In EU households, 62.8% of energy consumption is for space heating, and another 15.1% for water heating, mostly powered by fossil fuels. Heating and cooling is responsible for 52% of final energy demand in Europe. So, with REPowerEU, the EU has once again strengthened support for heat pumps to achieve energy independence and climate goals. Heat pump sales in Europe grew by an unprecedented 34% in 2021, thanks to a total 2.18m heat pump units … [Read more...]
30+ nations now subsidise Heat Pumps because lifetime cost is cheaper than fossil boilers
The global growth in heat pumps can deliver almost 40% of all possible emissions cuts from heating by 2030 (with most of the rest coming from efficiency, mainly insulation), says the IEA. This is according to their âAnnounced Pledges Scenarioâ (APS) which assumes that governments carry out all of the climate commitments they have made. Keeping buildings warm produces one-tenth of global energy-related CO2 emissions. So the APSâs heat pump growth … [Read more...]
How governments are defusing political opposition to the energy transition
Whatâs holding up the energy transition? Not the hardware, says the energy sector: proven clean energy solutions abound and any bottlenecks are continually being addressed by innovation. Not the money, says the finance sector: there is more than enough investment queueing up for realistic returns. Itâs the politics: the voters and the businesses that rationally oppose what could cost them too much. So the main obstacle is the ability of … [Read more...]
How European nations are using tax to promote zero-emissions cars
Taxation is an effective way to steer people towards zero-emission cars. But there is wide variation between European countries in how this is done, and therefore the results. Griffin Carpenter at Transport & Environment (T&E) summarises their report âThe good tax guide: A comparison of car taxation in Europeâ that covers seven forms of car taxation across 31 European countries in detail. The ultimate goal should be to create a clear … [Read more...]
Energy Security: what if the UK government had not âcut the green crapâ from 2013
The UK provides an example of a government that cut back its green ambitions only to see its energy security suffer. In 2013, then-prime minister David Cameron told his ministers to âcut the green crapâ. That led successive governments to downgrade home energy efficiency, requirements for new homes to be âzero carbonâ, end subsidies for onshore wind and solar, and effectively ban onshore wind in England. What if the UK had stayed on its … [Read more...]
Europeâs decoupling of electricity and gas prices: the crisis is temporary, so why do it?
The debate is intensifying over how to decouple power prices from the extraordinarily high natural gas prices in Europe. Simona Benedettini and Carlo Stagnaro warn that the current problem of high prices is not caused by the mis-functioning of electricity markets, but by the exceptional trend in gas prices. So should the markets be re-designed at all? Will we lose the benefits of the current design, one being the reliable profits that renewables … [Read more...]
Is a Carbon Tax the best way to decarbonise the Grid?
Severin Borenstein at the Energy Institute at Haas and Ryan Kellogg at the University of Chicago question whether carbon pricing is the best way to decarbonise the electricity grid. The authors did an empirical analysis of all of the fossil plants in the US. It shows that a CES (clean electricity standard) or zero-emissions subsidies would close down fossil plants in almost the same order as a carbon tax. So using alternative policy tools can … [Read more...]
Donât cap gas prices for consumers. It wonât reduce demand. Instead, subsidies must reward cuts in gas use
European nations are considering capping the price of gas that consumers pay, a subsidy that governments will pay for, to ensure households donât freeze this winter. Daniel Gros at CEPS warns that this strategy will remove the incentive for consumers to cut their gas use, keeping international market prices high. Instead, governments should incentivise a reduction in gas use. Gros has modelled two strategies. The first is to pay households for … [Read more...]
The light bulb transition: when standards and subsidies promote sub-optimal technologies
This article is for those who want to understand the importance of timing: when is the right time to impose new standards and start/stop subsidies, to optimise the pathway to maximum efficiency? The light bulb transition of the last two decades is one of the successes of energy efficiency: from the old incandescents (15 lumens/watt) to halogen incandescents and CFLs, and then, finally, to LEDs (80 lumens/watt and prices falling 90% in ten years). … [Read more...]
Do e-bike subsidies lift sales, change habits and cut emissions?
What happened when Sweden introduced a 25% rebate on the cost of an e-bike for 12 months over 2017-18? Lucas Davis at the Haas School of Business reviews a study that digs into the consequences. Sales increased by 70%. E-bike prices remained steady, so the sellers didnât simply raise prices to eat up the rebate. The study estimates that although a third of those sales would have âhappened anywayâ (i.e. no additionality) the remaining two-thirds … [Read more...]
Electricity markets with high shares of Wind and Solar will need Nuclear
When electricity markets have high shares of wind and solar â the goal of many regions around the world â is it more efficient to build a nuclear power plant instead of investing further in more renewable capacity? The answer is yes, according to a study by Machiel Mulder, Xinyu Li and Arjen Veenstra at the University of Groningen. In essence, itâs because nuclear benefits from the high (scarcity) prices when thereâs little wind or sunshine. Here … [Read more...]
Worldâs biggest Carbon Capture project: Shute Creekâs âsell or ventâ business model isnât working
ExxonMobilâs Shute Creek CCUS facility is the worldâs largest carbon capture project. But since its launch in the 1980s half of that CO2 has been vented into the atmosphere, with most of the rest sold for pumping it underground to push out more oil from depleted wells (called Enhanced Oil Recovery). Only 3% has been sequestered underground, explain Bruce Robertson and Milad Mousavian at IEEFA, following their study based on publicly available … [Read more...]
What is Energy Security? And what it isnât
What is energy security? Thatâs what Maximilian Auffhammer at the Energy Institute at Haas asks and tries to answer, and he starts by saying what it is not and what solutions should not be used. Not importing wonât help because prices are global. âEnergy securityâ canât be taxed as an externality for much the same reason. Subsidising high prices for consumers decreases the value of energy efficiency investments. Instead, Auffhammer says the … [Read more...]
Germany: can 100% renewable power reduce energy costs within the decade?
A bold report is presented by Thure Traber, Hans-Josef Fell and Sophie Marquitan at Energy Watch Group. It says that a 100% renewable power system for Germany can undercut fossil power within this decade. The authors look at the full cost of fossil power, including subsidies. Importantly, they explain how unit costs will rise further, as demand declines, due to the decreasing utilisation of its expensive infrastructure. Meanwhile, total system … [Read more...]
Clean transport in Europe: key trends to watch out for
T&Eâs quarterly trends series gives a snapshot of the key developments that will define the future of clean transport in Europe. And what Europe does â given it wants to lead this field â should influence what happens worldwide. T&Eâs Thomas Earl brings attention to four issues. First, proven progress in this major sector makes it a contender for a significant role in Europeâs new industrial strategy. It ranges from battery and … [Read more...]
