Mr Maillard, a highly topical issue of 2021 is going to be sector-integration. What are your views on its role in the energy transition?
Let us look at the big picture, to start with. The big picture is that the European Union has decided to decarbonise its economy because it is a winning strategy for both environmental and economic reasons. Decarbonising the economy: this is the end. And you must regard the whole process as an investment: you have to spend money at the beginning and your gains will be growth and jobs, all the more necessary after the covid crisis. So the central issue is to find a trajectory that is as cost-effective as possible. This implies organising fair competition in the markets between different technologies, and not picking winners right at the beginning.
Sector-integration is an important means to the end of cost-effective decarbonisation.
It includes many technologies integrating energy and economic sectors like transport and heating, and organising conversions from a vector to another, power-to-heat, power-to-gas and gas-to-power, for instance.
What is the role of electricity in sector integration?
A very simple –and central- one. The basic process in cost-effective decarbonisation is electrification. The reason is that electricity is easy to decarbonise at an affordable cost. More than half of European electricity, and more than 90% of French electricity are already carbon-neutral. Furthermore, using electricity directly is very efficient: both electric engines for mobility and heat pumps are about 3 or 4 times as efficient as their thermal counterparts.
From this perspective in my view
the first pillar of sector integration is about generalising the use of electricity in sectors where it is not very much developed yet: power-to-mobility and power-to-heating.
Don’t worry, I am not going to tell you we need a 100% direct electrification. I am not, because what Europe is looking for is the most cost-effective technology in every application, which may be a non-electrical solution. And here is the second pillar: using decarbonised gaseous or liquid fuels, or storing power as heat or hydrogen so as to differ consumption, whenever it is more efficient. Then of course you have to transform an energy vector into another, and power-to-gas is an important example.
Where do you believe e-fuels are relevant?
This has been clarified by many recent studies and reports, starting with the Commission’s “strategic long term vision” for energy and climate until 2050. Some industrial processes, such as industrial heat up above 400°C and feedstock, and most of heavy transport, maritime or aviation, will be better dealt with if hydrogen and e-fuels are used rather than electricity, just because there is no cheaper electrical technology available, or even none at all. Furthermore, when you need to store power for some time, that is when the load profile cannot be in line with generation, sometimes the best solution is to store it as electricity, but not always: storing heat may be more appropriate, possibly also converting power to hydrogen.
We must prepare for an approach whereby you start from the uses and imagine a combination of energy vectors that answers the users’ needs in the most efficient way, direct use of electricity being dominant but not hegemonic: possibly 50 or 60% of total energy demand in 2050 to reach carbon-neutrality. Smart integration is precisely about finding such meaningful combinations.
Which sector integration technologies do you expect to play a major role?
To answer this question, you must address two issues: the intrinsic efficiency of a combination of energy vectors and their technological roadmap from now to 2050.
Power-to-heat as well as electricity storage as potential energy, in dams, or as chemical energy, in batteries, is highly efficient. Power-to-gas requires a conversion that inevitably wastes energy, about 30% of the input. Power-to-gas-to-power is really inefficient: about 70% of the energy input get lost in the double conversion. If there is no better solution you may use less efficient combinations, but they cannot be the first choice.
Regarding the roadmap, you have to make a clear difference between technologies that are fully mature today, those that are rather for tomorrow, that is close to economic maturity, and some that make sense for the day after tomorrow only, that is neither scalable yet nor economically mature. Storing power as heat, in batteries or in pump storage is mature. Using electric vehicle batteries to support the power system with vehicle-to-grid solutions is close to economic maturity. Many uses of hydrogen, in particular as storage, cannot be expected to be commercially viable before the 30s.
Your company is well-known for being a leader in nuclear and renewable generation. To what extent are you interested as investor in the new markets emerging with sector-integration?
Our strategy is clearly to be present in every, or close to every promising technology of the energy transition. Thanks to a very strong R&D&I department with a staff of about 2000 people and investing half a billion euro a year we are able to be at the forefront of innovation. Before giving examples from today, let me remind you that
EDF a few decades ago was a pioneer of sector-coupling when we introduced at large scale a simple but very efficient power-to-heat technology:
French households and companies currently operate about 11 million hot-water tanks that store cheap power produced at night as hot water available at any time of the day.
We are currently investing in quite a few sector-coupling technologies. Let me give just three examples. We are one of the main shareholders of McPhy, a company that manufactures equipment for the hydrogen value-chain like electrolysers or charging stations. We created from scratch Hynamics, a company that provides hydrogen and connected services to sectors where hydrogen has a bright future. We believe in coupling mobility with power systems through vehicle-to-grid. Through Dreeve, a company created in partnership with a Californian start-up, our ambition is to be one of the leaders of this technology that will play a key role in delivering flexibility alongside with the deployment of electric vehicles.
And what do you expect from the upcoming European legislation?
Basically three main orientations. 1. Foster the development of efficient electric solutions and of the infrastructure for low carbon mobility. 2. Ensure a level-playing field:
competition should be fair between solutions using different energy vectors; in particular taxation and regulations should take into account their respective greenhouse gas emissions.
3. Create a framework conducive to the development of the most efficient gas- or liquid-based processes in sectors where it makes sense, in particular through hydrogen produced by electrolysis from low carbon electricity.
In a sense the upcoming recovery from the covid crisis is a huge opportunity. The EU has taken the bold decision of investing a tremendous amount of money in recovery. If the EU really focuses on efficient decarbonisation we as industry players are eager to innovate and will deploy the most performing solutions.