ELECTRIFY THE ECONOMY
Iberdrola is committed with the electrification as the no regret option for a sustainable economy
The electricity sector is the best available energy vector to incorporate renewable facilities. Iberdrola promotes the decarbonisation of the economy through greater electrification, especially in sectors such as transport (through electric vehicles) and buildings (through heat pumps).
In order for electrification to be possible, we must create a level playing field for energy sources:
1. ALL ENERGY SOURCES (GAS, GASOLINE AND ELECTRICITY) must pay the cost of their emissions to the atmosphere, internalising the environmental cost. A uniform environmental taxation based on the "polluter pays" principle should be established.
Why renewable energies require complementary support relatives to the price of electricity?
Climate change is an indisputable fact and the solution is to decarbonize the economy. Renewable energy is one of the most efficient solutions for the climate change, with Iberdrola being a pioneer in renewable energy since 2000.
Many countries have set renewable energy targets based on a percentage of final energy consumption (i.e., consumption of gasolines, gas and electricity). Gasolines (mainly used for transport) and gas cannot be replaced at scale by renewable sources of energy; but electricity can be generated from renewables on a large scale, through wind, photovoltaic and hydroelectric plants. So electricity accounts for the majority of renewable energy so far and will continue to do so in the future. But renewable power plants concentrate most of their costs on construction, with a very low variable operating cost due to the use of natural resources: wind, sun or water. The greater the penetration of renewable generation, the lower the price of electricity in the wholesale market, making it difficult to recover the initial investment. This means that renewable generation requires complementary support relatives to the price of electricity in the market. So far, countries have recovered the cost of this support exclusively through levies applied to electricity bills, despite the fact that most support for renewables is intended to meet decarbonization targets which reflect consumption of gasoline.
This financing model increases electricity tariffs considerably: it makes clean energy more expensive, leaving it at a competitive disadvantage compared to more polluting energy sources. It means that electricity customers bear the cost of meeting targets that are driven by the energy consumption of conventional car users; it makes decarbonization more difficult. Therefore, all energy products should include in their final price the cost of their emissions and their proportional share of renewable support costs, according to "polluter pays" principle, so that customers are aware of the environmental cost of the energy they use.
Iberdrola, with more than 50% of its generation from renewables, is firmly committed to renewables, reward schemes that guarantee its development and a financing model that is equitable between all energies favoring the decarbonization of the economy.
2. THE BARRIERS TO ELECTRIFICATION MUST BE REMOVED, streamlining electricity tariffs to remove non-supply costs (i.e. social, industrial or environmental support policies), and promoting electric end uses:
- In transport, establishing ambitious objectives for electric vehicles in the total fleet of new vehicles and ensuring the deployment of a basic recharging network on public roads, providing confidence to owners and users.
- In buildings, establishing decarbonised solutions (such as heat pumps) in new and existing buildings.
Find out more about electric vehicle deployment
The EU has managed to reduce CO2 emissions by 17% in two decades, even though the transport sector has increased its emissions by 22% in the same period. Transport is now responsible for 26% of total European emissions. This is because the transport sector today continues to be based on petrol and diesel fuels and has been unable to make use of renewables in any significant way. It is worth nothing that 29% of the electricity consumed by Europeans is renewable, while in the transport sector renewables account for just 7% of the energy consumed. All this has made transportation the main cause of air pollution, with the serious effects that this entails for health, particularly in urban areas. Electricity can be the most environmentally sustainable energy source with the least emissions: the one that uses renewables most and the one that will use the most in the future. In addition, an electric vehicle's engine is much more efficient than the diesel or petrol engine. Electric vehicles are, therefore, the most effective way to transform transportation, resulting in the reduction in both CO2 emissions and air pollution. It is therefore necessary to implement a European-wide strategy that will facilitate large-scale developments of electric vehicles, promoting zero-emissions transport.
And now is a good time to take this forward. As the European Union is developing regulations both to implement a clean electricity system and to modernise the transport sector. This opportunity should be used to:
- Reduce the financial and regulatory barriers that hinder the development of electric vehicles.
- Seek to ensure that electric vehicles represent a reasonable share of the total number of new vehicles purchased in Europe.
- Promote the efficient deployment of recharging infrastructure at scale to facilitate market uptake.
Here at Iberdrola, we're contributing to the rollout of electric vehicles by developing and marketing public and private charging services. Iberdrola's green recharging solutions meet the needs of individual customers, companies and fleets, for zero-emissions mobility using energy from renewable sources, innovative services and the latest recharging technology.