SNS Research Brief 79. Policies for Integrated Energy Systems

Carlo Cambini

Due to restrictive regulatory frameworks, there are not enough large-scale projects with the scope of integrating Europe’s energy systems, according to Professor Carlo Cambini, the author of the new SNS report Policies for Integrated Energy Systems.

SNS Research Brief 79. Policies for Integrated Energy Systems 232.6 KB PDF

The energy sector has become the main target of decarbonization efforts within the EU. A prime objective concerns integrating energy systems – coordinating planning and operation across multiple energy carriers, infrastructures, and consumption sectors. The idea with integration is to capture the economies of scope among different energy carriers, while also lowering transaction costs as well as the climate impact of the energy system. However, according to Carlo Cambini, professor of applied economics at the Polytechnic University of Turin, few large-scale projects have so far been observed.

He explains that the integration of energy systems requires investments in new technologies and that network operators are naturally positioned to lead this process. However, their roles need to be clarified and adapted to new circumstances. Done correctly, this would help solve coordination problems along supply chains and incentivize innovation in the grids. An important step concerns making data over the energy system more accessible. Sharing data among and across sectors would also allow new actors to enter ancillary markets.

Carlo Cambini highlights overly restrictive regulatory frameworks as a cause for the lack of necessary investments in integration.

“The EU and its member states must use their entire policy palette if investments are to come about. Experimentation needs to be encouraged in the energy sector, and I believe that regulatory sandboxes would offer such an outlet,” says Carlo Cambini.

The EU’s strained energy situation is frequently said to be a result of the rapid transition away from fossil fuels and, in some cases, nuclear power. But in Carlo Cambini’s opinion, the lack of complementary infrastructure and technologies regarding renewable sources could just as easily be put at the front and center of this discussion.

The report is published as part of the SNS research project Energy systems of the future.