Transforming Into a Modern, Resilient Europe

NORTHAMPTON, MA / ACCESSWIRE / August 14, 2024 / Schneider Electric
Schneider Electric

Becoming climate neutral is a massive undertaking for anyone, let alone an entire continent. But, that's exactly what the EU is doing. In recent years, the European Commission has driven an ambitious decarbonization policy, striving to create a more resilient Europe and become the first climate-neutral continent in the world.

Foto: Accesswire

This goal comes from a time of layered crises. The pandemic tested the EU's integrity, while the invasion of Ukraine brought warfare to its borders and crippled energy security. The economy has also suffered. For the past five years, growth in the European Union (EU) has been on average 1% lower than that of the U.S. and will continue to trail by around 0.8% in the long term, according to projections. One reason is the rise of energy prices across the zone. The price of natural gas in the EU is still three times higher than in 2019, and about five times that of the U.S.

To reach its target, the EU must first solve a triad of problems involving energy: security, industrial competitiveness, and decarbonization. These issues have one common denominator: the EU's dependence on imported fossil fuels.

This dependence doesn't just wreck the environment, it comes at a steep price - and opportunity cost. When the EU's energy import bill soared, over 800 billion euros went to buying fossil fuel imports at inflated prices. For comparison, that's almost triple the EU's defense spending in 2023. This money could've been spent on the energy transition instead.

Resilient Europe: A modern economy built on modern technologies

The demand-side of the equation - how energy is consumed by end-users - is a powerful lever for decarbonization, deserving much more attention. Here, we must encourage the swift adoption of both electrification and digitalization. By combining these modern technologies, industries can optimize the way they use energy, driving a faster transition away from fossil fuels and toward sustainable, affordable, and secure energy resources.

With the Green Deal, the EU developed the right framework to address its energy challenges. But, there's a long road ahead. For example, nearly 75% of the building stock in Europe isn't energy efficient, with only about 1% undergoing renovation each year.

Renewed EU institutions must tighten their focus on demand-side management of the energy sector, while ensuring the ‘green' transformation of society doesn't impede competitiveness. To these institutions, we propose three priorities to make a more resilient Europe.