www.teitimes.com

May 2026 • Volume 19 • No 3 • Published monthly • ISSN 1757-7365

THE ENERGY INDUSTRY TIMES is published by Man in Black Media • www.mibmedia.com • Editor-in-Chief: Junior Isles • For all enquiries email: enquiries@teitimes.com

Integrating electricity markets Markets, not ministers

Achieving a truly integrated European energy

market will require more than just building

new cables and grid interconnections.

Page 13

A new book has added a voice to a growing

consensus: the energy transition is today

driven by economics, not ideology.

Page 14

News In Brief

Shift towards energy

independence comes at a

price

As countries prioritise energy secu-

rity, energy demand will be increas-

ingly met through electrication,

renewables, coal and nuclear, while

reliance on globally traded fuels

declines, according to Wood Mack-

enzie. However, this shift comes

with trade-offs.

Page 3

US lawmakers challenge

Trump wind leases buyback

US lawmakers have written to the

Secretary of the Interior calling for

him to halt a Trump administration

plan to pay $928 million to TotalEn-

ergies to relinquish leases for off-

shore wind projects off the US East

Coast.

Page 4

Asia turns to coal, as energy

crisis splits global markets

Several Asian countries are turning

to coal red power generation to

help offset rising gas prices and sup-

ply risk caused by the closure of the

Strait of Hormuz.

Page 5

Germany considers nuclear

instead of gas

Germany’s Economy Minister

Katherina Reiche has called for a

rethink of her country’s opposition

to nuclear power, a change that

would reverse a phase-out decided

in 2011.

Page 7

Near-700 GW surge boosts

renewable energy prole

Renewable power capacity reached

5149 GW in 2025, after a re-

cord-breaking 692 GW was added,

representing a 15.5 per cent increase

on the previous year.

Page 8

TotalEnergies and Masdar to

form $2.2 billion JV

TotalEnergies and Abu Dhabi Fu-

ture Energy Company PJSC (Mas-

dar) have signed a binding agree-

ment to establish a $2.2 billion 50/50

joint venture that will merge their

onshore renewable activities across

nine countries.

Page 9

Technology Focus

Scaling the number of protection

relays needed to cover more feeders

can be a challenge. A concept that

uses virtualisation could be the solu-

tion, bringing cost, space and envi-

ronmental benets. Page 15

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The European Commission has issued a number of proposals aimed at protecting businesses

and households from energy prices that have once again skyrocketed as a result of

geopolitical upheavals. Junior Isles

Europe’s clean energy transition at risk of slowing down

THE ENERGY INDUSTRY

TIMES

Final Word

Europe must be careful in

balancing short-term relief for

consumers against long-term

goals, says Junior Isles.

Page 16

The European Commission has pro-

posed actions to protect Europeans

from the fossil energy crisis, stressing

that the current geopolitical situation

is a stark reminder that accelerating the

transition to clean, secure and afford-

able energy is an economic and secu-

rity imperative.

Last month, the Commission issued

its ‘AccelerateEU’ Communication in

a move to address the impact of recent

spikes in the price of imported fossil

fuels arising from the war on Iran.

AccelerateEU presents both short-

term and structural measures with

longer-term effect to further reduce

dependency on volatile fossil fuel

markets and build Europe’s resil-

ience against future shocks based

on homegrown clean energy and

electrication.

Ursula von der Leyen, President of

the European Commission, said: “The

choices we make today will shape our

ability to face the challenges of today

and the crises of tomorrow. Our Ac-

celerateEU strategy will bring both

immediate and more structural relief

measures to European citizens and

businesses. We must accelerate the

shift to homegrown, clean energies.

This will give us energy independence

and security, and mean we are better

able to weather geopolitical storms.”

A number of actions have been pro-

posed under the strategy.

Importantly for the electricity sec-

tor, the measures will accelerate the

shift to homegrown clean energy to

replace oil, gas and fossil transport

fuels. By the summer, the Commis-

sion will present an Electrication

Action Plan. It will include an ambi-

tious electrication target and mea-

sures to remove barriers to the elec-

trication of the industrial, transport

and building sectors.

Electrication must be accompanied

by a grid network which is t for pur-

pose, said the Commission. First

steps are ensuring that current legisla-

tion is fully implemented and the ne-

gotiations on the European Grids

Package are concluded swiftly. Max-

imising existing renewable energy

infrastructure is another action, where

rapid repowering of big wind farms

and renewable plants, including off-

shore wind parks and hydropower

plants can quickly deliver much need-

ed additional relief. The Commission

will also present a legislative propos-

al on network charges and taxation,

Continued on Page 2

Europe’s clean energy transition is at

risk of slowing down as investment

gaps widen, according to Eurelectric.

In a new position paper, the organ-

isation representing Europe’s elec-

tricity sector warns that up to €500

billion in annual investment is miss-

ing and calls for urgent action to re-

store investor condence and unlock

private capital.

Europe’s pathway to climate neu-

trality depends on unprecedented

levels of clean energy investment.

Estimates suggest that between €800

billion and €1200 billion per year

will be required, depending on the

scope and timeline of EU targets,

said Eurelectric. Yet current invest-

ment levels fall signicantly short of

this: as much as €500 billion annual-

ly is missing, putting at risk both

electrication and decarbonisation

objectives.

According to Eurelectric, this

shortfall is not due to a lack of tech-

nologies or willingness from indus-

try. Instead, it reects a deteriorating

investment environment that is

weakening the business case for

clean energy projects.

Eurelectric highlights that compa-

nies base their decisions on what can

be described as “strain-to-gain lever-

age”: weighing nancial risks, costs

and debt exposure against expected

returns.

Today, this balance is increasingly

unfavourable. The position paper

notes that several factors are contrib-

uting to this trend: policy uncertain-

ty, which reduces long-term visibili-

ty; volatile power prices, affecting

revenue predictability; grid bottle-

necks, delaying project connections;

counterparty risks, particularly in

long-term contracts.

The result, says Eurelectric, is a

growing paradox: companies are

ready to electrify, the technologies

are available, but key enablers such

as Power Purchase Agreements

(PPAs) are stalling due to credit risk

concerns and an unstable investment

environment.

While the next EU budget (2028–

2034) will play an important role,

Eurelectric stresses that action must

start immediately to restore investor

condence.

The position paper sets out a

10-point derisking agenda aimed at

addressing both regulatory instabili-

ty and nancing barriers. At its core

is the need to create a stable, predict-

able investment framework. Key pri-

orities include:

n Strengthening public nancial

support

n Fully leveraging the European In-

vestment Bank (EIB) toolbox to sup-

port companies investing in clean

energy

n Expanding the EIB guarantee pro-

gramme, building on the existing

€500 million pilot

n Reducing nancial and counterpar-

ty risks

n Improving access to guarantees and

risk-sharing instruments

n Addressing credit risks that limit

long-term contracting

n Scaling up power purchase

agreements

n Removing regulatory and account-

ing barriers

n Improving market frameworks to

support long-term contracts

n Enabling PPAs to function at scale

across Europe

n Restoring condence to accelerate

the transition.

Eurelectric emphasises that a stable

regulatory and policy environment is

a precondition for investment.

“Without clear, predictable rules,

even well-designed nancial instru-

ments will struggle to attract suf-

cient private capital,” it stated.

By combining regulatory stability

with targeted derisking measures,

Eurelectric says Europe can unlock

the investment needed to accelerate

electrication, strengthen competi-

tiveness and deliver on its climate

goals.

“Europe has the technologies and

the ambition to lead the clean energy

transition. What is missing is a suf-

ciently stable and attractive invest-

ment environment.

“Closing the investment gap will

require coordinated action to reduce

risks, strengthen nancial tools and

build investor condence. Without

this, Europe risks falling behind on

its energy and climate objectives.”

Commission moves

to protect Europe

from energy crisis

Ursula von der Leyen: AccelerateEU will bring both

immediate and more structural relief measures

Picture courtesy of www.left.eu

THE ENERGY INDUSTRY TIMES - MAY 2026

The latest edition of the International

Energy Agency’s (IEA) ‘Global En-

ergy Review’ revealed energy de-

mand grew at a slower pace in 2025

than the year before, but electricity

consumption continued to rise much

faster than overall demand – with so-

lar PV becoming the largest contrib-

utor to growth in global energy supply

for the rst time.

The report shows that overall global

energy demand growth slowed to 1.3

per cent in 2025, slightly below the

previous decade’s average of 1.4 per

cent and signicantly lower than in

2024. The main reasons for this slow-

down were lower global economic

growth, less extreme temperatures in

some regions, and rapid uptake of

more efcient technologies.

At the same time, global electricity

demand increased by around 3 per

cent – well over twice the rate of over-

all energy demand growth. Although

electricity demand growth was slow-

er than in 2024, reecting factors such

as lower cooling demand in India and

Southeast Asia amid less severe heat-

waves, it remained above the average

of the past decade. Electricity demand

growth was driven by multiple sectors

across buildings and industry – and

boosted by fast-growing demand

coming from electric vehicles and

data centres.

All major fuels and technologies

expanded to meet rising demand, but

at very different rates. Solar PV was

the single largest contributor to

growth in global energy supply in

2025, accounting for more than 25 per

cent of the increase – the rst time on

record that a modern renewable

source has led global primary energy

supply growth. Natural gas took the

next largest share, at 17 per cent, re-

ecting its role in power generation

in many countries. Overall, renewable

sources and nuclear met nearly 60 per

cent of all growth in energy demand

– and power generation from these

sources exceeded total growth in elec-

tricity demand.

“Global energy demand continued

to increase in 2025 against a complex

economic and geopolitical backdrop,

with one trend unmistakeable: the

expanding electrication of econo-

mies,” said IEA Executive Director

Fatih Birol. “Electricity consumption

is growing much faster than overall

energy demand – and one energy

source is growing much faster than

any other. Solar PV accounted for over

a quarter of all of the world’s energy

demand growth – more than any oth-

er source, for the rst time – followed

right after by natural gas. In today’s

rapidly shifting landscape, countries

that prioritise resilience and diversi-

cation will be best placed to manage

volatility and deliver secure and af-

fordable energy in the years ahead.”

In the electricity sector, the addition-

al 600 TWh of solar PV generation

worldwide in 2025 marked the largest

structural increase ever recorded in a

single year for any electricity gener-

ation technology, contributing to a

decline in coal red electricity gener-

ation globally. Battery storage was the

fastest growing power sector technol-

ogy in 2025. The roughly 110 GW of

new battery storage capacity added

during the year exceeded the largest

ever annual capacity additions for

natural gas. Meanwhile over 12 GW

of nuclear power reactors began con-

struction in 2025, amid renewed mo-

mentum for nuclear projects in sever-

al regions.

New gures by independent think-

tank Ember revealed global clean

power output grew faster than elec-

tricity demand last year. Ember also

noted that the rapid growth of solar

power in particular contributed to a

small annual decrease in output from

fossil fuel power stations.

It marked the rst time fossil fuel

output had fallen since the 2020 pan-

demic year, Ember said. Renewable

energy sources also generated more

electricity than coal red power sta-

tions in 2025, Ember said, “for the

rst time in the modern power sys-

tem”, extending a trend rst seen in

the rst half of last year.

ensuring among others, electricity

is taxed less than fossil fuels.

It said temporary measures would

be timely and targeted. Protecting

consumers, including industry,

from price peaks can include target-

ed income support schemes, energy

vouchers and social leasing

schemes, lowering excise duties on

electricity for vulnerable house-

holds. The Commission will also

adopt a State Aid Temporary Frame-

work, which will provide addition-

al exibility for national govern-

ments, including emergency

measures to support the most ex-

posed economic sectors.

Boosting investments will also be

a priority. Signicant resources are

available at EU level, such as those

under the Recovery and Resilience

Facility (‘RRF’: €219 billion) and

cohesion policy funds. In the current

crisis, “speed and impact are para-

mount”, said the Commission,

which will assist member states to

make maximum use of available EU

funding. However, public money

alone will not cover the signicant

investment needs (€660 billion a

year until 2030) for the energy tran-

sition. To mobilise private invest-

ments, the Commission therefore

adopted a Clean Energy Investment

Strategy in March 2026. The Com-

mission will organise a Clean Ener-

gy Investment Summit bringing

together the nancial services in-

dustry, including major institution-

al investors, industrial leaders, proj-

ect developers and public nanciers

to accelerate private nancing.

The EU’s climate commissioner

Wopke Hoekstra warned, however,

that there is no nancial “work-

around” for “mind-boggling” ener-

gy price rises in Europe. Hoekstra

said: “The only way forward is more

electrication, more nuclear, more

solar, more wind, more battery ca-

pacity, more interconnectors in the

European Union, and all of it with

much more speed.”

Following the publication of the

AccelerateEU strategy, the Boards

of Directors of the European Invest-

ment Bank (EIB) Group approved

a total of €10 billion in nancing,

including almost €2 billion for ini-

tiatives to expand Europe’s clean

energy investments, ensure afford-

ability and bolster competitiveness.

The new nancing supports EU

policy priorities and the European

Commission’s “Clean Energy In-

vestment Strategy” from March

2026 as well as the AccelerateEU

plan. Under both initiatives, the EIB

Group will work with the Commis-

sion to fast-track Europe’s switch

from fossil fuels to clean energy.

The Board of the EIB endorsed

loans to support the production of

offshore wind power in Germany

and solar energy in Italy as well as

the accelerated use of renewables

by businesses in Austria. The -

nancing also backs improvements

in energy savings in heating systems

in Latvia and Dutch grid upgrades

that increase capacity for renew-

ables and expand charging possibil-

ities for electric vehicles.

Commenting on Europe’s depen-

dency on imported fossil fuels,

which has now been highlighted for

the second time in less than ve

years, EIB Group President Nadia

Calviño, said: “There is one clear

lesson from Russia’s invasion of

Ukraine and the conict in the Mid-

dle East: Europe needs to break free

from its fossil fuel dependence.”

“The investments approved today

conrm the commitment of the EIB

Group to deliver on the energy tran-

sition and strengthen Europe’s stra-

tegic autonomy.”

Continued from Page 1

Wind and solar power have grown

faster than almost anyone predicted

but projecting their future expansion

remains surprisingly difcult, nd

researchers at Chalmers University of

Technology, Sweden.

Researchers at the University have

developed what they call a computa-

tional “time machine” – a model that

outperforms existing projection

methods by using AI techniques to

analyse historical growth patterns

across countries.

Their central projection shows that

onshore wind is likely to supply

around 25 per cent of global electric-

ity by 2050, with solar reaching about

20 per cent. This is consistent with the

2°C target, but falls short of what is

required for 1.5°C.

Predicting the future is particularly

challenging for technologies like

wind and solar, where rapid cost de-

clines are offset by growing barriers

such as public opposition, infrastruc-

ture constraints and policy shifts.

“Existing models are very good at

identifying what needs to happen to

reach climate targets, but they can’t

tell us which developments are most

likely. That’s the gap we wanted to

ll,” said Jessica Jewell, Professor at

Chalmers University of Technology.

Across more than 200 countries, the

researchers identied a recurring pat-

tern in how wind and solar power

grow: long periods of relatively

steady expansion punctuated by sud-

den growth spurts often triggered by

policy shifts.

“Most models assume a smooth

S-shaped growth curve, but that’s not

how it actually looks in the real world.

Growth often comes in bursts, and if

you ignore that, you can misjudge how

fast technologies will expand,” said

Avi Jakhmola, a PhD Student at

Chalmers University of Technology

and rst author of the paper published

in Nature Energy.

With the goal of improving on cur-

rent predictions, Jakhmola created a

model built on 13 000 virtual worlds.

In each of these worlds, solar and

wind power develop in different ways

– from the fastest possible expansion

to the slowest – and everything in

between.

A machine learning algorithm was

then trained on all these worlds to

learn to predict global outcomes from

early national trends.

“When we apply the model to real-

world data, it can tell us what is the

most probable outcome for the future

– given what we have seen so far and

given all the virtual worlds it has

seen”, said Jakhmola.

By 2050, the model projects onshore

wind reaching around 26 per cent of

global electricity (central range: 20-

34 per cent), and solar around 21 per

cent (15-29 per cent). This broadly

aligns with 2°C-compatible pathways

but falls short of what’s needed for

1.5°C.

Professor Jewell said: “It’s long

been a joke how bad technology fore-

casts are. But if you’re a decision

maker, trying to gure out how hard

to push for change, you need a realis-

tic baseline. Our study is the rst step

towards developing such a realistic

view of the future.”

As countries prioritise energy security,

energy demand will be increasingly

met through electrication, renew-

ables, coal and nuclear, while reliance

on globally traded fuels declines, ac-

cording to Wood Mackenzie. Howev-

er, this shift comes with trade-offs.

Under its new conict scenario –

part of its ‘Lens Energy Transition

Scenarios’, which explores how sus-

tained geopolitical instability could

reshape global energy demand, sup-

ply and investment through 2050 –

Wood Mackenzie predicts energy

systems will become more domestic

and diversied, but also more costly,

while near-term emissions rise due to

increased coal use before converging

with the base case over the longer

term.

The scenario assumes a major geo-

political escalation beginning in early

2026, disrupting 15-20 per cent of

global oil and LNG supply. In the near

term, oil demand falls by around 9 per

cent due to supply outages before re-

covering to pre-crisis levels by 2030,

Wood Mackenzie noted.

Beyond 2030, structural shifts take

hold as countries accelerate efforts to

reduce reliance on imported fuels. Oil

and gas demand declines more rapid-

ly than in the base case, as govern-

ments prioritise domestic and diver

sied energy systems.

The shift towards energy indepen-

dence comes with higher system costs,

as countries move away from globally

optimised supply chains towards do-

mestic production and diversied

sourcing, says Wood Mackenzie.

“Energy independence reduces ex-

posure to external shocks, but it comes

at a structural cost premium,” said

Lindsey Entwistle, Principal Analyst,

Scenarios & Technologies. “This cre-

ates new competitiveness challenges

for energy-intensive industries, while

advantaging more self-sufcient

regions.”

Jom Madan, Principal Analyst, Sce-

narios & Technologies, noted: “Ener-

gy systems become more local, more

diversied and less reliant on complex

international trade.

“Electrication and nuclear take

priority, while hydrogen and carbon

capture are de-prioritised due to cost,

efciency and security consider-

ations,” he added.

Headline News

Shift towards energy independence comes at a price

Solar and gas lead on meeting

energy demand growth, says IEA

All major fuels and technologies expanded in 2025 to meet rising demand, but at very

different rates. Global energy demand growth was met by a diverse range of sources in 2025,

led by solar and then gas, according to a new International Energy Agency report. Junior Isles

Solar and wind on track for 2°C target

but not for 1.5°C

Photo by www.pexels.com

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he EU’s Grids Package re-

vealed at the end of last year,

marks a new approach to ener-

gy infrastructure by bringing a truly

European perspective on infrastruc-

ture planning, while accelerating

permitting procedures and ensuring a

fairer division of costs regarding

cross-border projects. The new ap-

proach will allow the best use of ex-

isting energy infrastructure and, in

parallel, accelerate the development

of grids and other physical energy

infrastructure across the EU.

Yet building more cables alone wi ll

not be enough to achieve this with-

out measures to enable Europe-wide

market integration and participation.

For example, renewable energy in-

termittency is creating more volatile,

variable costs and there is a lack of

long-term nancial instruments to

hedge against these risks. Silos be-

tween IT systems are impeding

cross-border power trading while

complex settlement processes, high

collateral requirements and opaque

rules can deter smaller companies

from entering the market. Overcom-

ing these barriers is an important

factor in bringing energy generators,

traders and utilities of all sizes into

the cross-border electricity market

and enabling greater energy system

integration.

Europe recently reached a major

milestone in the energy transition as

renewables produced more electrici-

ty than fossil fuels for the rst time

in the EU and the UK. Wind and so-

lar power generated 30 per cent of

EU electricity while fossil fuels gen-

erated 29 per cent, according to

global energy think-tank Ember’s

new ‘European Electricity Review’.

Meanwhile, data from Renewab-

leUK showed renewables generated

a record 50.8 per cent of the UK’s

electricity in 2024 – the rst year in

which renewables exceeded 50 per

cent, and a substantial increase on

the previous high of 46.4 per cent in

2023.

Yet the accelerating transition to

intermittent renewable power sourc-

es is also producing more volatile,

regionally variable costs for

cross-border transmission capacity.

Extreme uctuations in renewable

output drive price signals to diverge

sharply between ‘bidding zones’ –

regions with uniform internal prices

– causing a build-up of congestion

costs where demand exceeds inter-

connector capacity. Research also

shows that renewable price volatility

can spread across borders as markets

become more integrated. These

growing price variations and uctua-

tions are creating a riskier market

landscape for cross-border power

trading.

As renewable generation expands,

variability is increasing and price

distributions are widening across the

continent. As energy price volatility

increases, market participants in-

creasingly need the ability to buy

long-term transition capacity to help

plan energy portfolios and hedge

their risks.

Complex, slow settlement process-

es, high transaction costs and large

collateral requirements for cross-bor-

der capacity auctions also raise barri-

ers to entry for smaller market par-

ticipants. A lack of interoperable,

transparent guarantees, credit limits

and margin calls across different

platforms create further confusion

around collateral arrangements.

Meanwhile, the fragmented patch-

work of IT systems across markets

further increases the cost and com-

plexity of market integration.

Encouraging market participation

among companies of all sizes sup-

ports greater integration of Europe’s

energy resources to provide secure,

sustainable power for all. This could

be supported by lowering barriers to

market entry and reducing risks

through long-term price certainty, in-

teroperable IT systems, fairer collat-

eral requirements, underpinned by a

level playing eld of fair, transparent

and consistent market rules.

For example, Joint Allocation Of-

ce (JAO) provides mechanisms that

allow market participants to buy

cross-border transmission capacity at

a set price up to a year ahead, bring-

ing greater predictability and stabili-

ty to increasingly volatile costs. To

further hedge against long-term

risks, market initiatives could intro-

duce more forward auctions an-

chored in long-term transmission

rights. This could include Financial

Transmission Rights (FTR) obliga-

tions requiring transmission system

operators (TSOs) to pay the price

difference when congestion costs are

higher at their end, while requiring

market participants to pay when con-

gestion costs are higher on their side.

FTR obligations could balance risks

between buyers and sellers and offer

long-term hedging against conges-

tion costs, helping to de-risk

cross-border capacity auctions for all

utilities and market participants.

Lowering cost and complexity is

also vital to broaden access to Eu-

rope’s cross-border electricity mar-

kets. Collateral risks need to be re-

duced by recalibrating collateral

requirements to real-world risk ex-

posure. Collateral arrangements

should also be interoperable across

borders, further simplifying and

streamlining markets for all. More

standardised cross-border collateral

requirements would allow market

participants in all countries to plan

cash and credit efciently.

Simplifying and speeding up settle-

ments could lower barriers to entry

too. For example, centralised service

models now consolidate market ac-

tivities from invoicing and clearing

to settlements through a single plat-

form. Settlement processes could be

further streamlined to curb transac-

tion costs while keeping key safe-

guards in place.

An open, equal marketplace is a

prerequisite for mass participation

and thus market liquidity. For exam-

ple, harmonised allocation rules have

now been implemented across 45

borders within a Single Allocation

Platform that shows the calculations

behind all capacity allocations, creat-

ing a trustworthy, transparent and

fair marketplace. Ongoing regulatory

engagement on long term methodol-

ogies could ensure continued clarity

around everything from allocation

processes to handling of revenues

and risks across timeframes.

Allocation rules and capacity cal-

culation methodologies could also be

adapted to evolving market needs in

collaboration with transmission sys-

tem operators, market operators, reg-

ulators, and market participants. As

methodologies evolve, the aim

should be to ensure clarity for partic-

ipants, while maintaining propor-

tionate and prudential safeguards.

This creates an agile, transparent and

democratic marketplace responsive

to evolving needs and drawing on

collective input.

Europe is rapidly building the in-

frastructure for interconnected elec-

tricity grids. Yet integrating Europe’s

energy resources ultimately depends

on allowing all participants and

companies to participate in

cross-border electricity markets.

The EU is already making substan-

tial progress with initiatives such as

the Electricity Market Design Re-

form (EMDR) that aim to widen

market participation and boost li-

quidity. Work is also underway on a

new user-friendly, exible cross-bor-

der transmission capacity market-

place for Europe designed for seam-

less scalability and third-party

interoperability, further enabling

mass market participation.

Yet achieving a truly integrated Eu -

ropean energy market depends on

broadening access to the market, en-

suring everything from credit models

and nancial instruments to capaci-

ty-allocation methodologies are de-

signed to enable mass participation.

Thomas Kieffer is Chief Operating

Ofcer at Joint Allocation Ofce, a

service company that hosts Europe’s

single leading trading platform

(e-CAT) for cross-border transmis-

sion capacity.

oining up grids across urope would allow surplus clean power to ow to areas with scarce supply oosting

collectie energy security and sustainaility ut uilding more cales and grid interconnections alone will not e

enough to ensure market integration argues Thomas Kieffer at oint llocation fce

Integrating electricity

markets relies on

widening market

participation

THE ENERGY INDUSTRY TIMES - MAY 2026

Industry Perspective

Kieffer: Silos between IT systems

are impeding cross-border power

trading

ambition that markets are being asked

to nance. It is an economic reality

that markets are acting on. The dis-

tinction matters enormously. Policy

can be reversed. Prices cannot be

“uninvented”.

Public policy still plays a role. It

provides the initial spark that opens a

market, sets a standard, or de-risks a

rst mover. But once the economics

take hold, the engine runs on its own.

The transition is self-sustaining not

because governments have held rm,

but because the cost curves have

moved beyond the point of return.

The most powerful evidence lies in

the Levelised Cost of Electricity

(LCOE), the cost per unit of output

over a proect’s lifetime. Between

2010 and 2023, the LCOE of main-

stream clean energy technologies de-

clined 63 to 90 per cent. Renewables

are no longer merely cleaner than

fossil fuels. In most of the world, they

are cheaper. Across Asia Pacic, solar

has already displaced thermal coal as

the least expensive source of electric-

ity, with production costs expected to

run 32 per cent below coal by 2030.

Cost competitiveness does not need

political support to sustain itself. The

notion that clean energy is a luxury

for wealthy nations is being disman-

tled on the ground. In Pakistan, farms

and factories are installing rooftop

solar not out of climate conviction but

as a hedge against rising fossil fuel

prices. Pure economic self-interest

he commentary “Iran: acceler-

ating the energy transition” (The

Energy Industry Times, April

2026) argued that the Iran conict has

become an unlikely catalyst for the

transition to net zero, the green shift,

despite all its disruption to global en-

ergy markets. Powering the Unstop-

pable Green Shift: How Policy and

Finance Transform Business to Lead

Climate Action’ (Routledge, 2026)

builds directly on that idea. Net zero

is no longer a political aspiration. It is

an economic inevitability.

The book traces the relationship

between policy, nance, and business,

with corporations at the heart of exe-

cution. Real-world cases anchor every

claim, illustrating that decarbonisa-

tion is not a cost to be absorbed but a

competitive strategy for long-term

value creation. The green shift is the

dening investment opportunity of

the century, and it is already under

way, with or without political consen-

sus behind it.

For too long, the energy transition

was framed as a virtuous but costly

state proect, built on subsidies and

political will. That framing is obso-

lete. Decarbonisation has crossed a

turning point. It is no longer a policy

drove that decision. Once clean ener-

gy is the cheaper option, the transition

moves forward on its own, regardless

of political conditions.

The energy transition is effectively

a capital exodus triggered by the col-

lapse in value of fossil fuel assets.

While the 90 per cent fall in

clean-technology LCOE acts as a

potent market “pull”, the “push” of

stranded assets – the physical hold-

ings whose investment value can no

longer be recouped and must be

written-off – has become the primary

driver of capital ight. As the global

fossil fuel market, currently valued at

over  trillion, faces a slow unwind-

ing, the nancial sector is pricing in a

hard reality: unmitigated climate

change is not merely an environmen-

tal threat but a direct erosion of “po-

tential output,” permanently degrad-

ing the foundations of global capital

stock and Total Factor Productivity.

The arithmetic of this transition is

brutal: the Climate Policy Initiative

estimates that while 266 trillion in

climate nance is required by 2050, it

represents the only viable hedge

against 232 trillion in total losses

proected under a business-as-usual

traectory. With Swiss Re warning of

a 23 trillion annual hit to global

GDP, decarbonisation has shifted

from a policy ambition to a duciary

duty. Financial institutions are not

retreating from fossil fuels as a result

of political persuasion they are exe-

cuting a retreat from assets that are

becoming worthless, whether or not a

specic government has strong net

zero legislation in place.

The old obection that renewables

are too intermittent to be reliable is

losing ground fast. Battery storage is

transforming electricity into a trad-

able commodity, and in 2024, average

lithium-ion pack prices dropped be-

low 100kWh, making electric vehi-

cles cost-competitive with combus-

tion engines. Markets competed that

threshold into existence. Shenzhen

has fully electried its eet of 16 500

buses and 22 000 taxis across a city of

1 million people, proving the com-

mercial case at scale. When Google or

Amazon invest in Small Modular

Reactors (SMRs) to power their AI

infrastructure, they are following a

logic of energy security and price

stability. These are chiey commer-

cial decisions.

One critical insight from the book,

however, is that even a weak signal

from the state is now sufcient for

business and capital to act. A decade

ago, clean energy needed sustained

policy support to be viable. Falling

technology costs, the growing risk of

stranded assets, and the competitive

pressure of market-driven deploy-

ment have together created a momen-

tum that political volatility can slow

but cannot stop. A government can

withdraw a subsidy, repeal a target, or

abandon a multilateral commitment.

It would nd it difcult to raise the

cost of solar back above coal. It can-

not restore the investment case for

assets the market has already decided

to strand.

The debate about whether to pursue

the transition is largely over, not

THE ENERG INDUSTR TIMES - MA 2026

Decarbonisation Series

The primary engine of decarbonisation

is markets, not ministers

because the politics have been re-

solved but because the economics

have moved on without them. For

policymakers, the task is no longer

convincing the market to act, as it is

already acting. The task now is re-

moving the bottlenecks slowing it

down. The 0 million km of grid up-

grades required globally represent a

serious obstacle, and without them,

clean energy assets risk becoming

stranded for want of connection rather

than want of demand. Governments

that focus on infrastructure, planning

reform, and grid investment are

working with the market.

For investors, vague commitment

must give way to specic contractual

terms that make proects genuinely

bankable. Capital follows certainty,

and the economic case is now strong

enough to provide it.

The green shift is unstoppable be-

cause it has become the most compet-

itive economic choice available. The

 trillion global fossil fuel economy

is being dismantled and rebuilt not by

ministers issuing declarations but by

the unsentimental pursuit of long-

term value. Those who read the decar-

bonisation landscape as a map of

business opportunity rather than a

regulatory burden will dene the

century. The economics have spoken.

Policy may inuence the pace. It no

longer sets the direction.

Joseph Jacobelli, head of single-fam-

ily ofce ourne mpact Capital,

brings 35+ years in energy markets.

e champions sustainable nance

through his Asia Climate inance

Podcast and writings like his second

book, ‘Powering the Unstoppable

Green Shift’.

Jacobelli: Cost competitiveness

does not need political support to

sustain itself

The economic inevitability of the green shift. The energy transition is effectively a capital exodus

triggered by the collapse in value of fossil fuel assets

Source: Joseph Jacobelli

Renewable power generation costs in 2024 (extract)

A new book has added a voice to a growing consensus: the energy transition is today driven by economics, not

ideology. Joseph Jacobelli

s global electrication pro-

gresses and energy demand

rises, existing grid infrastruc-

ture faces unprecedented pressure.

Energy providers expect to double

their grid capacity in the next decade

while modernising aging infrastruc-

ture. To meet these challenges, tech-

nological innovations, automation,

and standardisation are essential.

One key area where there has been,

and continues to be, technological

innovation, is protection and control

in power grids – this is crucial for

safeguarding critical assets like

transformers and circuit-breakers,

spanning both high-voltage (trans-

mission level, 230 kV and above)

and low-voltage (distribution level,

below 35 kV) infrastructure.

Earlier this year, Siemens Smart

Infrastructure (Siemens) announced

a signicant development for the

sector with the introduction of Sipro-

tec V, the virtualised version of its

Siprotec 5 protection and control de-

vice. This innovative solution is de-

signed for digital substations and en-

ables simple, scalable, and secure

power grids with up to six months

faster proect execution.

Siprotec V is the latest phase in the

evolution of protection technology,

which began with electromechanical

relays in roughly 1910. These were

advanced with the introduction of

static solid-state relays in the 1960s.

The next important step saw the rst

use of digital numerical relays in the

190s.

Commenting on the next steps

leading to this latest innovation,

Saurabh Talwar, Global Product

Manager for Virtualization and AI,

Siemens Smart Infrastructure Sie-

mens, said: “Siemens introduced its

Siprotec 5 modular relays around

2012. This is an embedded proces-

sor – a physical device that sits in

the customer environment. And then

around 201 we had the concept of

centralised protection, where one

digital numerical relay would be

dedicated to 2-3 feeders as opposed

to one feeder. But with centralisa-

tion, you cannot cover the whole

substation. With 20 feeders, you will

still need a number of boxes even

with the centralised approach.”

As protection has evolved over

time, so have utilities’ challenges in

terms of power infrastructure. Sie-

mens worked closely with industry

in developing the solution to these

challenges.

“I had the privilege of working

with roughly 20-25 customers early

on in this whole product develop-

ment to try to capture all the chal-

lenges our industry is facing. We

summarised these into three buckets:

increasing grid capacity pressure to

modernise and the people factor,”

said Talwar.

He explained that the need for

more grid capacity is being driven

by growing electrication – where,

for example, electric vehicles are be-

ing introduced on the network – and

growing power demand from the

data centres needed to handle the

surge in articial intelligence. “Utili-

ties always say: we need to double

our grid capacity in the next 10

years.’ And this is a massive under-

taking, especially at the pace at

which we are going,” he noted.

The industry is also under pressure

to modernise an ageing infrastruc-

ture, and there is a big expectation

that this has to be done rapidly. Tal-

war said: “Proect times must be re-

duced from say, two years, to per-

haps one year or less. And there is a

big expectation to do more automa-

tion and standardise solutions in our

power infrastructure.”

All of this, however, requires

skilled people, which, says Talwar is

“lacking in our industry”. He said:

“There’s a lack of skilled resources

and a lot of experts are close to re-

tirement We cannot ignore the

people factor anymore we need peo-

ple to do this modernisation so we

can catch up with the needed grid

capacity. If we do nothing, the gap

will only widen.”

According to Talwar, virtualisation

can address these challenges. Virtu-

alisation is a technological term en-

compassing approaches like contain-

erisation and virtual machine (VM)

technology.

For Siemens, virtualisation enables

centralisation of the entire electrical

substation. “Essentially, with central-

isation, we are talking about scal-

ability,” said Talwar. “In no way

does Siprotec V compete with Sipro-

tec 5. If customers don’t want to cen-

tralise or scale, they are O with

Siprotec 5 but if they want to scale

beyond 10-20 feeders, that’s where

Siprotec V really shines.”

Essentially, the solution supports a

transition phase where embedded

systems can act as the main system,

and virtualised solutions as backup

for testing and familiarity.

Talwar also stresses that Siprotec V

is not a digital twin. “A digital twin

emulates something physical, where-

as Siprotec V is a software-dened

product. However, a digital twin can

connect to Siprotec V to simulate

sensors and inect data for testing

and validation.”

By introducing Siprotec V, Siemens

is decoupling the protection applica-

tion (containing their proprietary al-

gorithms and IP) from the embedded

Siprotec 5 physical boxes. These ap-

plications are then hosted on an in-

dustrial PC or server.

“Crucially, Siemens is not rede-

signing protection algorithms from

scratch. We are reusing proven al-

gorithms from the embedded boxes,

ensuring consistent performance

and customer experience.” said Tal-

war. “The physical relay is still

there but what we are doing, is tak-

ing the application out of the physi-

cal relay and hosting it in a virtual-

ised environment.”

Siemens’ solution can host up to 60

virtual protection applications (virtu-

al relays or virtual IEDs – Intelligent

Electronic Devices) in one main sys-

tem. There can also be a backup sys-

tem of the main to ensure reliability

and prevent loss of visibility if one

server fails.

In terms of hardware, Siprotec V

requires an industrial PC or server

certied for substation environ-

ments, i.e. complying with 6150-3

or IEEE 1613 standards. Although

these servers are commercially avail-

able off-the-shelf, Siemens whitelists

and validates them for performance.

“It is very important that Siemens

whitelists these servers because we

have to validate performance – pro-

tection is time critical. We have to

ensure that it meets certain time pa-

rameters and tolerance levels,” Tal-

war explained.

The server uses the Debian Linux

operating system (OS), chosen for its

robustness in industrial applications.

Protection and control applications

are deployed on top of the OS, reus-

ing existing Siprotec 5 applications.

According to Siemens, the use of a

“bay-wise” (feeder-wise) concept is

crucial. This allows individual virtu-

al IEDs per feeder to be taken out of

service for maintenance without dis-

rupting other feeders.

The underlying technology is

based on “containerisation”, where

each app is an independent, contain-

erised application.

Talwar explained: “It’s ust like

your iPhone, where the phone itself

is the hardware server and the apps

that you see on your phone are pret-

ty much the applications for protec-

tion and control. ou can delete or

install an application and one appli-

cation does not interfere with anoth-

er – each is containerised in its own

environment.”

It has a web UI (user interface),

which is an inbuilt HMI (Hu-

man-Machine Interface) system that

allows technicians to interact with

the system, view substation layouts,

operate equipment (e.g., openclose

breakers), and see measurement de-

tails and logs. This provides consoli-

dated visibility of the entire substa-

tion, unlike embedded boxes which

only gave visibility at the individual

bay level.

“Since all the applications are

consolidated into one server, the UI

experience is also consolidated into

one large machine, essentially cen-

tralising the UI,” said Talwar. “It’s

important to note that this UI is not

a SCADA supervisory control and

data acquisition system. It connects

to the SCADA system, which su-

pervises events and alarms, but does

not replace it.”

Notably, he says Siprotec V is not

cloud-based it is a software solu-

tion that sits inside the customer’s

existing infrastructure.

Virtualisation has several key tan-

gible benets. Firstly, it enables

faster proect execution. According

to Siemens, turnkey proects (de-

sign, fabrication, building, testing,

engineering, commissioning) can be

accelerated by up to six months

when focusing on pre-fabricated

pre-engineered protection & control

substation building. This is

achieved by reducing the number of

physical panels needed resulting in

a smaller building footprint, leading

to an overall compressed timeline.

Describing a typical proect, Tal-

war said: “When we look at the de-

sign phase, the engineering phase,

fabrication, engineering, testing –

all the typical phases in every pro-

ect that we do – a proect of roughly

20-25 protection panels is reduced

down to two panels. So, the amount

we have to fabricate is less... this

means testing can start sooner,

which shrinks the overall timeline.

On top of this, the reduction in pan-

els means substation space require-

ments can be drastically reduced

by up to 45 per cent.”

The second maor benet is cost

reduction. According to Siemens,

panel costs can be reduced by up to

25 per cent. At the same time, cop-

per cable costs can be reduced by

up to 0 per cent due to digitalisa-

tion and less physical wiring.

This all adds up to better sustain-

ability. “Less panels, means smaller

building footprint, which means

less steel, less concrete. And on top

of that, less copper cable. If you

combine all of this with the other

PIs, it’s a better sustainability sto-

ry,” said Talwar. According to Sie-

mens’ calculations, the reduction in

copper cables also leads to a 50 per

cent reduction in carbon emissions

per substation.

The virtualisation concept, by pro-

viding computing power and re-

sources on an industrial PCserver,

enables the hosting of complex AI

applications directly in the substa-

tion. This aims to make substations

“smarter” and help utilities make

better decisions.

Talwar noted: “Siemens is actively

exploring and working on specic

AI applications and will bring them

to the market in the near future.”

Having announced the virtualisa-

tion concept a few months ago, Sie-

mens will make it commercially

available some time this year.

Talwar concluded: “We cannot

udge uptake in terms of mass de-

ployment in the next 5 or 10 years

but will be monitoring the market.

We are already in discussions with

customers. In the early stages we

will denitely be doing a lot of pilot

proect around the world, and these

will continue for the next 3-5 years.”

How to scale the number of protection relays needed to cover more feeders can be a challenge. A concept that uses

irtualisation could e the solution ringing cost space and enironmental enets Junior Isles reports.

Power grid protection eyes

virtual scaling

THE ENERG INDUSTR TIMES - MA 2026

Technology Focus

Siprotec V is the virtualised

version of Siemens’ Siprotec 5

protection and control device,

designed for digital substations

THE ENERGY INDUSTRY TIMES - MAY 2026

Final Word

s the Strait of Hormuz remains

closed, and the war against

Ukraine rumbles on, European

households and businesses continue to

creak under the pressure of astronom-

ical energy prices. In response to the

ongoing energy crisis, the European

Commission recently issued its Accel-

erateEU Communication – one part of

“a toolbox of targeted temporary mea-

sures” to address the recent spikes in

the prices of imported fossil fuels aris-

ing from the war on Iran. Yet striking

the right balance between bringing

short-term relief to its consumers,

while maintaining long term objec-

tives for the bloc, is a tricky one.

According to the Commission, the

Middle East situation has already cost

the EU more than €24 billion, about

€500 million per day, due to continued

dependence on imported fossil fuels.

It is no wonder AccelerateEU stresses

the need to replace fossil fuel imports

with homegrown energy.

But its approach must be careful not

to undermine Europe’s long-term

green transition goals. Pointing to

investments in electrication, energy

efciency and interconnections as

key priorities, EU competition and

climate chief Teresa Ribera, who

previously served as Spain’s Ecolog-

ical Transition Minister, said: “There

are things that we know we need to

do. The earlier we do them, the more

opportunities we build and the lower

costs we may be facing.”

To protect consumers from fossil

fuelled price peaks, AccelerateEU al-

lows member states to introduce

support schemes, energy vouchers and

social leasing schemes and lower ex-

cise duties on electricity for vulnerable

households. For industrial consumers,

the Commission will separately adopt

updated State aid rules, allowing

member states to support the most

exposed economic sectors.

Crucially, the Commission will

present legislative proposals on net-

work charges and taxation this month

(May), so electricity is taxed less than

gas. In addition, the Commission will

present an Electrication Action Plan

by the summer which will include an

electrication target.

AccelerateEU also urges EU mem-

ber states to implement the European

Grids Package, including addressing

grid connection queues – there are 400

GW of wind energy capacity current-

ly waiting for grid connections.

Solving this is possible: the UK has

halved its queues, from 144.5 GW in

2024 to 73.6 GW now.

Finally, AccelerateEU will help

member states make the most of their

EU funding to decarbonise and

electrify. This includes the €219 bil-

lion Recovery and Resilience Facili-

ty, EU cohesion funds as well as a

new €100 billion Industrial Decar-

bonisation Bank auction.

Ribera stressed that support should

focus on structurally lowering energy

bills, for example by expanding solar

panels, heat pumps and better insula-

tion, rather than relying on emergency

measures that risk distorting market

signals needed for the green transition.

She also warned against market

fragmentation. “We can build on a

common menu of solutions that help

the long-term transformation that we

need so that member states can

choose.”

Eurelectric, the organisation repre-

senting Europe’s electricity sector,

also warned that striking a balance

between short-term xes and long-

term goals will be crucial. In a state-

ment, it said Europe needs to provide

immediate relief to consumers and

industry but at the same time, it needs

to attract investment in clean energy,

grids and exibility if it wants to avoid

future crises.

It said “pushing electrication is the

only way out of the fossil fuel depen-

dency” but stressed that not all of the

Commission’s proposed measures

achieve the objectives of reducing

energy costs and short-term price

volatility, while preserving long-term

investment signals.

It noted that past interventions such

as gas price caps or broad subsidies,

including those implemented in Iberia

in 2022, have shown they can be dis-

tortive to the internal market and de-

liver limited benets to consumers.

Looking across the different compo-

nents of electricity bills, Eurelectric

identies several targeted measures

that can lower costs quickly without

undermining market functioning.

Taxes and levies is the rst area. It

says member states can lower VAT in

electricity, shift scal burdens onto

fossil fuels to incentivise electrica-

tion or exempt vulnerable consumers.

Removing non-energy-related levies

and cross-subsidies would also have a

direct impact.

Network tariffs, it says, should also

be targeted. Here, regulators can in-

centivise consumers to optimise ca-

pacity use and shift demand away from

peak periods.

Carbon costs could also offer imme-

diate support. The European Commis-

sion’s proposed €30 billion ETS

(Emissions Trading Scheme) Invest-

ment Booster (funded by 400 million

EU allowances) could support indus-

trial consumers. A targeted adjustment

of the Market Stability Reserve and

related parameters would help indus-

try while preserving the ETS as a

credible investment signal. More ef-

cient use of ETS revenues (over €43

billion raised last year alone) is also

critical to accelerate decarbonisation

and industrial transformation.

Directly targeting energy costs also

offers short-term ease. State aid tools,

such as the industrial price support

proposed in the Clean Industrial State

Aid Framework (CISAF), alongside

unlocking demand-side exibility, can

bring targeted relief, says Eurelectric.

Beyond these immediate xes, the

organisation says structural solutions

include: scaling up electrication, in-

cluding institutionalising the Industri-

al Decarbonisation Bank pilot auction

with a stronger, dedicated budget;

expanding long-term contracts such as

Power Purchase Agreements (PPAs)

and Contracts for Difference (CfDs)

to stabilise retail prices; and acceler-

ating the deployment of clean,

homegrown electricity generation,

exibility and storage to reduce Eu-

rope’s exposure to fossil fuel price

volatility.

The “homegrown” energy” element

is one that continues to chime strong

under current geopolitical tensions.

Renewables and energy storage pro-

ponents voiced strong support for this

element of the AccelerateEU plan,

especially as war again demonstrates

the fragility of a fossil-dependent

system.

WindEurope said that “with Accel-

erateEU, the Commission is crystal

clear”: any energy price relief mea-

sures must be underpinned by a faster

transition to homegrown renewables

and a more electried economy.

“It’s wake-up call for member states

to nally implement EU permitting

rules. And it specically highlights the

role repowering old wind farms can

play in boosting renewable power

supply,” said the organisation.

“Electrication is a strategic imper-

ative for Europe’s independence, se-

curity, and prosperity. It needs to

happen immediately and at scale. We

must make homegrown electricity the

cheapest option,” said Tinne van der

Straeten, WindEurope CEO. “This

means cutting VAT and taxes on heat

pumps, electric vehicles and other

electrication technologies. It means

addressing the low hanging fruit in

low- and medium temperature heat

processes. AccelerateEU is bold polit-

ical leadership in a time of crisis.”

Philippe Dumas, Secretary General

of EGEC, stated: “The Commission’s

focus on homegrown energy correctly

shines a spotlight on geothermal. It

provides the right attention to massive-

ly deploy geothermal in Europe. Now

it must quickly publish the Geother-

mal Action Plan to fast-track invest-

ments and reduce uncertainty, and save

families, businesses, industries and

farmers from the energy crisis.”

Meanwhile, Energy Storage Europe,

said it is key that energy storage is

being recognised not only as a decar-

bonisation enabler but as a strategic

competitiveness asset in the EU policy

framework.

“The recognition that energy storage

is no longer a side topic to renewables,

but a strategic infrastructure is a far

more powerful investment signal than

a narrow renewables policy,” it said in

a statement.

While the EU has a careful path to

tread in the coming months, that

pathway is clear – and there is no

going back. The drive for homegrown

energy is likely here to stay and it must

be clean.

Fatih Birol, Executive Director of

the International Energy Agency

(IEA), best summed it up in an inter-

view with the Guardian newspaper.

He said a key effect of the US-Israel

war on Iran was that countries would

lose trust in fossil fuels and demand

for them would reduce.

“Their perception of risk and reli-

ability will change. Governments will

review their energy strategies. There

will be a signicant boost to renew-

ables and nuclear power and a further

shift towards a more electried fu-

ture,” he said. “And this will cut into

the main markets for oil.”

Birol said there was no going back

from the crisis: “The vase is broken;

the damage is done – it will be very

difcult to put the pieces back togeth-

er. This will have permanent conse-

quences for the global energy markets

for years to come.”

Fragile: handle with care

Junior Isles

Cartoon by Jem Soar