The EU energy system will play a pivotal role in achieving the EU decarbonisation targets, directly by reducing its own emissions, and indirectly by enabling emission reductions in other sectors. The decarbonisation of the EU energy system will require the development and large-scale deployment of a number of energy solutions, including renewables and energy efficiency, and the increased integration in the planning and operation of the energy system. Simultaneously, the security of energy supply and affordability objectives should not be forgotten, and indeed since 2020 these have regained their importance and intensified the trade-offs to be considered in the energy trilemma (emissions vs affordability vs security).
Policy makers and regulators at all governance levels need to develop policies to push and steer the energy transition in the right direction. Trinomics is very well acquainted with the European and international energy policy frameworks and markets, and has extensive experience in providing policy advice to public sector institutions and other clients.
We master relevant topics such as energy markets, energy finance and support schemes, energy efficiency for industry and the built environment, energy technology and commodity supply chains, energy statistics (including prices, taxation and subsidies), infrastructure planning, operation and regulation, and various others. The economics–based tools mastered by our team, allow us to, for example, develop indicators to track and evaluate the progress of energy policy implementation, to conduct sector and value chain analyses of renewable energy technologies, and to develop policies and regulatory frameworks for new and evolving energy markets and infrastructure. In doing so we aim to contribute to a level playing field for all energy technologies and market participants taking full consideration of their positive and negative externalities.
The Energy team at Trinomics consists of 15+ highly educated staff from all over the world, each providing their unique background to deliver robust, concise energy advice.
- Energy infrastructure & systems
- Energy policy, regulation and markets
- Energy innovation & supply chain
- Energy efficiency
- Renewable and low-carbon energy
Energy infrastructure & systems
As the backbone of our energy economies, energy infrastructure connects producers to consumers. Generation, transmission, and storage systems facilitate the transfer and efficient distribution of fuels and electricity for use in households, transport, and industry. Modernised infrastructure is a key enabler of efficient and well-integrated energy markets, while inadequate infrastructural development can isolate energy consumers and hinder the growth of clean energy sources.
Most of Europe’s energy systems are still structured around national infrastructure, although interconnections between Member States are increasingly built up. Furthermore, some countries remain highly dependent on energy imports from a few producers; and consumers in isolated countries continue to face energy shortages, price spikes, and blackouts. At the same time, underdeveloped infrastructure is slowing the integration of renewable power into existing electricity networks. Infrastructural planning and development will play a crucial role in determining whether the EU can meet its climate targets, and in facilitating the scaling up of renewable sources while ensuring security of energy supply.
The transition to a zero-emission energy system will require major changes in energy transport and storage infrastructure at all levels, from local to supra-national. In order to achieve the energy transition at the lowest possible cost, sector coupling and smart energy transport and storage strategies are essential. In this context, further integration and modernisation of the electricity and gas sectors are of particular interest.
Trinomics regularly advises policy makers on strategies to ensure that infrastructural networks are prepared for the evolution of energy systems. In our work, we have assessed the technical feasibility of upgrading electricity grids, as well as plans for expanding electricity networks across Member State borders. We’ve considered how gas pipelines and storage facilities can be upgraded to accommodate clean fuels such as hydrogen, and we’ve developed new policy frameworks that can be implemented to help prepare existing energy infrastructure operators for a transition away from fossil fuels. Recently, we’ve published studies assessing the impact of EU decarbonisation policies on the replacement of fossil gas with renewable gases in gas infrastructure, the benefits of sector coupling, the development of a regulatory framework for hydrogen networks, and the role of energy storage technologies in promoting security of electricity supply.
Energy policy, regulation and markets
- Creating successful and efficient energy markets must be based on a sound understanding of the current conditions and requires coordination across public and private actors. It should also be based on a clear long-term outlook.
- The role of energy policy and market design is to drive the transition towards a low carbon and more efficient energy system able to satisfy the growing energy needs of our economies securely and at the lowest cost. Renewable energy and energy efficiency are the key to the transition, but they require significant investments and energy security has to be ensured. Higher energy costs can erode competitiveness in the international market (although the energy transition creates new business opportunities), while increasing the share of renewable energy sources requires increased system flexibility. It is clear that there is no single technical or regulatory solution that can achieve a secure, affordable energy transition. However, appropriate policies and regulation that evolve and adapt while providing long-term signals to businesses and consumers can progressively steer the market in the right direction.
- At Trinomics, we have a thorough understanding of EU and international energy markets across a number of energy carriers, including innovative ones such as hydrogen. For example, we analysed the evolution of the prices of main fuels for all sectors in the EU Member States and G20 countries, the impact of energy taxes and subsidies on the energy system and the economy, and the macroeconomic impacts of the Energy Union. Our experience in regulatory matters ranges from scrutiny on the role of regulatory agencies to several studies in support of specific regulations at EU and national level. This includes regulating hydrogen infrastructure, planning for decommissioning and dismantlement of offshore oil and gas production infrastructure, and regulatory frameworks for renewable energy in the EU and developing countries. Our team of experts comes with a wealth of expertise of energy policy and regulation across many markets and countries. We are able to provide a range of insights into technologies, barriers, and options, identifying the right solution for each market.
Energy innovation & supply chain
- Innovation in energy technologies has played a crucial role in the energy transition so far. Thanks to the efforts of the EU and other advanced economies, the costs of renewable energy generation have come down tremendously, enabling an energy transition that is increasingly affordable for advanced as well as developing economies. Going forward, innovation will remain an essential part of the energy transition, with key challenges ahead around decarbonising industry, aviation, navigation and heavy-duty transport. Additionally, technologies and systems to balance supply and demand in a low-carbon energy system will need to be developed further, including power-to-x, battery storage and demand response technologies.
- With the introduction of new energy technologies, new supply chains also emerge with new opportunities for industry development and economic growth. While substituting fossil fuels with renewable energy technologies, potential new risks and dependencies emerge on materials and equipment sourced from abroad. During shocks, such as the COVID-19 pandemic, these dependencies can translate into disrupted supply of energy technologies with potential adverse impacts on the speed of the energy transition.
- Trinomics supports policy makers on policy development around these challenges. Over the past years we delivered studies to identify the impacts of EU RD&I on renewable energy technologies, developed a composite indicator to track innovation performance in clean energy technologies and investigated the issues that prevent energy innovations from successfully transitioning to the market. Furthermore, we have investigated the dependencies and risks of the EU in the most relevant energy technology supply chains and assessed the resilience of those supply chains during and after the COVID-19 crisis.
- Energy efficiency from a public policy perspective means trying to use less energy to make and use things. It is relevant to every single energy consuming device and process, from light bulbs and air conditioners to buildings, cars, and factories. Improving energy efficiency is a core goal of modern energy policy because it yields so many benefits: not only do energy users save money on bills, but they also benefit from increased energy security, better indoor and outdoor air quality, lower health care costs, fewer maintenance expenses, and higher profit margins. Energy efficiency differs from energy conservation in that it is aimed a long-term solutions that cannot be easily reversed, not short-term fixes which can be readily changed; for example, adding ceiling insulation to your home cannot be easily undone, whereas turning down the thermostat can.
- Investment in energy efficiency is hindered by many obstacles, many of which are also central to the climate crisis. The key challenge is that energy efficiency is valued based on something not used – on costs avoided – and the capital expenditures in energy efficient technology must be paid in the short-term, while benefits accrue over years or even decades, and are therefore heavily discounted compared to upfront costs. Furthermore, most people are not aware of the non-energy benefits of energy efficiency projects (such as health and business operations improvements); hence, these benefits are usually not counted when an energy efficiency investment is being considered. Finally, on the implementation side, many public bodies struggle to keep up with government energy efficiency policies for lack of funding, know how, and market capacity.
- At Trinomics, we are actively working to improve and implement energy efficiency policy at international and national levels by leading technical and economic analyses, stakeholder engagements, and evaluations. Examples of our recent work on this topic include the impact assessment of the Energy Performance of Buildings Directive for the European Commission, helping Malta develop its Long Term Renovation Strategy, assisting the European Investment Bank in collecting energy performance data in Ireland, and advising European Parliament on gaps in current energy efficiency policy affecting energy-intensive industries.
Renewable and low-carbon energy
- Climate change is the most pressing issue of this century and given the fact that the lion’s share of greenhouse gas emissions stem from (fossil) energy use, the decarbonisation of the energy sector is pivotal for the achievement of (international) climate change mitigation targets. This means that a near full shift from fossil fuels to renewables and low-carbon energy carriers will be needed and that this shift needs to be accelerated. Driven by the power sector, the share of renewable energy in total energy use has been steadily increasing across the world, for example allowing the EU to reach its target (20% renewables in gross final energy consumption) in 2020. The IEA expects renewable global power capacity will expand by 50% between 2019 and 2024, led by solar PV in emerging economies. Despite this strong growth, several important innovative technologies that are not yet widespread, such as green hydrogen, low carbon fuels, geothermal energy and Carbon Capture and Storage. Research shows that a combination of all the available technologies will be needed to achieve full decarbonisation, especially to achieve greenhouse gas mitigations in hard-to-abate sectors. This includes controversial technologies such as nuclear fission, biomass, blue hydrogen and CCS, and may also include advanced technologies still being developed such as nuclear fusion.
- In order to achieve Paris-aligned climate targets, it is clear that efforts to deploy renewable energy and low-carbon technologies will have to be stepped up. For example, analysis from the European Commission shows that the EU will need to double its share of renewables by 2030. Accelerated deployment is required in particular for heating and cooling purposes as well as in the transport sector. The key questions to answer are about the right technology mix: which technologies should be supported, and which policy tools are appropriate to drive their uptake? In this context, regulatory and fiscal frameworks play a crucial role as these strongly affect the competitiveness of renewable and low-carbon energy carriers. Policymakers need to understand what role the more controversial technologies, such as bioenergy, blue hydrogen or nuclear fission, should play in decarbonisation plans, and should ensure that societal concerns surrounding these solutions are adequately addressed. Lastly, strategies and plans to stimulate decarbonisation in challenging sectors, such as energy-intensive industries, aviation and long-distance shipping will be essential.
- At Trinomics we have extensive experience with renewable policy overall and we have also dedicated expertise in specific technologies, such as CC(U)S, bioenergy, renewable gases (incl. hydrogen), renewable heating and cooling and nuclear fusion. Our multi-disciplinary team of experts comes with a wealth of expertise regarding the different technologies, their barriers, and supporting policy options, identifying the right solution for each market. At the EU level, we also have experience evaluating the impacts of renewable and low carbon technologies, developing regulatory frameworks for new energy carriers (such as hydrogen) as well as assessing different policy options for supporting renewable deployment. Furthermore, we are also supporting national governments to improve their analytical tools, such as energy system modelling, and to evaluate the most promising pathways to climate-neutral electricity generation. A key strength of our work is the assessment of the economics of different solutions and in providing recommendations on how policy frameworks can be adapted to improve the market conditions for the uptake of sustainable energy solutions.