The discussion around energy sector companies is quite black-and-white. The good ones produce electricity with wind and solar energy, while the bad ones use fossil fuels. With this good/bad approach, the aim has been to make companies heroes or villains without consideration of the broader social issues. We are living in an era of finger-pointing, but we should be uniting together to find solutions to reduce emissions and prevent climate warming.
The most extreme voices are demanding a completely emissions-free energy system here and now. Forgotten in the heated antagonism is that modern society cannot withstand continuous power outages, and industry and ordinary people will not tolerate uncontrolled increases in electricity prices. I’m one of those who want to wake up to a warm home in the morning, switch on the lights, make some coffee, grab some breakfast from the refrigerator, read the news from a fully charged smart device, etc. I wouldn’t want to plan my day around what time electricity is available.
Big changes require responsible, societal decisions
Our energy production system has been created around the needs of society, i.e. all of us. The aim has been to electrify society to be able to industrialise, grow and develop. The demand for electricity has been satisfied by choosing the solution that is best for each country. Usually countries have chosen to use their own natural resources; for some, this has meant the use of fossil fuels. People were satisfied with these solutions until the awareness around climate warming and the impacts of carbon dioxide emissions increased and the pressure for change grew.
A current example of this is Germany, where quick actions to discontinue coal power are being demanded. When following the discussion around the phasing out of brown and black coal, keep in mind that Germany has made a political decision to give up nuclear power by 2022 and coal power by 2038, at the latest. Nuclear and coal power together account for about 50 per cent of the country’s electricity production, so the scale is huge. And when energy production is being shutdown, it will impact not only companies, but also communities and individuals, as well as the vitality of municipalities and cities, tax revenue, services, jobs, and the livelihood of families. Definitely not an easy equation! This requires responsible and comprehensive decision-making from the policy makers. In my view, rather than focusing on closing and discontinuing, the discussion should focus on replacing the old production – because the demand for electricity is not going to disappear.
A shared concern about climate change
Citizens concerned about climate change are organising demonstrations around the world every week. These people are active for a good cause because in the efforts to combat climate change, challenging and raising the existing bar is needed right now. But finger-pointing isn’t the right solution, it’s collaboration.
I can attest to the fact that we in the energy sector are committed to finding solutions. I believe that the transition towards an emissions-free energy system in Europe is already well under way. Among the clear evidence of this is the fact that the price increase in EU emissions allowances resulted in a more than 80-million-tonne reduction in greenhouse gas emissions in Europe last year. That is significantly more than the corresponding total emissions in Finland. This has happened without any targeted national bans. In fact, I think that the tightening of the EU’s emissions trading is the best and fastest way to reduce Europe’s emissions from electricity and heat production. Today, less than half of Europe’s greenhouse gas emissions are within the sphere of the EU’s emissions trading. Now building-specific heating and cooling as well as transport also must be included in emissions trading.
My hope going forward is that the work to combat climate change can be better at uniting – not dividing – the different stakeholder groups. Finger-pointing doesn’t help our planet. We need to work together to come up with effective solutions.
I will regularly pick a few themes from the ongoing discussion related to the energy transition and will give Fortum’s views about them. If you, our readers, have any energy transition-related topics for me or our experts, please email your suggestions to: [email protected]. We’d be pleased to share Fortum’s views on them.