Decarbonisation needs to work hand in hand with energy sectors

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On the road to the energy transition, the term “sector coupling” keeps coming up. Behind this term are technologies that could succeed in combining the best energy forms, which would make the entire system more efficient. But how does sector coupling work? Excess energy produced by renewable forms of energy such as solar, wind or water, for example, is fed into the gas grid, thanks to power-to-gas processes, and is stored for future consumption.

A major advantage of sector coupling is the ability to store electricity relatively easily and in large quantities. With gas heating, for example, apartments are supplied with the necessary energy even when water levels are low, when the sun isn’t shining or the wind isn’t blowing. One of the biggest challenges of renewable energy is that, depending on the weather and the season, there is sometimes too much or too little electricity. To compensate for these peaks, electricity can be stored and used across sectors.

Stronger interconnected and common rules are needed
In order to ensure good implementation of sector coupling, the European Commission published a study last year showing the regulatory barriers and gaps that still exist in the electricity and gas sector. The key findings from this were that the technology is not yet fully developed, some necessary regulations are not ready, such as how end-users are taxed when electricity comes from power-to-gas, as well as how common standards and coordinated infrastructure planning should be optimised.

Compensation for electricity grids, fewer greenhouse gases
A study by BloombergNEF (BNEF), in cooperation with the energy management company Eaton and renewable energy generator Statkraft, focuses on the impact of sector coupling on the electricity system and market conditions. It shows how policymakers and regulators could address some of the biggest challenges. The authors see hydrogen, among other things, as crucial to sector coupling, and they believe that energy policymakers and regulators should try to step up the transition between electricity and natural gas systems and remove technical and regulatory barriers to the feed-in of hydrogen into the gas grid. Sector coupling – i.e. the electrification of transport, buildings and industry – would make a significant contribution towards achieving climate targets.

Bringing technology forward together
Clearer structures are needed to implement the study results – not just on paper, but also in real terms – in order to achieve the climate goals. There needs to be a legal framework for hybrid energy systems and the existing rules for electricity and gas need to be made more equal. Across all sectors, the infrastructure should be planned in a more coordinated way, and access and connection to sector coupling technology should be made available for as many forms of energy as possible.

Furthermore, a level playing field that is independent of technology should be created and policy should clarify the tasks and responsibilities of the relevant actors in the electricity and gas sectors, as well as the sharing of costs and benefits between electricity and gas consumers. The modern and extensive European gas network is an essential building block for sector coupling – as the study by BNEF, Statkraft and Eaton shows; however, the increased electricity demand would have to lead to even further strengthening of the electricity grids. Sector coupling could work hand in hand – but energy policy actors need to roll up their sleeves quickly and provide the right incentives.

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