 Good afternoon and welcome to this meeting of the Institute for International and European Affairs. I might draw your attention to the escape route. I'm also passed to, oh yes, that's a very important thing, less embarrassment is caused. To silence your phone please. You are encouraged, those of you indulge in such practices. You're encouraged to tweet during the event. The handle is at IIEA. The presentation will be on the record and the discussion afterwards, if there is such, will be under Europe House or Chatham House rules, but they are I think very closely related, if not identical. Today's meeting is one in a series which has been sponsored by the ESB and we are very pleased to welcome Christian Ruby to talk to us. An expert with an interesting background, master's degree in history and international development, experienced as a journalist, I think for seven years working as a public servant in Danish government and ministries of the environment and of climate and energy, and also experienced in the cabinet of Connie Hedegard in Brussels and the European Commission. But now he is with Euroelectric after a period with I think wind Europe. In Euroelectric he served as a chief policy officer and was in charge of the development and implementation of the political strategy. If I might ask Paddy Hayes, managing director of ESB networks, to introduce the context of this meeting, please Paddy. Thank you very much Owen and good afternoon ladies and gentlemen. So as Owen said ESB has long been associated with the IIEA in terms of a series of energy lectures going back almost 10 years. In fact we have a longer association even to that with Euroelectric. But we are delighted to be associated with this partnership. The theme for this year is the electric lifestyle. We think it's particularly relevant to the work that we and ESB are trying to do and in fact the work that I know a number of people in the room are trying to do in terms of leading the transition to a low carbon future and a secure and affordable low carbon future. We always appreciate the quality of the speakers that the IIEA invite and the quality of thinking and the perspective that this brings the energy debates. And Christian Ruby is a case in point. Christian has shown himself over the last two years I'm sure before but the last two years in Euroelectric, he's shown himself to be a real leader and thinker. He's succeeded in aligning the European electricity industry around a shared vision for a carbon-neutral energy mix. And when you think about the diverse interests and national interests and economic constraints around Europe, that's no mean feat at all. At ESB we share the belief, we share the belief that this is about generating, connecting more renewable and low carbon sources of electricity. And we have the belief that it's about using that clean electricity then particularly to drive heating and to drive transport. So the electric heating and electric transport become the norm rather than the exception. So I'm delighted that Christian's here with us to share some of his thoughts, his perspectives and his expertise while discussing the role of electricity in the decarbonisation of Europe. So thank you, thank you very much, Chris. Thank you. Good afternoon and thank you for the invitation. Very happy to be here. I really like the title of these lectures, Electric Lifestyle. It sounds very nice and it really cuts to the point of what a low carbon lifestyle is going to be about. It's going to be an electric lifestyle. I'll show you a little bit of, let's say, the evidence behind this. Maybe just a few words on what was already mentioned with regard to the process in your electric. I came from the wind industry and in 2017 I took over at your electric and what we did was basically to have a look and say, let's try to get the leaders together and find out what's the direction we want to take and what's our value proposition for society. And that resulted in a very crisp, I find, document of two pages where we set out our contribution, which is essentially to accelerate the energy transition and to provide clean electricity as a transformation tool for other sectors that want to decarbonize. That's the, let's say, the commitment of the entire industry in Europe, even the ones that have a very different starting point than the one we have here in Ireland and the one we have in my home country, which is Denmark. So that's a little bit the context for this. What we did was basically to set out and try to do some analysis on the basis of this vision and say, can this be done? How can this be done? And what needs to happen in the different sectors as a consequence. This beautiful poetic title won't spend much time on this, but essentially what this study is about is to try to fix this problem. And this is, in essence, the problem of European carbon emissions up in the white space on the right. You have this stuff we don't look at. That's the burping cows. It's the process emissions from industries that don't have a lot to do with the way we produce energy and consume energy in society. The rest, the three quarters, the blue stuff on the left-hand side, that's where we produce energy. That's where we use energy across society. That's our sector. It's the energy sector. It's the transport sector. It's the building sector. And it's the industry sectors that basically account for around three quarters of the emissions that we have and that constitute the climate challenge where we have ahead of us. We're doing this in the context of some very ambitious policies that are going on at EU level. Currently, the European Commission is discussing the so-called long-term climate energy strategy that aims at, well, at least from what we hear, to create a net zero carbon society by 2050. And net zero carbon means that there are no net emissions. And that's very ambitious. I'm going to show just how ambitious that is. We share that vision. We also say politely that is very ambitious and we need to be aligned about the fact that if we want to go there, that requires some significant shifts for consumers, for companies, and for the society in general. What we did in this analysis is basically to draw up three different scenarios of how we could deliver on the Paris Agreement. Today, we've decarbonized or we've reduced emissions by 22% compared to 1990 levels already in Europe. The first scenario is what European politicians have already promised to do as part of the Paris Agreement. The second scenario is a scenario where we say, let's assume that they want to do more and ramp up ambitious as part of a global consensus to do so. The third scenario is going all the way to a net zero carbon society. We modeled this as 95% because essentially, if you reduce emissions in the energy-using sectors by 95%, you could compensate for the rest by reforestation measures or flexibility measures. As I'll show you in a second, with that last scenario, we're in very, very new territory. If we just start by moving over to that right-hand side, we're already doing quite a bit. Electric lifestyle, it's a good term to focus on what needs to happen if we move there because consumer behavior is going to be a very essential part of this. We just had a lunch discussion about the way we transport ourselves in society. How do we get from A to B? For sure that's going to change. That's going to change in the next decade as a consequence of legislation that's already being proposed, but it needs to change much more radically if we want to move to a net zero carbon society. The ambition level in the different scenarios is underpinned by different types of regulation. Do we go for one measure to basically reduce carbon emissions across society? Or do we go for a number of different interrelated measures? And of course, technology development is also a key part in this. What we've tried to do here in this study is say, let's not count the moon shots. Let's not assume that something crazy happens and that all of a sudden we can do something that we've never dreamed of. We try to look at the current technologies and say, let's speed them up. Let's see what happens if we want to go to those very ambitious levels of decarbonization, what needs to happen in terms of technology deployment, technology maturation in renewables, in electric cars, in heating, in industry and so forth. So how did we analyze this? It said that economists and artists have one thing in common. They tend to fall in love with their models. I was always more of the artist kind. And this kind of model for me is a little bit square. It is quite a good model. But what we wanted to make sure was that we didn't, let's say, fall in love with our own model. So we've done a lot of consultation with other industries, with civil society, in order to get this not as a, let's say, the final answer, but rather as an iterative discussion on how this needs to be done. Essentially, the model is composed of three dimensions. On top, you have eight regions that we've studied. For one reason or the other, they make sense to look at together. You have the Iberian peninsula. It's interconnected, but it's isolated from the rest of Europe. You have Poland, which is a special case altogether. You have the Nordics, and so on and so forth. On the vertical dimension, we have the sectors, as I described before, and at the bottom we have the different energy sources that power our society. And how do these three dimensions play together? That's what we've looked at in the scenarios. The ambition is daunting. Let's not beat around the bush. Let's be very clear about that. Since 1990, we've been reducing CO2 emissions by 1% per annum. If we want to move to 2050 and 80% reductions by 2050, we need to speed up and go for 4% per annum. Moving to 90% requires 6% per annum, and moving to 95% is 8% per annum. It seems counterintuitive. The first time you see those numbers, that doesn't make sense arithmetically. It makes sense. It's basically the case. So we shouldn't kid ourselves, this is ambitious no matter how you turn and toss it. It's daunting, but it's also doable. And I think that's the good and positive message that we want to insist to have as an industry. It is really doable. It's doable with a combination of energy efficiency measures and electrification measures. On the left hand side, you see how we need to reduce total energy consumption across society. From 0.6 to 1.3 per annum, you're near growth. On the other hand side, you see basically how we need to drive direct electrification of the other sectors at ranges ranging from 1% to 1.5% per annum. That means we're talking about significant electrification, significant buildout of the power sector if this needs to happen. But it's doable. It requires us to work together and it requires us to have a very, very clear mandate to build out the power sector and to connect the rest of the economy around the power sector. This is a deep dive on the net zero emissions scenario. The blue line is the emission reductions. The white stuff on top, that's direct total energy savings. We need to use less energy across society if this needs to happen. The dark stuff is the emitting fuels. That's on a steady decline. There's going to be just a little bit left. We still want to fly somewhere in 2050 and we might not have all electric planes for the long haul. We still want to carry goods places where we cannot perhaps get electric transport for it when we talk about maritime transport. At the bottom you see the buildout and the increased consumption of electricity moving to 60% of the total final energy consumption up from around 20% today. So a very significant shift. That doesn't mean necessarily that it triples. It just means that it takes a larger share. And in the middle you have the rest. The green stuff on top is other carbon fee sources, direct solar, geothermal, and so on and so forth. The light green stuff is what we call power to X or indirect electrification. So the creation of liquid fuels or gases based on power. So you take clean electricity and you create gas out of it through a process of electrolysis for example. That way you have a clean fuel in a gases form. That's also part of the solution. Otherwise we're going to have trouble basically powering a number of the sectors that are difficult to decarbonize today. In this debate on climate action and decarbonization we've all we've often heard that energy efficiency is a bad idea at least from the industry. That's not what we're saying here. That's the opposite of what we're saying here. What we think is that essentially it doesn't work without you need massive energy savings to make this happen. The good news is that electrification is by implication also an efficiency strategy. When you move from an ICE car to an electric car there's an immediate energy saving inherent in that just because the motor is much better. When you go from gas heating of a house to a heat pump you immediately save a lot of energy because it's a much more efficient technology. When you use industrial heat pumps it's the same story so you have very very significant energy savings coming just from the fact that we electrify it. Across the scenarios we find that the savings gained from electrification constitute around a third regardless of whether we look at 80 percent 90 or 95 percent. That's a very good piece of news. So let's look at this lifestyle. Let's look at just how significant this is if we want to move there. Transport sector is is a challenge because there's not much we can do it about planes at least not for the next 10 to 15 years. We have some very interesting plans coming out of Norway for example to electrify short-haul planes all short-haul destinations they want to electrify that maybe doable and probably is the right way to go. The long haul we don't see a solution for that based on electricity today so there are other decarbonization options in play for that and probably there's still going to be emissions from airplanes also for some time in the future. Trucks same story we can do some of the trucks we can go electric with some of the trucks the long haul looks very difficult today that will require other energy carriers. The buses we can go quite far essentially the message arising from this is that where we really need to drive the change literally speaking is with passenger cars and vans. To reach the high levels we need to have a hundred percent of new sales coming from electric cars in by 2050 in the in the highest scenarios and the share of the fleet also needs to be very close to a hundred percent 96 so a full shift to electric cars as a necessity to move towards the full decarbonization. What we don't see in these numbers because their percentages is that the absolute amount of cars is significantly reduced between the first the second scenario is there between this scenario and this scenario this scenario has half the amount of cars as this one that's the only way you can get to those extreme levels of decarbonization that means we need to move towards much more shared modes of transport it means we need to move to much more interconnected modes of transport in order for this to happen. So you can see it is really a daunting ambition it's doable if everybody wants to do it but it's it really comes with a lot of implications for our lifestyle. What we often hear is that well they're more expensive these these cars well you're probably today but in five years time in three years time just around the beginning of the 2020s it's going to be more expensive to have a combustion engine car seen over the lifetime of the car compared to an electric car so the total cost of ownership as we call it shifts from from let's say being in favor of ice cars today to electric cars and just to three in a two to three years time depends on who you ask if you ask Renault Nissan it's 2021 if it's McKinsey it's more 2025 but it's going to happen within a few years time so why won't people just switch immediately as soon as that car is cheaper well people are not that rational there's a lot of things that come into that equation the range anxiety the ability to charge the phase out of the other cars and the scrapping premier the incentives to do this stuff all these things play into the equation of how fast this is going to happen so again consumers need to be involved they need to be engaged and make those choices regulators need to send the right signals and we need basically to agree that this is what what we want to do and have a very very strong commitment to make this happen at the speed we need electrification of residential heating is another point and there's a lot happening already I mean it's I don't know about you guys but cooking with gas that's that's long gone for me I used to like it but I don't miss it today so that's electrified in many houses today many places they don't roll out the gas infrastructure anymore for for for the residential piece and now the next step is essentially to get the heating transitioned to to electricity and also to get the water heating transitioned I went and saw a place in France where they built a new house and the new houses are so insulated that you only essentially need to heat the water and heat your food the rest basically the house the house takes care of there's a very very limited need for heating if you insulate the house right that's where the energy savings and the energy efficiency comes in that's another dimension of this we need very well insulated houses in order to transition to electrical heating when you have that you can also basically heat your house with electricity a quick glance on the industrial sectors this is a very big challenge because it ranges from chemicals to iron to other industries these are essentially completely different challenges and some of them can be electrified some of them will need to rely on other types of decarbonization strategies using biofuels using hydrogen using CCS otherwise this is not going to work and therefore we say this is really let's say a palette of different options that is needed to decarbonize the industry what we do see however is that electricity continues to surprise with its ability to provide solutions right now our vice president from Wattenfell is investing in a big carbon-free steel plant based on hydrogen they take carbon-free electricity either from nuclear or from hydropower they transform it into hydrogen through an electrolysis process and they have created a completely new steel let's say production steel production process based on this which allows them to produce carbon-free steel same thing is happening in Austria and we're beginning to see that many industries take a real interest in trying to reinvent their industrial processes same goes for chemicals petrochemicals when we presented these numbers to them they said you're not ambitious enough on our behalf we can do more and we can we just need a lot of electricity from you guys so there's a fundamental shift in the mindset happening in parts of the industrial sectors and I think over the next 10 years we're going to see some very interesting examples of these industrial processes being revamped being rethought in new ways so overall the picture is as I said the low carbon lifestyle or the no carbon lifestyle is an electrical lifestyle there's an unbreakable link between decarbonization and electrification the deeper you want to go the more electricity you need and the more you need to depend on electricity 80% brings us in the range of 40% of total final energy consumption coming from electricity 90% brings us up to around 50 and 95% brings us to 60% of all societal energy coming from electricity there's no way really around this and this is uncontroversial by the way we benchmarked this across a number of different studies and nobody's really disputing these figures with us people that know the fundamental physics of this the fundamentals of this decarbonization process they agree this can't be done in many other ways maybe you can invest like crazy in one other technology in hydrogen for example and then you can skew these numbers but the basic physics of this is that direct electrification is a better way of using the energy once you go through the conversion losses of bringing electricity into the form of gas you're losing energy on the way and we need all the energy we have in order to get there that's also the inherent message here so the short message is that in your electric we're electric about this and that is because the future is electric thank you