Europe has 500GW of renewable energy capacity but why isn’t it connected?

euronews (in English)

The CEO of Hitachi Energy explains on the Big Question why Europe, and the rest of the world, needs to urgently invest in power grids.

Transcript

00:00We have in Europe more than 500 gigawatts of renewable resources which are ready to connect

00:04but cannot be connected because the grid is not there.

00:07Regulations were built to save taxpayers money, not to over invest.

00:11So it's shuttling paper which is time consuming, it's expensive.

00:15This is not fit for the purpose anymore.

00:23Take one.

00:25Hitachi.

00:26Hello, I'm Angela Barnes.

00:27Welcome to The Big Question.

00:30Well, this is the show on Euronews where we speak to some of the most

00:35influential leaders in business.

00:37And today, I'm joined by Andreas Scheirenbeck, CEO of Hitachi Energy.

00:43Andreas, thank you very much for joining us on the program.

00:46It's a pleasure to have you with us.

00:48Now, there's been a lot going on Donald Trump and his executive orders

00:53and he talked about energy.

00:55And you have been very vocal about the need for urgent investment in power grids.

01:00Let's start with that.

01:02Because Andreas, can you just explain to us how critical the situation is in Europe

01:08and what are the immediate consequences if action isn't taken now?

01:12It's a very good question.

01:14It's not only the situation in Europe, it's the same situation in North America

01:18and all over the world.

01:19We suddenly find ourselves in a situation where we need much more electrical energy

01:24than we thought.

01:25I think the increase is estimated to be three to four times higher than the primary energy.

01:30And some people call it even the age of electricity coming up.

01:34And we have to fulfill the needs.

01:36And since we get into a situation a little bit unprepared,

01:39now we're struggling to fulfill the needs.

01:42So we need to add more generation assets.

01:43We need to add more grid.

01:45We have to produce the products.

01:47And there's a gap.

01:48Well, with that gap, given the first year-long breach of the 1.5 degree Celsius target

01:55and current infrastructure challenges,

01:58do you believe it's still possible to meet the Paris Accord goals by 2030

02:02without drastic changes?

02:04And of course, Donald Trump's pulling the US out of the Paris Accord.

02:07So what do you think?

02:08Is it still possible to meet that goal?

02:10I think it's still possible.

02:11I was in a podium discussion with a scientist and she explained,

02:14look, we have to meet that target over a longer period of time.

02:17Missing it once is not good, but it's not the end of the world.

02:21So we still have to continue with our efforts.

02:24And yes, from that point of view, I think we're a little bit responsible for that.

02:28We haven't expanded the grid as necessary.

02:30We have in Europe more than 500 gigawatts of renewable resources,

02:33which are ready to connect but cannot be connected because the grid is not there.

02:38So we're in a kind of race.

02:47You've compared the shift as well previously, Andreas,

02:49I've seen from the energy super cycle to the era of electricity,

02:53to the rise of the Internet in the 1990s.

02:55Can you just elaborate on this parallel?

02:58And what opportunities and risks do you see for businesses

03:02and governments in this transformation?

03:04I think the big opportunity is that now we understand that we have not only add renewables,

03:10we have to build the foundations, the grid as well.

03:12Otherwise, the whole thing is pointless.

03:15But we have to change and very often adapt is that we have to become faster.

03:19You know, the energy business was in the last 15-20 years a kind of boring game,

03:24you know, slow development.

03:26There was time for decisions.

03:28Actually, regulations were built to save taxpayers money, not to overinvest.

03:32And now we have to change it.

03:34We have to work together in collaboration, regulators, industry, customers, everybody

03:40to take decisions faster, because the cost of not doing anything

03:44or not being fast enough is, from my point of view, higher than the cost of investing now.

03:49So would you say, just touching there again on regulation,

03:52is that one of the biggest obstacles to moving things forward with,

03:56for example, the daunting task in expanding grid capacity?

03:59It's definitely one of these things, you know,

04:02grid expansion projects take normally seven to eight years,

04:05and only two to three years are really construction.

04:08Five to six years is permitting.

04:10So it's shuttling paper, which is time consuming.

04:14It's expensive.

04:15And it's definitely not what it should be.

04:18We can do that faster.

04:19It was right in a time where we were probably in a different world.

04:23But now I think we should sit together and say,

04:24look, let's adapt that together to become faster and therefore cheaper.

04:29And that permitting problem, is that unique to Europe?

04:31How long does it take, for example, for permits in the US?

04:34How does it compare?

04:35Is it?

04:36You know, I think it's a global problem.

04:38Of course, it's a local problem, because regulators are local institutions.

04:42But they always were set up in the same set of environment.

04:46Prevent taxpayers' money to be overspent, keep it in check.

04:50But the situation has changed, you know.

04:53The planning horizon for grid expansion was 10 years,

04:56and the grid project takes eight years.

04:58You can imagine what happens if you suddenly have just more demand.

05:01This is not fit for the purpose anymore.

05:06And let's talk about what Hitachi Energy is doing to drive the energy transition

05:16through technological innovation.

05:18What role do you see your company playing in overcoming gridlocks

05:22and renewable integration challenges?

05:25I think, as Hitachi, we play multiple roles.

05:28First of all, we are investing to expanding our production capacity.

05:31We're developing new technology to connecting grids and connecting renewables

05:36in a bigger scale and reducing losses there.

05:39But as well, it's our task to talk to the stakeholders, to regulators,

05:43to our customers, to foster this collaboration,

05:45to say, look, we want to achieve your one thing, so let's do it together.

05:49And you've called for unprecedented collaboration between governments,

05:53businesses, and innovators to do this together.

05:56Can you share an example of a successful partnership or project

05:59that could serve as a blueprint for scaling grid infrastructure?

06:03You know, it's difficult to point out one example.

06:05I think we are working together on that.

06:07Just to give you one example from my past, probably where this can work.

06:11In my past, I was running a big utility in Germany,

06:14and they developed an LNG harbour.

06:16And I was told just the 40 kilometres high-pressure gas pipeline

06:19would take five to seven years to build and get permissions.

06:23Then the situation changed, as we all know.

06:26The same pipeline was built in nine months.

06:28So you see the potential, what we have, if we're doing the right things.

06:32And if the necessary investments, Andreas, in grids and renewables are delayed,

06:37what would the world look like in 2030?

06:42Big question.

06:43Good, big question.

06:43Narrow that down.

06:44I have no idea.

06:45I think we are able to mitigate all these things over time.

06:49We will adapt, we will find solutions.

06:51Now, we have to look at the in-store base as well,

06:53because what we have in-store, we can use better with IT.

06:56We can use our assets longer if we're doing predictive maintenance

07:00with combining IT and OT, what we are doing as Hitachi, quite successful.

07:05So I'm not saying delay the investments,

07:08but I'm not a pessimist that we're not solving the problems of the future.

07:13Brilliant.

07:13Andreas, thank you so much for speaking to us on The Big Question on Euronews.

07:16Thank you for having me.

07:18Well, thank you very much for joining us on this episode of The Big Question.

07:21Don't forget, you can catch more of our shows on our Euronews YouTube channel

07:25and also on the Euronews.com website.

07:28Just head over to Business.

07:43Coming up next time on The Big Question.

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