New European Union (EU) plans to accelerate the adoption of renewables and long-term fixed contracts is a short-sighted ‘sticking plaster’ for an ongoing problem, says an energy sector expert.
The EU is reforming its internal electricity market to allow greater access to greener energy sources as part of a longer-term strategy to triple renewable adoption by 2030. Alongside this, the EU Commission is aiming to foster pricing stability by reducing industry’s exposure to financial volatility through market-based guarantees on renewable power production.
Yet while Chris Rason, Managing Director, Aggreko Energy Services, welcomed the EU taking action to protect businesses, he warned that this was a temporary measure that would not resolve the issue of rising energy costs. Specifically, he warns that if the transition to greener energy revolves solely around grid-based power and ailing national infrastructure, it will be more difficult for businesses to remain resilient to price increases.
“Taking action is better than doing nothing at all, but unfortunately, the Commission’s solution is a sticking plaster that does not address the root of the problem,” he explains. “These ambitious renewables targets, welcome as they are, will at some point, result in rising grid costs that could hugely impact European industry’s competitiveness.
“These companies cannot remain idle and wait for a financial hit. Instead, businesses must take steps ahead of the 2030 deadline to establish decentralised energy grids. Powered by green solutions, these can help mitigate anticipated grid price rises caused by the move away from fossil fuels. As such, those who decentralise their power supply in good time will be best-placed to manage this necessary transition with as little impact on their bottom lines as possible.”
To best manage the shift to greener power solutions, Chris is advocating for company utility equipment stakeholders to engage suppliers in the temporary modular power market. He believes the dynamism hire provides suits organisations exploring greener energy generation technology, allowing for bespoke set-ups that suit facility power demands without the stranded asset risks associated with permanent installations.
“The green power market is still maturing, and has previously been hamstrung by buyers’ remorse,” he concludes. “This is understandable – with new innovations constantly appearing, organisations that purchase sustainable generators and battery solutions now may find their technology swiftly outmoded. So, to best guard against the expected price rises, organisations should instead look for a partner that can provide technologies and solutions on a hire basis.
“Alongside allowing companies to react swiftly to the volatile grid energy market, these equipment procurement arrangements can allow trial periods that would otherwise be impossible for cutting-edge net zero technologies. If industry is to avoid this pricing cliff-edge caused by the continent-wide green grid power transition, this sort of innovative thinking around hire strategies will be vital.”
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