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13 July 2022Bilbao Campus

Strategies to fight high energy prices may threaten a just and green energy transition

As energy prices skyrocket, EU Member states introduce various short and mid-term policies to protect their citizens and reduce dependency from Russian gas. Energy system modellers, researchers and NGOs gathered on the 13th of July 2022 at the University of Deusto, in Bilbao and online to explore how Greece, Spain and Germany are facing the energy price crisis and how the large-scale implementation of a special energy tariff can impact how people use energy.

“We are in the situation of watching as the glacier of the energy system is collapsing.” commented Philipp Heilmaier (DENA, German Energy Agency) about Germany’s efforts to provide enough energy for the upcoming winter. “We need to turn away from fossil fuel, embrace renewable energy and focus in diversification of our energy system.” he added.

“A potential collapse of the economy, thus disrupting incentives in renewable energy investments poses a threat to a just and green transition” added Jorge Fernández (ORKESTRA, Spain) commenting on the so called Iberian Exception (the political agreement enabling a temporary mechanism to cap the gas price to result in electricity bills being halved for about 40%) and on the latest Spanish windfall tax on energy firms, which have benefited from surging prices.

“Such a gas price cap has a high impact on trade on the EU scale,” says Maria Kannavou (E3Modelling, Greece), “introducing it in the entire EU market would jeopardize long term security needed in renewable energy investments.”

Moving away from fossil fuel to renewable energy has now become more than a climate issue, it has now become a security issue. Policy decisions now come swiftly and with a direct impact on everyone’s daily life. Modelling the impact of these decisions before they are made, can help to design policies that benefit European citizens directly. Energy system modellers and researchers from all over Europe work together with a Spanish energy cooperative and municipalities to establish a unique toolkit combined with a so called Causal Model, analysing why and how we make decisions when using energy and human reactions to interventions like policy changes such as change of tariffs or investment incentives in renewable energy production. The so-called WHY model will allow the assessment of impacts of policies on energy systems as well as policy measures.