Last week the European Commission launched a 4-week consultation to inform its strategy for “smart  sector integration”, planned for publication in June.

The strategy aims to ensure a cost-effective approach to meeting long-term climate targets, by addressing barriers potentially preventing an efficient linking of different parts of the energy system, for example through:

• Electrification: Greater use of power in transport and in heating and cooling could allow for direct use of renewable and low-carbon power.
• Decarbonising gas and liquid fuel consumption: Natural gas and petroleum products can be replaced by renewable and low-carbon alternatives, including synthetic gases and fuels produced using electricity.
• Making the energy sector more “circular”: For example, making the most of untapped potential to use waste heat from data centres or industry.

While the contents of the strategy itself are as yet unclear, it seems likely that it will guide the Commission’s thinking as it prepares for legislative proposals (currently scheduled for 2021) on a range of matters under its “Green Deal” programme, including on decarbonisation and renewable energy targets, gas market legislation and energy taxation.

Frontier has been working extensively on topics linked to the smart sector integration strategy, advising clients on the policies required to support cost-effective electrification and deployment of renewable and low-carbon gas and fuels. This has involved work for the European Commission itself on the issues and work (for the European federation of Energy Traders, EFET) on a possible market and climate policy design for smart sector integration.

For more information, please contact media@frontier-economics.com or call +44 (0) 20 7031 7000.