To enable Europe’s clean energy future, we need to buckle up and couple up

Our energy future must look very different from today, if we want to meet the Paris Agreement, and become climate neutral by 2050. And Europeans do, as witnessed by the ‘Green Wave’ at the Parliamentary elections at the end of May. But climate is not only a key concern for Europe’s citizens. European Union´s leadership on the clean energy transition is also an excellent opportunity for jobs and growth across the continent.

The European Commission’s strategic long-term vision “A Clean Planet for All Europeans” shows how Europe can become climate-neutral EU by 2050, a vision that Danfoss fully supports. Now, it must be backed up by concrete, legislative measures that will result in robust action at Member State level. And central to those will be optimizing heating and cooling, which today account for half of the EU’s final energy consumption in buildings and industry.

Sector coupling is essential for flexibility and resilience

One of the principles that the Commission strategy rests on is investing in realistic, technological solutions. The good news is that the future is now when it comes to technology in heating and cooling: it exists today, and the potential is significant. In cooling alone, IEA estimates the energy saving potential of today’s space cooling at 50%.

The key to maximizing savings is to take a systems approach, to lock in savings and benefit from ‘by-products’.  Heat recovery, i.e. recycling the heat taken out in the cooling process, rather than wasting it, is an excellent example. Take your local supermarket: their refrigeration system generates a lot of excess heat.  With a heat recovery solution, the supermarket can recycle that excess heat and use it to heat up their own store or get hot tap water for free. They can also sell heat to the local heating plant and distribute it through district energy systems. Such a smart, decentral system increases the efficiency of cooling and decarbonizes heating at the same time while lowering energy costs – a win-win-win.

And in doing so, we move beyond a siloed approach to sector coupling, i.e. the idea of integrating the energy consuming sectors (buildings for heating and cooling, transport, water, and industry) with the energy-producing sectors. Coupling the biggest energy carriers, reducing their energy consumption, and storing energy  will offer us the needed flexibility and resilience that an energy system primarily built on renewables requires. By 2030, we already estimate that 45% of electricity in Europe will be generated by renewable sources, going up to 86% by 2050.

Having a strong foundation of energy efficiency is vital – that way the demand to meet in the first place is less. Add to that a growing importance of thermal energy storage and increased demand-side management – we need to have a way to store surplus energy not just for minutes for peak shaving, but also for days, weeks or even seasons. By using cooling and heating as storage capacities, we can already now increase the use of renewables and have a flexible and resilient energy grid on demand. And, by building out sector coupling and more systematically valuing synergy potentials and interlinkages between different parts of the energy system, sector coupling can make an important contribution to the cost-efficient decarbonization of the energy system. This also includes the transport area where E-mobility is developing fast right now and power-to-X is just around the corner.

Breaking down barriers and working together in smarter ways will unleash the potential

To enable Europe’s clean energy future, then, just like with the European project at large, it’s about deriving more from less by working closer together in smarter ways: to break down silos and benefit from connectivity across sectors by encouraging system thinking. By integrating heating and cooling sectors we can make huge efficiency gains, make significant inroads on decarbonizing the energy system and bring down the overall cost of the energy transition substantially along the way. The technology in the area of heating and cooling is there.

How do we move on from here to foster the full potential of sector coupling? We need an ambitious, forward-looking and future proof ‘frame’ that provides clarity and gives companies such as our certainty in terms of investments going forward. It should ensure coordination, consistency, and integration between policies, and that interlinkages between the electricity, gas and heating & cooling sectors are captured at all levels of policy.

It should also address these three specific points:

1. Remove existing barriers across technology, economy, policy and regulation, and zoom in where the potential is both most substantial and largely untapped: heating and cooling.
2. Reduce the demand of electricity consumption by accelerating the adoption of energy efficient technologies and making electricity prices competitive to other energy sources across Europe to ensure a higher uptake of renewables and storage when the energy is cheap.
3. Ensure sectors work together by having open software platforms that allow new energy models, such as demand-response, and incentivize flexible, low-carbon technologies so that companies are financially encouraged, rather than deterred, from e.g. selling their excess heat, as is often the case today.

Europe’s energy future holds plenty of potential. But we need to buckle up and speed up to move from promise to reality. And we need to do it by working together – by coupling our sectors, and our expertise across government, business and civil society.