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The great convergence. Innovation in the energy sector and and the new economy

Rome, 20/11/2019, Aspenia

The technological and economic convergence of electrical and gas grids will be what marks the future energy transition, and it will be up to a modern delivery system to create a more sustainable, efficient and circular energy system. The move is toward a change in the energy mix. Indeed, although 46% of electrical power is produced today from coal and nuclear, considerable growth in the use of renewable energies is expected for 2030. The most effective management of the transition, then, will mean keeping environmental and economic sustainability in mind.

It is going to be desirable to speed up the process of de-carbonization in Europe, where 60% of energy is obtained from renewables, not least as a result of Germany’s abandonment of nuclear. This does not mean indiscriminate de-carbonization however. The transition must be a prudent one involving the use of new technologies in order to improve energy efficiency. Sun and wind are not always available, due to changing atmospheric conditions and, therefore, energy supply will have to depend on other sources.

Many start-ups have been able to offer innovative technological alternatives over the years. Electrical grids will be able to contribute to providing the power needed by various sectors, mobility being first among them. Much is also being done with new start-ups to increase the storage capacity of the batteries used by electrical vehicles.

The U.S. and Japan have gone beyond the 50% mark for atmospheric emissions, yet account for only 17% of the global population. According to a ranking on the CO2/GDP relationship presented at the debate, Russia takes first place followed by China, the United States and India, while France is more virtuous. Some participants, however, noted that the EU accounts for only 10% of emissions since industrial delocalization has brought the level down; if Europe imports many products from Asia, it is probable the CO2 level will rise. It was also observed that Asia’s new power is mainly traceable to the use of fossil fuels such as oil, gas and coal.

Italy is not only a leader in energy efficiency technology, but must make some strategic decisions in order to enter the gas market in the most appropriate manner, taking advantage of the current window of opportunity in order to avoid a German monopoly that is counting on the ability to take a chance on lowering prices. In any case, industry is going to need gas until 2040; Italy has a high potential for diversification, but must make sure that it is not Germany that sets the rules. Russia too is a player, with its 50% market share, and Germany must manage not to be dependent on its relationship with Russia, being supported in this goal by the U.S.

There was agreement on the need for new and considerable energy investments. Estimates were of 500 billion euro for the 2021-2030 period, which would lead to an increase in GDP of between 0.3 and 0.4%.

The current mix is still dominated by fossil fuels, despite the significant increase in renewables. Future possibilities also include a new mix of revised nuclear, fusion and a sharp rise in the use of larger storage capacity electrical batteries in automobiles.

The key to accelerating the transition is to do it in a business friendly way, combining it with a more sustainable economic development, keeping in mind that climate change policies have become a terrain for ideological competition, and produce social effects that will have to be governed in order to ensure sufficient consensus.