers have made the region’s energy transition “a prisoner of rules” that have been created to fulfil a 2050 scenario, yet are not fit for purpose today.

“We are a prisoner of our own documentation… of everything we’ve written down,” said Coby van der Linde, Director of Dutch thinktank Clingendael International Energy Programme (CIEP).

Van der Linde told the World Energy Congress in Rotterdam: “I’m a paper-pusher myself and we love to write down things and we have a lot of people writing down things.

“We’ve produced a lot of plans about 2050 and then we do ‘back-casting’. We do it in a technologically-efficient way… and we’ve forgotten all about how to make it viable economically and for society.

She said what is missing “is the insight” and urged policymakers to “move away from the Excel sheet… inactivate all the paper pushers – and start doing”.

Read now: WEC chief Wilkinson redefines and reclaims the phrase ‘energy transition’

Van der Linde was taking part in a panel discussion on the second day of the congress called Navigating the Energy Transition Puzzle: Perfect Storms and Tipping Points.

By her own admission she has “been around the block a couple of times”: she was a member of the Dutch Energy Council for 10 years, was a guest researcher at the Oxford Institute for Energy Studies and also Chatham House among others, and has been director of CIEP since 2001.

She said that 30 years ago, it would have been impossible to predict the energy landscape of today: “So how can we be so sure to say what 2050 will look like?”

“I feel very uncomfortable with the way it is being discussed and what is being done. We need to do it step by step. There’s going to be bumps, twists and turns; two steps forward, one step back; but you need to keep moving and we can’t do that if we are a prisoner of rules that might apply in 2050 when we think they will be fit for purpose, but they are not now.”

Unfit for 55?

To illustrate the confusion, she believes is being caused by multiple strategies chasing a predicted outcome, she said: If I look at Europe and the Fit for 55 plans, if I were in industry or an investor, I would need 27 law firms to figure out which rules apply to me, which ones are conflicting and how to get around them.”

“We have to look at how the technologies actually work, how the investments get negotiated, how companies can mitigate the risks in the value chain, be it with a consortium or long-term contracts.

But she said in Europe “we are not allowed to discuss these things, because there is a certain market model in mind which fits perhaps 2050. But the bad news is: it’s only 2024.”

She said in Europe we were in the mindset of: “If we write a rule: it’s for eternity.”

Oil and gas is ‘innovation-poor and that needs to change’ WEC is told

She said this scenario was particularly problematic for the oil and gas sector, which most people accept needs to be an active participant, investor and innovator in energy transitions.

“From a European point of view, it should be accepted that they are a crucial part of the energy transition. But every time they make an investment, it’s never good enough.”

Joining Van der Linde on the panel was Serge Colle, EY’s market leader on global energy and resources.

He said that for the oil and gas industry, “there is a sprint it needs to run on decarbonising its operations” and added that a strong start was made to this race at COP28 last year in Dubai.

And he added that “when it comes to the marathon, we need the oil and gas companies to lean in heavily, because they have the balance sheet, they have the risk appetite, and they have the capabilities. If you look at a company like Equinor, they are leaders in floating technologies – we need them to develop floating offshore wind.”

EDF’s chief executive Luc Remont also spoke about a need for speed across the whole energy sector. “The question is whether we are moving fast enough versus the phenomenon that we are trying to fight, which is global warming.

He said he experienced first hand the effect of climate change in the United Arab Emirates last week, when it was hit by its heaviest rainfall in 70 years which caused severe flooding.

“I was in the UAE last week and the phenomenon was huge – it was referred to as a millennial phenomenon.”

He said that one of EDF’s wind farms in the region had experience winds “that were beyond the envelope of the specs that were supposed to be seen in a lifetime. So this phenomenon is accelerating – it is a reality – and it is a timebomb for humanity.

Speed of transition

“Is our speed of transition fast enough to face this challenge? The answer is ‘no’. Yes, we are talking; yes, the technologies are there; yes, the projects are working – but the speed of transition? We are not moving the needle yet.

The UAE perspective of climate change was also delivered by Fatema Al Nuaimi, Executive Vice President of Downstream Business Management at Abu Dhabi National Oil Compacy (ADNOC).

She said: “There’s not a single person I’ve met at this conference so far who did not ask about what’s happening in the UAE [following the floods]. This is a part of the world where we are not used to having climate effects: it show’s nobody is secure from the changes and the patterns of weather.”

Later at the Congress, Van der Linde was in the moderator’s chair for another panel discussion which had E.ON chief executive Leonhard Birnbaum among the panelists.

He echoed Van Der Linde’s previous sentiments on 2050 targets.

“We are increasing the number of targets, the aggressiveness of targets and the speed of targets every other week.

“We are planning too much ahead for the next 25 years. We should work against the trends and do our best in the short term. Get working on today: see whether we can build momentum and adjust our targets accordingly.”

And he too asked: “Why do we now know how the energy system will look like in 2045.”

He was keen to stress that he was “absolutely supportive of a European approach. There is stuff where the EU can make a positive difference: we need significantly more European approaches in a number of areas. But we need significantly less of what we are doing today.”

And he added: If you are here at World Energy Congress, it teaches you humility and modesty. You realise maybe we should question what we are doing, instead of just adding year after year on top of it.”

Originally published on enlit.world