Europe’s mild winter weather may have given skiers a challenging time on the slopes, but the rest of the continent breathed a sigh of relief.
Apart from a cold snap in December, most of Europe has enjoyed unusually high temperatures this winter. And with Spring now in sight, we may be able to avoid an energy crisis that could create severe disruption for industries and millions of homes across Europe.
In the past months, Europe has taken steps to reduce consumption, fill gas storage facilities, and increase coordination. However, a harsh winter can be a significant challenge for everyone.
Recognizing that, we must make a concerted effort in the first months of 2023 to ensure that energy security is not left to chance next winter and in the coming years. It would be foolish to continue to rely on the weather to save a European energy system that is overly dependent on foreign fossil fuel reserves.
Currently, almost 80% of the world’s energy needs are met by fossil fuels.
If ever there was a time to change course and radically change how we produce and consume energy, it is now. The ongoing tragedy of the invasion of Ukraine is the latest in a series of wider crises with implications for oil and gas as a common cause.
2023 is the year to finally break the cycle, through continued investment and innovation in clean energy generation and power networks.
That’s why Iberdrola We have set out five clear areas for action this year—five cornerstones for faster progress toward green energy security.
Turbocharging the deployment of renewable energy
Wind and solar farms are an increasingly common sight, but the work to decarbonize power generation is far from over. Even the UK, where great progress has been made in deploying renewable energy in recent years, is still trust of gas and coal for 40% to 50% of its power generation mix by 2022.
One of the biggest obstacles to adding more renewables to the energy mix remains planning and permitting. To date, too many countries have announced renewable energy targets and ambitions without considering the wider context. We need more than rhetoric. We need mechanisms to deliver renewables, which must be included and prioritized in planning policies and environmental permitting processes.
More renewable energy generation is needed, but if the power grids that deliver this clean energy are not very resilient then the investment will be futile. We need sustained, well-planned investment in these networks.
Modernizing power grids
Worldwide, renewable energy generation will increase fivefold by the year 2040. The level of electricity demand will also increase through greater use of electric cars and low-carbon heating. In the US alone, the electric grid must expand by at least 60% by 2030. Based on historical developments, this represents a century’s worth of work to be completed in less than a decade.
Power grids are the backbone for delivering electric heat and transport—the glue that holds our energy system together. Again, planning and permitting has been a major factor in the lag so far. Regulators overseeing energy networks around the world are increasingly recognizing the need to be more agile, more forward-looking, and more willing to embrace “no regrets” investments—but there’s still room for to progress.
This fuel, essential to the decarbonization of the main areas of heavy industry and the transport sector, has become a hot topic of conversation. Now is the time for meaningful action to increase the deployment of hydrogen produced from renewable energy—the only truly sustainable type (and the most competitive compared to blue or gray hydrogen, produced from fossil fuels).
For green hydrogen to help sectors like ammonia or methanol decarbonize, it should be given a level playing field. Green hydrogen is currently more expensive to produce (from renewable energy) than gray hydrogen (from fossil fuels). However, gray hydrogen comes at the cost of high carbon emissions and we continue to depend on fossil fuels.
The importance of scale innovation to drive optimal deployment of renewables, networks, electric vehicles, and energy storage systems cannot be overstated. At Iberdrola, we recently published our plans to double innovation spending by 2030.
Encouragingly, the International Energy Agency recently stated that global government energy research and development spending will be 5% higher in 2021 than in 2020. This is not enough. Companies and governments must continue to be brave, despite a worsening recessionary environment and tightening investment conditions.
Finally, we must keep our eyes on the long-term prize of decarbonization. 2022 is characterized by short-term, reactive, and often unpredictable government interventions in the energy market: confusing wind taxes, cliff price support schemes, and reforms of old, polluting technologies at the eleventh hour.
2023 should be different. This is the year to show leadership, be decisive, and put us all on a sustainable path out of a crisis caused by over-reliance on fossil fuels.
To protect citizens and our economies for years to come, we must rely on our better judgment, rather than luck.
Iberdrola is the executive chairman of Iberdrola.
The opinions expressed in Fortune.com commentary pieces are solely the views of their authors and do not necessarily reflect the opinions and beliefs of luck.
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