State of the European Energy System | Solar for Freedom, Security and Unity

In this episode of Shine On Policycast, host Bethany Meban sits down with Walburga Hemetsberger, CEO of SolarPower Europe, for a deep dive into the future of Europe’s energy system. As the new political season begins, we analyse European Commission President Ursula von der Leyen’s State of the Union address and its implications for the Europe’s energy future.

We explore the trajectory of solar in Europe, the role of energy storage in securing grid stability, and the policy measures needed to accelerate solar PV growth across the EU. Whether you’re an energy professional, policymaker, or solar industry expert, this conversation provides insights on what’s next for Europe’s clean energy transition—and how the EU can ensure solar continues to soar.

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Transcript

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It is difficult times for the solar market. That comes at a moment where we actually, as you mentioned, need to accelerate. The figures that we have been crunching is that we need to have 70 GW that we're adding to the system each year, and we will be adding 64 GW, according to our latest figures this year. It is nowhere near to what we need to install in order to reach the REPowerEU target that the Commission has set of 750 GW. So it is clear that we need to take action. This is Shine On Policycast, SolarPower Europe's podcast dedicated to EU policy about solar, with updates in 20 minutes or less. So welcome back to season 6 of Shine On Policycast. And to to mark the first episode of the new season, we have a familiar face to many. Our CEO at Solar Power Europe, Walburga Hemetsberger. So welcome, Walburga. Pleasure being here. Again. Again, yes. You've been a guest a few times. And I think the last time was maybe last December. Much has changed in the meantime. And we're now in September, the kick-off of the new political period, the new political school year. And that's really marked off officially in Strasbourg, where last week we had President von der Leyen give the State of the European Union speech and you were there. So can you tell us a bit what the atmosphere was like, some key takeaways from the President's speech? Indeed. I was there because it was a nice moment when the political season starts again, being in Strasbourg and feeling the vibe. It was great to see some members of Parliament back and exchange with them on the upcoming files. Then on Tuesday of that week, Ursula von der Leyen gave her speech in the plenary. I was there in the plenary. It was good to see Ursula von der Leyen at a very critical moment because you might remember just the night before, the day before we had drones were coming down in Poland. The weekend before, we had the biggest attack, I think, ever on Ukraine with some 800 drones. It was really a decisive moment, I think, where it was on the line to give her State of the Union speech. It was also a very forceful speech. I think it's fair to say that the atmosphere was a bit tense. Half of the plenary was also in red, marking their protest on Gaza. A lot of things are coming together in this global turmoil we're in. Her words there, apart from all the buzzwords that she used throughout her speech, like freedom, unity, security, was that Europe is in a fight for our future. That was quite impressive, and that this must be Europe's independence moment. These were the two sentences which, I think, impressed me most. More specifically on energy, it was good to hear Ursula von der Leyen confirming that in this stride for independence, energy plays a major as well. Renewables as homegrown, electricity play a major role. She also added nuclear. I think there was the new bit as a complementary energy she mentioned. But then also her commitment to fix the grid bottlenecks that we have, so to make sure that electricity can flow freely throughout Europe. And her actions that she wants to take on grids, but also on storage and batteries, which was good to hear. You mentioned some of these buzzwords and keywords, freedom, security, independence, and this shift to the last few years of moving towards a more geopolitical concept of Europe, not just economic. Then what's Solar's role in that, in providing this sense of security, unity, freedom, independence? Where do we fit in? We fit into all of that. Solar plus storage and flexibility has solutions that should be rolled out very, very quickly because indeed, it's strengthening freedom, security, unity. Freedom, if you look at the facts, Europe is still importing more than €400 billion worth in energy. That's mainly fossil energy. That was last year. This is down from €500 billion in 2022. No, it's really going up and down. I mean, it's going down. That's good news, but it's still a lot of money. Apart from the price that we are paying in Europe for importing, we're also very much dependent on countries still, even if we have reduced our inputs still from Russia and from other countries which are not our best friends. Let's put it that way. We have a cost issue, we have a price issue, and we have the issue that we're completely dependent. That's the freedom aspect. But then I think it's also worthwhile reflecting a little bit on unity, where solar can play a major role. We're living in times where there's more and more polarisation, not just in the US, where it's very extreme, but also in Europe, where we see this polarisation. I do think that it is extremely important to take people along in this big changes that we see, whether that's technology, whether that is energy transition and the global changes that we see. Also there, obviously, solar can play a role because it is the people's energy, as we like to call it. It's a good buzzword. It's a very long time. People's energy, yeah. People can really have their energy in their own hands and get very affordable electricity. If you look at beautiful social housing projects where they're using solar because it's a no-brainer. But also if you look at our latest figures on commercial and industrial solar where companies use more and more solar in order to get their electricity bills down and become more competitive. I do think the society at large can use solar, and it should not be one of those dividing elements. On the contrary, it should really bring people together and give people power in their hands. Then security, it's a no-brainer. You just have to look at Ukraine where it's just a bit more difficult to attack decentralised energy systems than the big sites that have been attacked already by Russia. Also, their decentralised energy is bringing security benefits. The only caveat is that we need to, obviously, for other digital technologies, also look into cybersecurity and controllability and should not take it lightly. Here's the first call to action already here in our podcast to policymakers, to do something about strengthening this digital part of our industry, which is the same in other industries. Yeah, and if listeners are interested, we've got a great position paper on our website that we did with the DNV that goes into mapping cyber security challenges and how to mitigate them. But you mentioned the latest figures on commercial and industrial, so businesses installing solar. And we just came out with our first ever mid-year report on solar. We normally just do annually in December, but the pace of the sector is moving so quickly now that we had to do a mid-year report in July, and that's on our website for readers to check out. But it's true that the numbers this year are different to what we usually see. It's the first time that we're now projecting negative growth for the first time in 10 years since 2015. And we're now in this new phase of solar growth where it's stalling a little bit. We're still adding to the grid, but it's less than we had before. So you've mentioned all these reasons why solar is great for Europe: security, unity, energy costs. And we see that solar is now entering a new challenging phase. What can policymakers do here to help us get over this hub, get back to scaling at the pace that we need to reach 2030 goals? Now, indeed, we already, you remember, raised the yellow flag a couple of months ago when we showed our latest European market outlook, where we said 'Guys, we're not growing as fast anymore as we used to'. We had a 4% growth at the time. And indeed, what we've been flagging to policymakers is now becoming a reality. We're at 1.4% less growth that we are forecasting for this year. It hasn't materialised yet, but this is our forecast for this year. It is difficult times in the solar market. That comes at a moment where we actually, as you mentioned, need to accelerate. The figures that we have been crunching is that we need to have 70 GW that we're adding to the system each year, and we will be adding 64 GW, according to our latest figures this year. It is nowhere near to what we need to install in order to reach the REPowerEU target that the Commission has set, 750 GW. It is clear that we need to take action. The reasons for it are pretty clear. There's a lot of solar, obviously, at certain moments during the day, that's at noon, around noon. This famous duck curve is getting more and more expressive. That means for the ones who do not know what the duck curve is, that you have more and more solar, obviously, during these hours, which is not only impacting the grids because they have to cope with it. But what it means for solar developers is that they earn much less during these hours. We see a lot of negative prices happening all over Europe, and those hours of negative prices are increasing every year. So it is not a great business environment we're in, but it is also, apart from the solar business, it is not good news for Europe's electricity system because we've been sleeping for too long. We have not been investing in our infrastructure. We have not been investing in storage and in flexibility enough. And this is what we need to do now, urgently. So we need to provide good framework conditions for solar to further grow. We need to make sure that we add a lot of flexibility to the system. It's not so long time ago that we published our Mission Solar 2040 study, where we have also been putting numbers to it and the benefits as well, which is the energy system will cost us less in the end if we're now investing in modernising the grids, better planning of grids, if we're investing in batteries 10 times as much as we have today. That's what we need by 2030. We have launched our Battery Storage Europe Platform in order to push even harder on that. There's a lot of things that need to happen now quickly that we can continue growing and reaching our goals with all the benefits it's freedom, security, unity that it brings for Europe. And you mentioned the Battery Storage Europe Platform, and that's part of our organisational strategic shift to make sure we're bringing storage along with solar. And now we have a new tagline, Solar, Storage, Flexibility. And we have this new platform, the Battery Storage Europe Platform. So what's work like on that platform? It's quite new, but it comes with the basis of, we've done years of reports on the battery storage market in Europe, so we've got a good basis there. But what are the next steps for the platform and what are we working on at the minute? So the Battery Storage Europe Platform was launched in June this year, and we felt that we've been working on batteries and on storage for a long time. It was always part of our asks. But it is such a crucial moment now that we need to scale up on batteries, that we felt the need and the urge of having a separate voice to push for more battery within what we're doing at SolarPower Europe, and hence we launched this Battery Storage Platform. The idea is really to raise awareness through events. We had a very successful event in to lie together with PVmagazine and together with Intersolar. So that was great to gather the ecosystem, but to also mainly raise awareness to policymakers that they need to act. We have a list of 12 actions. They can do very easily, to unleash battery storage through better regulation, through better grid planning, permitting plays a role, unleashing the revenues batteries can make. Revenue stacking is one of the things that need to happen. That can be all done relatively quickly, but it needs to be done because the business case as such is there. Batteries have been reduced in terms of costs, in terms of costs in terms of, costs considerably over the last years. They're as cheap as they've never been before. And solar plus batteries, by the way, is also cheaper than gas beakers. That needs to be clarified, and the drum beat needs to be up on this point. That's what we're doing with the Battery Storage Europe Platform, asking for action. What we're doing is calling for a flexibility action plan and a battery action plan. And this is what we hope will happen in the next couple of months. And so then on top of the upcoming activities of the Battery Storage Europe Platform and our own activities, what are some key moments in the first half of this new legislative cycle? What do we have to look forward to? So taking a helicopter view, I think it is important that the European Commission is going to be lammed to the next COP with a pledge that is putting Europe on track for more security, more freedom, and that is 90% greenhouse gas emission reduction. That is something that the European Commission has been putting forward a while ago. But really nailing it down is a bit difficult. There's a lot of discussions going on, and we do hope that this will be the path that Europe will be following. That is the first bigger picture thing that we need to look forward to and hope we will be able to look forward to. Then we are also discussing the budget for the next seven years, and it will be decisive where the money is going. They do hope that the money is going where the mouth is. A Clean Industrial Deal is what the European Commission is working on, and that means a lot of renewables, and that means really putting a lot of the money into securing also energy as part of the security strategy of the European Union. So that will be important. And then the third thing, taking this helicopter view, is really Europe needs to take a step on electrification. Here, as we all know, the big debate is around transport and whether we should be a little bit more flexible on the phase out of combustion engines. I think this would be detrimental to the further electrification pathway. These are the big picture things we will be for sure following, monitoring, and trying to also influence as much as we can. Then in terms of packages coming up, the grid package is obviously very important for us, where we want to see indeed flexibility and battery storage big times in that package already. An Electrification action plan. Then the security package that the European Commission is working on. They want to redefine energy security for Europe, which today is still very much based on gas. LNG! Yeah, LNG and gas storage. That needs to be completely redefined. We do hope that this also entails in decisions on cyber security and on controllability. For the brains of all these different technologies, in our case, the brains are called inverters. We need to see some very good rules on on security there. Great! And I think that we have the consultation for the energy security strategy has just opened, and there's a few weeks now that we'll make sure to feedback on it, but probably worth another edition of policycast on that topic alone. But thanks so much, Walburga, for your time today and sharing all your insights. And yeah, thank you. Thank you. Thanks for listening to this episode of Shine On Policycast. Make sure to subscribe and turn on notifications to get updates about new episodes. Shine on.