Fiscal stimulus packages in Europe to “build back better” after the coronavirus pandemic provide an opportunity for initiating a transformational and green recovery with the creation of green jobs. One such investment opportunity is in sector coupling.
Sector coupling is the electrification of more areas of the economy—such as transport, buildings and industry—by plugging them directly into the power grid or switching to green hydrogen produced from renewables (indirect electrification).
Were such a radical change to happen in Europe, substantial progress could be made towards the continent becoming climate-neutral by 2050, according to a new study coordinated by Bloomberg.
The electrification of transport, buildings and industry could enable these sectors to shift away from dependence on fossil fuels in line with Sustainable Development Goal 13 (Climate action).
“Sector coupling across these sectors in Europe is possible, and could significantly reduce greenhouse gas emissions by 2050,” says Niklas Hagelberg, a United Nations Environment Programme (UNEP) climate change specialist.
“But it will not happen without mindset change and policy action to stimulate public acceptance of grid extension. If investments are properly planned and targeted, the dividends in terms of sustainable green recovery and jobs could be huge,” he adds.
According to the study, countries like Germany and the United Kingdom would almost fully switch to low-carbon technologies by 2050, thanks to cheap renewables. “As a result, sector coupling could lower emissions by 60 per cent over 2020–2050 across transport, buildings and industry. This would equate to a 71 per cent reduction on 1990 levels,” it says.
The study also highlights the role of hydrogen in sector coupling.
“Hydrogen is crucial to sector coupling, [so] energy policymakers and regulators should seek to facilitate the increased crossover between the power and natural gas systems, and work to reduce technical and regulatory barriers to the injection of hydrogen into the gas grid,” says the study, which suggests that the buildings sector, if sufficiently incentivized, could overtake transport in terms of electrification by 2050 in Europe.
Governments would need to help create a market for green hydrogen, to drive down electrolyzer costs, and provide strong incentives for all consumers to minimize net peak electricity demand, the study says.
While sector coupling could make a major contribution towards net zero CO2 emissions, it is not a silver bullet. Policymakers would need to tackle the hardest-to-abate sectors such as aviation, shipping, long-haul road transport and high-temperature industrial processes which are likely to require other solutions.
The mining and burning of coal, oil and gas produces toxic pollutants which contribute to air pollution, and air pollution and global heating have adverse effects on the planet’s natural resources and human health. Millions of people around the world die prematurely because of air pollution.