Europe has made a ‘major mistake’ on slow electrification, IEA chief warns
The head of the International Energy Agency has warned Europe made a “major mistake” by failing to end its economy reliance on imported fossil fuels quickly enough since the 2022 energy crunch.
Fatih Birol said Europe’s low electrification rate, electricity’s share of the energy consumed in the EU, of roughly 23 per cent is holding back its competitiveness and economic “sovereignty”.
Speaking to the Financial Times, Birol said: “This is in my view a major mistake for Europe.
“In general, I would have hoped and expected that Europe would have been more responsive to this crisis”.
Birol said Europe must electrify its economy faster after facing two energy crises in less than five years, and seek to copy countries including China, Japan and South Korea, who have an electrification rate of more than 30 per cent.
Europe’s energy commissioner Dan Jorgenson also admitted the EU’s heating, transport and industrial sectors remain reliant on imported fossil fuels.
This reliance has left states, including the UK, scrambling amid the conflict in the Middle East, after US strikes damaged oil fields and other major ports, constraining global supply.
In March, the International Energy Agency (IEA) admitted the war was “creating a major energy crisis” and urged people to work from home and limit commuting in a bid to limit oil use.
Lowering taxes
The Commission will lay out plans next week to require countries to lower taxes on electricity and offer support to encourage households to adopt heat pumps, electric cars and other green technologies.
The plans would partly be achieved by mandating that electricity be taxed less heavily than fossil fuels, but these measures could prove expensive for countries that are heavily reliant on taxation coming from electricity bills.
Birol also warned that ongoing issues with grid capacity are holding back the EU’s electrification push, with grid congestion in the region coming from problems at both regional and national levels.
The UK and the North Sea
The UK has also found itself embroiled in debate over the energy crisis, as energy secretary Ed Miliband remains staunchly opposed to fresh drilling in the North Sea and pushes his net zero agenda.
Incoming prime minister Andy Burnham is also receiving requests from Labour MPs to change the government’s policy on North Sea oil and gas but remains “non-committal” according to one Scottish Labour MP.
The growing push from the Labour bloc and industry figures to allow fresh drilling in the North Sea, follows warnings from the owner of the Jackdaw gas platform that the UK could face a domestic supply shortage this winter if production is not approved.
The industry regulator is considering revised application for production at Jackdaw and Adura’s Rosebank oil field, after a court ruled both had been unlawfully approved.
Adura chief executive, Neil McCulloch, said a failure to green light production would leave the UK with limited options in the face of “a gas supply emergency”.