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Greater electrification of demand with renewables will keep the balance in the market

Last week a group of industry and civil society organisations signed a declaration urging European political representatives to boost the use of electricity produced from renewable sources to achieve the goal of zero emissions by 2050. For AleaSoft, this declaration confirms that the market balance will be maintained in the future and that photovoltaic auctions are not indispensable. What is needed is to stimulate the consumption of clean and renewable electricity.


On 6 November, a group of 100 organisations from the main industrial sectors and civil society signed a declaration aimed at appealing to EU policy-makers on the importance of electricity produced from renewable sources for achieving the 2050 zero emission target.

In the declaration, the signatories list the benefits of smart electrification from clean energy sources. Firstly, it will make it possible to reduce the import of fossil fuels, the current cost of which for European citizens is more than 5 billion euros each week.

Electrification will also lead to significant energy savings, as heat pumps and electric vehicles, for example, are more efficient than their fossil fuel combustion counterparts. In addition, the intelligent management of electric air conditioning systems and the recharging of electric vehicles will allow the intelligent management of the large amount of energy generated from renewable sources, improving the flexibility of demand and reinforcing the responsiveness and robustness of the electrical system. Also on the demand side, digitalisation and storage systems will enable users to play an active role in managing their energy consumption, becoming prosumers and reducing costs.

The intention of the declaration is that electrification will drive technological development that will allow Europe to maintain its industrial leadership, thanks to digitisation, the promotion of electromobility, investments in solutions related to renewable, intelligent and clean electricity and the use of green hydrogen. The generation of hydrogen, thanks to affordable electricity from renewable sources, will be a very important element in the decarbonisation of both transport and industry and will also provide energy storage in the medium and long term.

Last but not least, electrification will also improve air quality, which is of vital importance for health and the environment.

Taking into account all the above advantages, the declaration urges the European authorities to promote electrification in order to make the European Green Deal, proposed by the new President of the European Commission, Ursula von der Leyen, meaningful. Specifically, it urges:

Incorporate electricity produced from renewable sources in sectors such as transport, heating and cooling.

Support a sound industrial strategy to ensure the elimination of carbon emissions while strengthening European industrial leadership in the sector.

Promote further digitisation of the sector.

Ensure investments in network infrastructure, especially smart grids, to support the energy transition.

Support the growth of electric vehicles by accelerating the deployment of charging infrastructure.

Implement strategies to increase the energy efficiency of buildings.

Secure funding to support regions that have a different starting point in the energy transition process.

Modernise the energy tax regime to accelerate decarbonisation.

Allocate funds for research and innovation of solutions aimed at mitigating the effects of climate change.

The declaration was driven by The Electrification Alliance, a group created in 2017, whose members are European Association for Electromobility (AVERE), European Association of Electrical Contractors (AIE), European Climate Foundation (ECF), European Copper Institute, Eurelectric, European Heat Pump Association (EHPA), Smart Energy Europe (smartEn), SolarPower Europe, of which UNEF and APPA are members, and WindEurope. Signatories include Acciona, AEE, Axpo, EDF, EDP, ENEL, to which Endesa, E.ON, Iberdrola, Luminus, Naturgy and Siemens Gamesa belong.

According to AleaSoft, the massive electrification of all sectors promulgated by the declaration is necessary to complement the spectacular increase expected in the production of electricity from renewable sources. Although, for AleaSoft, it is necessary to stimulate the consumption of green energy, as proposed by the signatories, the market itself will favor it by offering clean energy and more attractive prices. The increase in demand due to these prices will, at the same time, allow electricity market prices to remain in balance, avoiding the feared cannibalization effect of photovoltaics.

This initiative only confirms that the balance of the market, between supply and demand, will be maintained with the increase in renewable electricity generation, as the Spanish consulting firm has commented on previous occasions. In addition, for AleaSoft, this statement demonstrates that there is no need for photovoltaic auctions. Better to use all those resources to stimulate electrification and decarbonization of consumption.

AleaSoft’s forecasting models, which cover a horizon of up to 30 years, project into the future this market balance between demand and supply of electricity, taking into account both the increase in the production capacity of renewables and the increase in electricity consumption that will involve the electrification referred to in the statement.

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