As Vattenfall is already a leader in renewables and R&D, does the package have less impact on you than others?
Erik Filipsson (EF): We are of course impacted by the legislations under the CEP, but in general that is only encouraged as it fits well with the transition that we want to pursue. For example, the CEP’s proposals on renewable energy are in line with Vattenfall’s strategy to become fossil-free. As one of the biggest developers and operators of wind energy installations in Europe, we are firmly convinced that every renewable electricity support system in the EU should be transformed into a tender system in order to keep the costs of the transformation of energy supply to a minimum. We also believe that biomass can play an important role in climate change mitigation. A harmonized EU-level sustainability criteria will considerably increase the credibility of the bioenergy sector. The risk-based approach proposed by the European Commission is reasonable and reflects our intentions.
Is there a likely business impact on the utility operating model?
EF: Yes, definitely. The decarbonization of Europe requires a rapid development of new technologies and innovation, as well as new business logics. Our customers are becoming more pro-active, and many of them have the ability to produce their own electricity and feed it to the grid. Developing a more customer-centric approach and finding new ways to develop the customer base will be defining factors for competing utilities. We have to work more closely with independent power producers, with communities as well as with NGOs, governments, local and global suppliers, etc. Management of data and big data and internet security will also pay a crucial role for future utilities.
How could it lead to transformation opportunities for the utility?
EF: Vattenfall has already started the journey by becoming much more active in more solar, decentral energy production, battery storage, E-mobility, electrification of industry, etc. We believe that these routes have to be pursued even further ahead, and the CEP will hopefully contribute to shaping a coherent and supportive regulatory environment in favour of scaling up these activities.
Will it accelerate the adoption of new energy efficiency technologies?
EF: We welcome the strong focus on consumers in the CEP. Larger volumes of intermittent renewables in the European electricity system will require higher degrees of flexibility in the electricity system in order to stabilize the grid. The best way to incentivise demand-response and to stimulate flexibility is to allow for free formation of electricity prices and free competition. Active consumers and demand-side response are also important elements to strengthen the legitimacy of market solutions and to increase the share of intermittent renewables.