THE ENERGY CHALLENGE

2019 was the second hottest year on record, at only 0.04 °C below the 2016 record, with a global average temperature of over 1.1°C above the average since the late 19th century. In addition, the decade that just ended was the warmest in history. Against this backdrop, fossil fuels represent the main driver of global warming. Already in 2018, the Intergovernmental Panel on Climate Change (IPCC) had pleaded with the international community to respect the limit of 1.5°C—the key threshold outlined in the Paris agreement on climate change beyond which global warming would cause devastating consequences for natural ecosystems and humanity.

The IPCC says that the next decade will be decisive in limiting global warming, however, despite this warning, the most recent reports on climate change point to a critical scenario when it comes to global warming. Just consider that, according to the latest estimates, the current scenario will bring Earth towards a temperature increase of 3 to 5 °C by the end of the century.
 

While in 2019 global energy demand had risen by 2.3% compared to 2018, the International Energy Agency (IEA) has estimated a 5% decline for 2020. In the “World Energy Outlook 2020”, which analyses the changes in the energy industry caused by the economic crisis and the global pandemic, the IEA estimates that global energy-related CO2 emissions will fall back to the levels of 10 years ago, with an annual contraction of 2.4 Gt. These changes are driven primarily by the slowdown in economic activity due to the restrictions and lockdowns implemented in several countries to contain the Covid-19 pandemic, a crisis that will cause global GDP to shrink by 4.4% in 2020.

 

According to the forecasts released in October by the World Economic Forum, in 2021 the world economy will rebound to pre-crisis levels, albeit with different impacts across the various countries. Meanwhile, energy demand and emissions will return to pre-Covid levels: respectively in 2023, and CO2 emissions—thanks also to the constantly growing share of renewable sources—in 2027. Across advanced economies, energy use has risen modestly after the first quarter, especially in the EU and the USA, where the crisis has accelerated the growth of renewables and the decline of coal. Meanwhile, Asia saw increasing demand for all fuels, including coal, due to the rapid economic recovery and some early successes in managing the pandemic, especially in China. Despite the initial slowdown, global emissions will rise once again, reaching 36 Gt by 2030.

European Union has set fo itself the goal of becoming climate-neutral by 2050 by defining a series of strategic steps to decarbonise the energy sector. These include the European Hydrogen Strategy. Hydrogen is an energy vector that is capable of contributing to the sustainability of industrial processes, achieving zero-emission mobility, and reducing the emissions generated by domestic heating. Besides achieving climate neutrality, the Strategy aims to bring the sector to technological maturity through a 14% share of the EU’s energy mix by 2050—a sevenfold increase over today (2%).

Making buildings more efficient is key to meeting the challenge of making Europe climate-neutral by 2050, since in 2019 the residential sector alone accounted for nearly 17% of global CO2 emissions. Energy use in buildings is influenced by several factors, including: the surface area, appliances, and heating and cooling requirements, resulting in a significant variation across climate regions. It is estimated that in the areas where the climate makes more heating necessary, per capita CO2 emissions are up to three times higher than in temperate areas. For instance, in Eastern Europe, replacing coal boilers with new-generation ones will bring benefits both in this regard as well as in terms of energy savings.

The solutions that could contribute to a significant reduction in energy requirements and emissions include district heating systems. The energy fed into the grid can be generated in several ways, ranging from co-generation plants to the recovery of heat produced at the urban level that remains minimally used (e.g., transportation systems, wastewater networks). By leveraging the large-scale installation of heat pumps and renewable heat generation technology, by 2050 district heating could provide half of Europe’s heating demand, compared to 12% today19.

Energy communities also play an increasingly important role. These are localised communities of utilities (private, public, or mixed) in which end users, market players, and local governments actively co-operate to develop a smart energy supply, promoting the optimisation of the use of renewable sources and technological innovation. There are around 3,000 communities across Europe, of which a third are in Germany and 400 in the Netherlands20. The steady growth in these numbers is supported by the implementation of dedicated policies, the reduction in the costs of renewable energy, the rise of the IoT, and growing awareness about the environment as well as objectives such as selfsufficiency, resilience, and autonomy.