Should we still be subsidizing fossil fuels? What are the major challenges of energy companies in decarbonizing and how can they pivot their strategy?
Faran Rana, Associate Programme Officer at IRENA, talked about one major challenge: income disparity. He said that our current reliance on fossil fuels doesn’t just affect energy, but our food systems, industrial sectors, healthcare, etc. He said, “So, removing fossil fuel subsidies in a country will have an impact on these aspects and, in many cases, an inflationary impact that could be felt disproportionately by the lowest income populations.” Combatting this, he said, won’t take a one-size fits all solution. Instead, solutions will need to be tailored to each country’s specific needs.
Tim van Amstel, CEO of E.ON One, said: “This is really a complex puzzle because it means you are trying to connect worlds that have never been connected.” To achieve this, he believes that not only is digitization important, but also flexibility. “The future lies in flexibility,” he said. “Without it, digitization is impossible.”
In relation to this, Jochen Schwill, Founder of Spot My Energy, added: “Sometimes we are also talking about market excess.” He said that if we don't have a level playing field of flexibilities and we don't put trust into an energy-only market design, this could lead to a hidden subsidy for power plants that are then pushed into the market.
Michele Vadora, Head of Business Development at Plenitude, talked about how one solution may be through linking: “We have renewables production, we have end consumers and we have e-mobility. When linking these three worlds, one of the key conclusions is how these three words become one.” He said that you can build this link intelligently through digital to ensure that customers have a great experience and that they are able to maximize the use of their renewable energy.
