Waste to energy plant reopens

Hydro-Que9bec 2020 Profit Outlook faces COVID-19 headwinds as revenue drops, U.S. Northeast export demand weakens, and clean-energy infrastructure plans shift toward domestic investments, energy efficiency, EV charging stations, and grid upgrades to stabilize net income.

Key Points

A forecast of COVID-19 revenue declines, weaker U.S. exports, and a shift to energy efficiency and grid upgrades.

✅ Q1 profit fell 14%; net income $1.53B vs $1.77B

✅ Exports to U.S. Northeast weaker; revenue off ~$130M Mar-Jun

✅ Strategy: energy efficiency, EV charging, grid, dam upgrades

Hydro-Québec expects the coronavirus pandemic to chop “hundreds of millions of dollars” off 2020 profits, its new chief executive officer said.

COVID-19 has depressed revenue by about $130 million between March and June, Sophie Brochu said Monday, as residential electricity use rose even while overall consumption dropped. Shrinking electricity exports to the U.S. northeast are poised to compound the shortfall, she said.

“What we’re living through is not small. The impacts are real,” Brochu said on a conference call with reporters, noting that utilities such as Hydro One supported Ontario's COVID-19 response at the height of the pandemic. “I’m not talking about a billion. I’m talking about hundreds of millions. We have no idea how quickly the economy will restart. As we approach the fall we will have a better view.”

Hydro-Québec last month reported a 14-per-cent drop in first-quarter profit and warned full-year results would fall short of targets as the COVID-19 crisis weighs on power demand. Net income in the quarter was $1.53 billion compared with $1.77 billion a year ago, the company said.

Canada’s biggest electricity producer had earlier been targeting 2020 profit of between $2.8 billion and $3 billion, according to its current strategic plan and corporate structure currently in place.

The first quarter was the utility’s last under former CEO Eric Martel, who left to take over at jetmaker Bombardier Inc. Brochu, who previously ran Énergir, replaced him April 6.

To boost exports over time, Brochu said Hydro-Québec will look to strengthen ties with neighbours such as Ontario, where the Hydro One CEO is working to repair relations with government and investors, and the U.S. The CEO said she’s heartened by New York Governor Andrew Cuomo’s call last month for new power lines from Canada and upstate to promote clean energy.

“This is a clear, encouraging signal that must express itself through very concrete negotiations,” she said. “The United States is our backyard. This is true for Ontario, where key system staff lockdowns were even contemplated, and the Atlantic provinces as well. This is our ecosystem, and we intend to build on our footprint, on the relationships that we have.”

Though stricter environmental hurdles make it more complicated to get power lines built today than a decade ago, the CEO insists it’s still possible to sell electricity to neighbouring U.S. states.

“Is it more difficult today to build energy projects? The answer is yes,” she said. “Does this clog up the U.S. northeast market? Not at all. I believe this federation of ecosystems is very promising.”

In the meantime, Hydro-Québec is planning to speed up investments at home — for example, by building new charging stations that will be needed to serve a growing fleet of electric cars. The utility will also upgrade some of its Montreal-area facilities, as well as its massive dams on the Manicouagan River, Brochu said. The investments will result in additional capacity.

“Today we need to put water in the pump of Quebec, so we will concentrate our human and financial efforts here,” she said. “We are needed in Quebec.” 

Hydro-Québec is stepping up efforts to promote energy efficiency among its customer base, amid retroactive billing concerns, which Brochu said could postpone the need to build large dams.

“We have to move towards ‘no-regret moves.’ What’s a no-regret move? It’s energy efficiency,” Brochu said earlier Monday during a presentation to the Chamber of Commerce of Metropolitan Montreal, noting that Ontario debated peak rate relief for self-isolating customers. “This is healthy, it’s fundamental and it will contribute to Quebec’s economic rebound by lowering energy costs.”

Brochu also pledged to build a more diverse workforce after the company said last week that 8.2 per cent of staff belong to “visible and ethnic” minorities.

“This can be improved on,” she said. “What I’m expressing today is my determination, and that of the management team, to move the needle.”

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US power grid modernization addresses aging infrastructure, climate resilience, extreme weather, EV demand, and clean energy integration, using AI, transmission upgrades, and resilient substations to improve reliability, reduce outages, and enable rapid recovery.

Key Points

US power grid modernization strengthens infrastructure for resilience, reliability, and clean energy under rising demand.

✅ Hardening substations, lines, and transformers against extreme weather

✅ Integrating EV load, DERs, and renewables into transmission and distribution

✅ Using AI, sensors, and automation to cut outages and speed restoration

The power grid in the U.S. is aging and already struggling to meet current demand, with dangerous vulnerabilities documented across the system today. It faces a future with more people — people who drive more electric cars and heat homes with more electric furnaces.

Alice Hill says that's not even the biggest problem the country's electricity infrastructure faces.

"Everything that we've built, including the electric grid, assumed a stable climate," she says. "It looked to the extremes of the past — how high the seas got, how high the winds got, the heat."

Hill is an energy and environment expert at the Council on Foreign Relations. She served on the National Security Council staff during the Obama administration, where she led the effort to develop climate resilience. She says past weather extremes can no longer safely guide future electricity planning.

"It's a little like we're building the plane as we're flying because the climate is changing right now, and it's picking up speed as it changes," Hill says.

The newly passed infrastructure package dedicates billions of dollars to updating the energy grid with smarter electricity infrastructure programs that aim to modernize operations. Hill says utility companies and public planners around the country are already having to adapt. She points to the storm surge of Hurricane Sandy in 2012.

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"They thought the maximum would be 12 feet," she says. "That storm surge came in close to 14 feet. It overcame the barriers at the tip of Manhattan, and then the electric grid — a substation blew out. The city that never sleeps [was] plunged into darkness."

Hill noted that Con Edison, the utility company providing New York City with energy, responded with upgrades to its grid: It buried power lines, introduced artificial intelligence, upgraded software to detect failures. But upgrading the way humans assess risk, she says, is harder.

"What happens is that some people tend to think, well, that last storm that we just had, that'll be the worst, right?" Hill says. "No, there is a worse storm ahead. And then, probably, that will be exceeded."

In 2021, the U.S. saw electricity outages for millions of people as a result of historic winter storms in Texas, a heatwave in the Pacific Northwest and Hurricane Ida along the Gulf Coast. Climate change will only make extreme weather more likely and more intense, driving longer, more frequent outages for utilities and customers.

In the West, California's grid reliability remains under scrutiny as the state navigates an ambitious clean energy shift.

And that has forced utility companies and other entities to grapple with the question: How can we prepare for blackouts and broader system stress we've never experienced before?

A modern power station in Maryland is built for the future
In the town of Edgemere, Md., the Fitzell substation of Baltimore Gas and Electric delivers electricity to homes and businesses. The facility is only a year or so old, and Laura Wright, the director of transmission and substation engineering, says it's been built with the future in mind.

She says the four transformers on site are plenty for now. And to counter the anticipated demand of population growth and a future reliance on electric cars, she says the substation has been designed for an easy upgrade.

"They're not projecting to need that additional capacity for a while, but we designed this station to be able to take that transformer out and put in a larger one," Wright says.

Slopes were designed to insulate the substation from sea level rise. And should the substation experience something like a catastrophic flooding event or deadly tornado, there's a plan for that too.

"If we were to have a failure of a transformer," Wright says, "we can bring one of those mobile transformers into the substation, park it in the substation, connect it up in place of that transformer. And we can do that in two to three days."

The Fitzell substation is a new, modern complex. Older sites can be knocked down for weeks.

That raises the question: Can the amount of money dedicated to the power grid in the new infrastructure legislation actually make meaningful changes to the energy system across the country, where studies find more blackouts than other developed nations persist?

"The infrastructure bill, unfortunately, only scratches the surface," says Daniel Cohan, an associate professor in civil and environmental engineering at Rice University.

Though the White House says $65 billion of the infrastructure legislation is dedicated to power infrastructure, a World Resources Institute analysis noted that only $27 billion would go to the electric grid — a figure that Cohan also used.

"If you drill down into how much is there for the power grid, it's only about $27 billion or so, and mainly for research and demonstration projects and some ways to get started," he says.

Cohan, who is also author of the forthcoming book Confronting Climate Gridlock, says federal taxpayer dollars can be significant but that most of the needed investment will eventually come from the private sector — from utility companies and other businesses spending "many hundreds of billions of dollars per decade," even as grid modernization affordability remains a concern. He also says the infrastructure package "misses some opportunities" to initiate that private-sector action through mandates.

"It's better than nothing, but, you know, with such momentous challenges that we face, this isn't really up to the magnitude of that challenge," Cohan says.

Cohan argues that thinking big, and not incrementally, can pay off. He believes a complete transition from fossil fuels to clean energy by 2035 is realistic and attainable — a goal the Biden administration holds — and could lead to more than just environmental benefit.

"It also can lead to more affordable electricity, more reliable electricity, a power supply that bounces back more quickly when these extreme events come through," he says. "So we're not just doing it to be green or to protect our air and climate, but we can actually have a much better, more reliable energy supply in the future."

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California Managed Decline of Fossil Fuels aligns oil phaseout with carbon neutrality, leveraging ZEV adoption, solar and wind growth, severance taxes, drilling setbacks, fracking oversight, CARB rules, and CalGEM regulation to deliver a just transition.

Key Points

California's strategy to phase out oil and gas while meeting carbon-neutral goals through policy, regulation, and equity.

✅ Severance taxes fund clean energy and workforce transition.

✅ Setbacks restrict drilling near schools, homes, and hospitals.

✅ CARB and CalGEM tighten fracking oversight and ZEV targets.

California’s energy past is on a collision course with its future. Think of major oil-producing U.S. states, and Texas, Alaska or North Dakota probably come to mind. Although its position relative to other states has been falling for 20 years, California remains the seventh-largest oil-producing state, with 162 million barrels of crude coming up in 2018, translating to tax revenue and jobs.

At the same time, California leads the nation in solar rooftops and electric vehicles on the road by a wide margin and ranking fifth in installed wind capacity. Clean energy is the state’s future, and the state is increasingly exporting its energy policies across the West, influencing regional markets. By law, California must have 100 percent carbon-free electricity by 2045, and an executive order signed by former Governor Jerry Brown calls for economywide carbon-neutrality by the same year.

So how can the state reconcile its divergent energy path? How should clean-energy-minded lawmakers wind down California’s oil and gas sector in a way that aligns with the state’s long-term climate targets while providing a just transition for the industry’s workforce?

Any efforts to reduce fossil fuel supply must run parallel to aggressive demand-reduction measures such as California’s push to have 5 million zero-emission vehicles on the road by 2030, said Ethan Elkind, director of Berkeley Law's climate program, especially amid debates over keeping the lights on without fossil fuels in the near term. After all, if oil demand in California remains strong, crude from outside the state will simply fill the void.

“If we don’t stop using it, then that supply is going to get here, even if it’s not produced in-state,” Elkind said in an interview.

Lawmakers have a number of options for policies that would draw down and eventually phase out fossil fuel production in California, according to a new report from the Center for Law, Energy and the Environment at the UC Berkeley School of Law, co-authored by Elkind and Ted Lamm.

They could impose a higher price on California's oil production through a "severance" tax or carbon-based fee, with the revenue directed to measures that wean the state from fossil fuels. (California, alone among major oil-producing states, does not have an oil severance tax.)

Lawmakers could establish a minimum drilling setback from schools, playgrounds, homes and other sensitive sites. They could push the state's oil and gas regulator, the California Geologic Energy Management Division, to prioritize environmental and climate concerns.

A major factor holding lawmakers back is, of course, politics, including debates over blackouts and climate policy that shape public perception. Given the state’s clean-energy ambitions, it might surprise non-Californians that the oil and gas industry is one of the Golden State’s most powerful special interest groups.

Overcoming a "third-rail issue" in California politics
The Western States Petroleum Association, the sector’s trade group in California's capital of Sacramento, spent $8.8 million lobbying state policymakers in 2019, more than any other interest group. Over the last five years, the group, which cultivates both Democratic and Republican lawmakers, has spent $43.3 million on lobbying, nearly double the total of the second-largest lobbying spender.

Despite former Governor Brown’s reputation as a climate champion, critics say he was unwilling to forcefully take on the oil and gas industry. However, things may take a different turn under Brown's successor, Governor Gavin Newsom.

In May 2019, when Newsom released California's midyear budget revision (PDF), the governor's office noted the need for "careful study and planning to decrease demand and supply of fossil fuels, while managing the decline in a way that is economically responsible and sustainable.”

Related reliability concerns surfaced as blackouts revealed lapses in power supply across the state.

Writing for the advocacy organization Oil Change International, David Turnbull observed, “This may mark the first time that a sitting governor in California has recognized the need to embark upon a managed decline of fossil fuel supply in the state.”

“It is significant because typically this is one of those third-rail issues, kind of a hot potato that governors don’t even want to touch at all — including Jerry Brown, to a large extent, who really focused much more on the demand side of fuel consumption in the state,” said Berkeley Law’s Elkind.

California's revised budget included $1.5 million for a Transition to a Carbon-Neutral Economy report, which is being prepared by University of California researchers for the California Environmental Protection Agency. In an email, a CalEPA spokesperson said the report is due by the end of this year.

Winding down oil and gas production
Since the release of the revised budget last May, Newsom has taken initial steps to increase oversight of the oil and gas industry. In July 2019, he fired the state’s top oil and gas regulator for issuing too many permits to hydraulically fracture, or frack, wells.

Later in the year, he appointed new leadership to oversee oil and gas regulation in the state, and he signed a package of bills that placed constraints on fossil fuel production. The next month, Newsom halted the approval of new fracking operations until pending permits could be reviewed by a panel of scientists at Lawrence Livermore National Laboratory. The California Geologic Energy Management Division (CalGEM) did not resume issuing fracking permit approvals until April of this year.

Not all steps have been in the same direction. This month Newsom dropped a proposal to add dozens of analysts, engineers and geologists at CalGEM, citing COVID-related economic pressure. The move would have increased regulatory oversight on fossil fuel producers and was opposed by the state's oil industry.

Ultimately, more durable measures to wind down fossil fuel supply and demand will require new legislation, even as regulators weigh whether the state needs more power plants to maintain reliability.

A 2019 bill by Assemblymember Al Muratsuchi (D-Torrance), AB 345, would have codified the minimum 2,500-foot setback for new oil and gas wells. However, before the final vote in the Assembly, the bill’s buffer requirement was dropped and replaced with a requirement for CalGEM “to consider a setback distance of 2,500 feet.” The bill passed the Assembly in January over "no" votes from several moderate Democrats; it now awaits action in the Senate.

A bill previously introduced by Assemblymember Phil Ting (D-San Francisco), AB 1745, didn’t even make it that far. Ting’s bill would have required that all new passenger cars registered in the state after January 1, 2040, be zero-emission vehicles (ZEV). The bill died in committee without a vote in April 2018.

But the backing of the California Air Resources Board (CARB), one of the world's most powerful air-quality regulators, could change the political conversation. In March, CARB chair Mary Nichols said she now supports consideration of California establishing a 100 percent zero-emission vehicle sales target by 2030, as policymakers also consider a revamp of electricity rates to clean the grid.

“In the past, I’ve been skeptical about whether that would do more harm than good in terms of the backlash by dealers and others against something that sounded so un-California like,” Nichols said during an online event. “But as time has gone on, I’ve become more convinced that we need to send the longer-term signal about where we’re headed.”

Another complicating factor for California’s political leaders is the lack of a willing federal partner — at least in the short term — in winding down oil and gas production, amid warnings about a looming electricity shortage that could pressure the grid.

Under the Trump administration, the Bureau of Land Management, which oversees 15 million acres of federal land in California, has pushed to open more than 1 million acres of public and private land across eight counties in Central California to fracking. In January 2020, California filed a federal lawsuit to block the move.

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Hydrogen Fuel Cell Crane Port of Vancouver showcases zero-emission RTG technology by DP World, TCA Electric, and partners, using hydrogen-electric fuel cells, battery energy storage, and regenerative capture to decarbonize container handling operations.

Key Points

A retrofitted RTG crane powered by hydrogen fuel cells, batteries, and regeneration to cut diesel use and CO2 emissions.

✅ Dual fuel cell system charges high-voltage battery

✅ Regenerative capture reduces energy demand and cost

✅ Pilot targets zero-emission RTG fleets by 2040

In a groundbreaking move toward sustainable logistics, TCA Electric, a Chilliwack-based industrial electrical contractor, is at the forefront of a pioneering hydrogen fuel cell crane project at the Port of Vancouver. This initiative, led by DP World in collaboration with TCA Electric and other partners, marks a significant step in decarbonizing port operations and showcases the potential of hydrogen technology in heavy-duty industrial applications.

A Vision for Zero-Emission Ports

The Port of Vancouver, Canada's largest port, has long been a hub for international trade. However, its operations have also contributed to substantial greenhouse gas emissions, even as DP World advances an all-electric berth in the U.K., primarily from diesel-powered Rubber-Tired Gantry (RTG) cranes. These cranes are essential for container handling but are significant sources of CO₂ emissions. At DP World’s Vancouver terminal, 19 RTG cranes account for 50% of diesel consumption and generate over 4,200 tonnes of CO₂ annually. 

To address this, the Vancouver Fraser Port Authority and the Province of British Columbia have committed to transforming the port into a zero-emission facility by 2050, supported by provincial hydrogen investments that accelerate clean energy infrastructure across B.C. This ambitious goal has spurred several innovative projects, including the hydrogen fuel cell crane pilot. 

TCA Electric’s Role in the Hydrogen Revolution

TCA Electric's involvement in this project underscores its expertise in industrial electrification and commitment to sustainable energy solutions. The company has been instrumental in designing and implementing the electrical systems that power the hydrogen fuel cell crane. This includes integrating the Hydrogen-Electric Generator (HEG), battery energy storage system, and regenerative energy capture technologies. The crane operates using compressed gaseous hydrogen stored in 15 pressurized tanks, which feed a dual fuel cell system developed by TYCROP Manufacturing and H2 Portable. This system charges a high-voltage battery that powers the crane's electric drive, significantly reducing its carbon footprint. 

The collaboration between TCA Electric, TYCROP, H2 Portable, and HTEC represents a convergence of local expertise and innovation. These companies, all based in British Columbia, have leveraged their collective knowledge to develop a world-first solution in the industrial sector, while regional pioneers like Harbour Air's electric aircraft illustrate parallel progress in aviation. TCA Electric's leadership in this project highlights its role as a key enabler of the province's clean energy transition. 

Demonstrating Real-World Impact

The pilot project began in October 2023 with the retrofitting of a diesel-powered RTG crane. The first phase included integrating the hydrogen-electric system, followed by a one-year field trial to assess performance metrics such as hydrogen consumption, energy generation, and regenerative energy capture rates. Early results have been promising, with the crane operating efficiently and emitting only steam, compared to the 400 kilograms of CO₂ produced by a comparable diesel unit. 

If successful, this project could serve as a model for decarbonizing port operations worldwide, mirroring investments in electric trucks at California ports that target landside emissions. DP World plans to consider converting its fleet of RTG cranes in Vancouver and Prince Rupert to hydrogen power, aligning with its global commitment to achieve carbon neutrality by 2040.

Broader Implications for the Industry

The success of the hydrogen fuel cell crane pilot at the Port of Vancouver has broader implications for the shipping and logistics industry. It demonstrates the feasibility of transitioning from diesel to hydrogen-powered equipment in challenging environments, and aligns with advances in electric ships on the B.C. coast. The project's success could accelerate the adoption of hydrogen technology in other ports and industries, contributing to global efforts to reduce carbon emissions and combat climate change.

Moreover, the collaboration between public and private sectors in this initiative sets a precedent for future partnerships aimed at advancing clean energy solutions. The support from the Province of British Columbia, coupled with the expertise of companies like TCA Electric and utility initiatives such as BC Hydro's vehicle-to-grid pilot underscore the importance of coordinated efforts in achieving sustainability goals.

Looking Ahead

As the field trial progresses, stakeholders are closely monitoring the performance of the hydrogen fuel cell crane. The data collected will inform decisions on scaling the technology and integrating it into broader port operations. The success of this project could pave the way for similar initiatives in other regions, complementing the province's move to electric ferries with CIB support, promoting the widespread adoption of hydrogen as a clean energy source in industrial applications.

TCA Electric's leadership in this project exemplifies the critical role of skilled industrial electricians in driving the transition to sustainable energy solutions. Their expertise ensures the safe and efficient implementation of complex systems, making them indispensable partners in the journey toward a zero-emission future.

The hydrogen fuel cell crane pilot at the Port of Vancouver represents a significant milestone in the decarbonization of port operations. Through innovative partnerships and local expertise, this project is setting the stage for a cleaner, more sustainable future in global trade and logistics.

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Nalcor Energy Pandemic Loss underscores Muskrat Falls delays, hydroelectric risks, oil price shocks, and COVID-19 impacts, affecting ratepayers, provincial debt, timelines, and software commissioning for the Churchill River project and Atlantic Canada subsea transmission.

Key Points

A $171M Q1 2020 downturn linked to COVID-19, oil price collapse, and Muskrat Falls delays impacting schedules and costs.

✅ Q1 2020 profit swing: +$92M to -$171M amid oil price crash

✅ Muskrat Falls timeline slips; cost may reach $13.1B

✅ Software, workforce, COVID-19 constraints slow commissioning

Newfoundland and Labrador's Crown energy corporation reported a pandemic-related profit loss from the first quarter of 2020 on Tuesday, along with further complications to the beleaguered Muskrat Falls hydroelectric project.

Nalcor Energy recorded a profit loss of $171 million in the first quarter of 2020, down from a $92 million profit in the same period last year, due in part to falling oil prices during the COVID-19 pandemic.

The company released its financial statements for 2019 and the first quarter of 2020 on Tuesday, and officials discussed the numbers in a livestreamed presentation that detailed the impact of the global health crisis on the company's operations.

The loss in the first quarter was caused by lower profits from electricity sales and a drop in oil prices due to the pandemic and other global events, company officials said.

The novel coronavirus also added to the troubles plaguing the Muskrat Falls hydroelectric dam on Labrador's Churchill River, amid Quebec-N.L. energy tensions that long predate the pandemic.

Work at the remote site stopped in March over concerns about spreading the virus. Operations have been resuming slowly, with a reduced workforce tackling the remaining jobs.

Officials with Nalcor said it will likely be another year before the megaproject is complete.

CEO Stan Marshall estimates the months of delays could bring the total cost to $13.1 billion including financing, up from the previous estimate of $12.7 billion -- though the total impact of the coronavirus on the project's price tag has yet to be determined.

"If we're going to shut down again, all of that's wrong," Marshall said. "But otherwise, we can just carry on and we'll have a good idea of the productivity level. I'm hoping that by September we'll have a more definitive number here."

The 824 megawatt hydroelectric dam will eventually send power to Newfoundland, and later Nova Scotia, through subsea cables, even as Nova Scotia boosts wind and solar in its energy mix.

It has seen costs essentially double since it was approved in 2012, and faced significant delays even before pandemic-forced shutdowns in North America and around the world this spring.

Cost and schedule overruns were the subject of a sweeping inquiry that held hearings last year, while broader generation choices like biomass use have drawn scrutiny as well.

The commissioner's report faulted previous governments for failing to protect residents by proceeding with the project no matter what, and for placing trust in Nalcor executives who "frequently" concealed information about schedule, cost and related risks.

Some of the latest delays have come from challenges with the development of software required to run the transmission link between Labrador and Newfoundland, where winter reliability issues have been flagged in reports.

The software is still being worked out, Marshall said Tuesday, and the four units at the dam will come online gradually over the next year.

"It's not an all or nothing thing," Marshall said of the final work stages.
Nalcor's financial snapshot follows a bleak fiscal update from the province this month. The Liberal government reported a net debt of $14.2 billion and a deficit of more than $1.1 billion, even as a recent Churchill Falls deal promised new revenues for the province, citing challenges from pandemic-related closures and oil production shutdowns.

Finance Minister Tom Osborne said at the time that help from Ottawa will be necessary to get the province's finances back on track.

Muskrat Falls represents about one-third of the province's debt, and is set to produce more power than the province of about half a million people requires. Anticipated rate increases due to the ballooning costs and questions about Muskrat Falls benefits have posed a significant political challenge for the provincial government.

Ottawa has agreed to work with Newfoundland and Labrador on a rewrite of the project's financial structure, scrapping the format agreed upon in past federal-provincial loan agreements in order to ease the burden on ratepayers, while some argue independent planning would better safeguard ratepayers.

Marshall, a former Fortis CEO who was brought in to lead Nalcor in 2016, has called the project a "boondoggle" and committed to seeing it completed within four years. Though that plan has been disrupted by the pandemic, Marshall said the end is in sight.

"I'm looking forward to a year from now. And I hope to be gone," Marshall said.

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European Green Deal Electrification accelerates decarbonization via renewables, electric vehicles, heat pumps, and clean industry, backed by sustainable finance, EIB green lending, just transition funds, and energy taxation reform to phase out fossil fuels.

Key Points

An EU plan to replace fossil fuels with renewable electricity in transport, buildings, and industry, supported by green finance.

✅ Doubles electricity's share to cut CO2 and phase out fossil fuels.

✅ Drives EVs, heat pumps, and electrified industry via renewables.

✅ Funded by EIB lending, EU budget, and just transition support.

The European Union is preparing an ambitious plan to completely decarbonize by 2050. Increasing the share of electricity in Europe’s energy system – electricity that will increasingly come from renewable sources - will be at the center of this strategy, aligning with the broader global energy transition under way, the new head of the European Commission’s energy department said yesterday.

This will mean more electric cars, electric heating and electric industry. The idea is that fossil fuels should no longer be a primary energy source, heating homes, warming food or powering cars. In the medium term they should only be used to generate electricity, a shift mirrored by New Zealand's electricity shift efforts, which then powers these things, resulting in less CO2 emissions.

“First assessments show we need to double the share of electricity in energy consumption by 2050,” Ditte Juul-Jørgensen said at an event in Brussels this week, a goal echoed by recent calls to double investment in power systems from world leaders. “We’ve already seen an increase in the last decade, but we need to go further”.

Juul-Jørgensen, who started in her job as director-general of the commission’s energy department in August, has come to the role at a pivotal time for energy. The 2050 decarbonization proposal from the Commission, the EU’s executive branch, is expected to be approved next month by EU national leaders. A veto from Poland that has blocked adoption until now is likely to be overcome if Poland and other Eastern European countries are offered financial assistance from a “just transition fund”, according to EU sources.

Ursula von der Leyen, the incoming President of the Commission, has promised to unveil a “European Green Deal” in her first 100 days in office designed to get the EU to its 2050 goal. Juul-Jørgensen will be working with the incoming EU Energy Commissioner, Kadri Simson, on designing this complex strategy. The overall aim will be to phase out fossil fuels, and increase the use of electricity from green sources, amid trends like oil majors pivoting to electric across Europe today.

“This will be about how do we best make use of electricity to feed into other sectors,” Juul-Jørgensen said. “We need to think about transforming it into other sources, and how to best transport it.”

“But the biggest challenge from what I see today is that of investment and finance - the changes we have to make are very significant.”

Financing problems

The Commission is going to try to tackle the challenges of financing the energy transition with two tools: dedicated climate funding in the EU budget, and dedicated climate lending from the European Investment Bank.

“The EIB will play an increasing role in future. We hope to see agreement [with the EIB board] on that in the coming months so there’s a clear operator in the EIB to support the green transition. We’re looking at something around €400 billion a year.”

The Commission’s proposed dedicated climate spending in the next seven-year budget must still be approved by the 28 EU national governments. Juul-Jørgensen said there is unanimous agreement on the amount: 25% of the budget. But there is disagreement about how to determine what is green spending.

“A lot of work has been ongoing to ensure that when it comes to counting it reflects the reality of the investments,” she said. “We’re working on the taxonomy on sustainable finance - internally identifying sectors contributing to overall climate objectives.”

Electricity pact

Juul-Jørgensen was speaking at an event organized by the the Electrification Alliance, a pact between nine industry organizations to lobby for electricity to be put at the heart of the European green deal. They signed a declaration at the event calling for a variety of measures to be included in the green deal, reflecting debates over a fully renewable grid by 2030 in other jurisdictions, including a change to the EU’s energy taxation regime which incentivizes a switch from fossil fuel to electricity consumption.

“Electrification is the most important solution to turn the vision of a fossil-free Europe into reality,” said Laurence Tubiana, CEO of the European Climate Foundation, one of the signatories, and co-architect of the Paris Agreement.

“We are determined to deliver, but we must be mindful of the different starting points and secure sufficient financing to ensure a fair transition”, said Magnus Hall, President of electricity industry association Eurelectric, another signatory.

The energy taxation issue has been particularly tricky for the EU, since any change in taxation rules requires the unanimous consent of all 28 EU countries. But experts say that current taxation structures are subsidizing fossil fuels and punishing electricity, as recent UK net zero policy changes illustrate, and unless this is changed the European Green Deal can have little effect.

“Yes this issue will be addressed in the incoming commission once it takes up its function,” Juul-Jørgensen said in response to an audience question. “We all know the challenge - the unanimity requirement in the Council - and so I hope that member states will agree to the direction of work and the need to address energy taxation systems to make sure they’re consistent with the targets we’ve set ourselves.”

But some are concerned that the transformation envisioned by the green deal will have negative impacts on some of the most vulnerable members of society, including those who work in the fossil fuel sector.

This week the Centre on Regulation in Europe sent an open letter to Frans Timmermans, the Commission Vice President in charge of climate, warning that they need to be mindful of distributional effects. These worries have been heightened by the yellow vest protests in France, which were sparked by French President Emmanuel Macron’s attempt to increase fuel taxes for non-electric cars.

“The effectiveness of climate action and sustainability policies will be challenged by increasing social and political pressures,” wrote Máximo Miccinilli, the center’s director for energy. “If not properly addressed, those will enhance further populist movements that undermine trust in governance and in the public institutions.”

Miccinilli suggests that more research be done into identifying, quantifying and addressing distributional effects before new policies are put in place to phase out fossil fuels. He proposes launching a new European Observatory for Distributional Effects of the Energy Transition to deal with this.

EU national leaders are expected to vote on the 2050 decarbonization target, building on member-state plans such as Spain's 100% renewable electricity goal by mid-century, at a summit in Brussels on December 12, and Von der Leyen will likely unveil her European Green Deal in March.

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