Europe’s energy crisis: an opportunity for sustainable change
As the world looks to Glasgow for the COP26 conference on climate change, we’ll be discussing some of the changes our industry needs to make and reflecting on the COP debate on the AECOM Blog. Join the discussion on social media by following us on Twitter and LinkedIn. Find more information in our special COP26 edition of our “Future of Infrastructure” report: https://infrastructure.aecom.com
As the world comes together in Glasgow to identify lasting solutions to the dangers posed by global climate change, the UK and Europe are experiencing their worst energy crisis in decades. Huge price increases stemming largely from reduced gas supplies and an antiquated market pricing mechanism have created a discussion on increased import of gas rather than the avoidance of its use.
Yes, it’s a mess. Gas supplies should be reducing, not increasing, and our energy market should not be arranged to pay generators for the most expensive unit of energy. However, if you look at the crisis from another perspective, it can also be an opportunity to achieve sustainability. After all, if this isn’t a wake-up call, then what is?
The development of renewable sources of electrical generation capacity is already underway, but complementary measures are required to increase its deployment. The world needs to transition to green energy, and the private sector is already planning the energy storage solutions necessary to improve resilience of renewable sources and the reliability of the grid. This is happening most notably with pumped storage hydro, which offers proven large scale energy storage capability and with which AECOM is heavily engaged in through its work on the Red John project in Scotland and elsewhere. However, to support these developments, governments need to play their part through energy market reforms. For example, a cap and floor mechanism that strikes a balance between commercial incentives and risk mitigation similar to that already available for inter-continental grid inter-connectors would make such projects seem worthy of investment.
Providing mechanisms to encourage investment in projects with low carbon performance is essential to improving the resilience of our plentiful renewable energy sources. These investments will consequentially reduce use of and dependence on gas for back-up or top-up electrical generation. Not only can we massively reduce carbon emissions, we could also reduce the sorts of price volatility we are seeing today. Making these investments might require some carbon impact in construction – but will save a huge amount in the long term.