Europe needs to do more to make its renewable energy supply chain more self-sufficient, the head of French energy company Engie has warned, as huge US subsidies help it move forward in building an independent cleantech industry.
Katherine McGregor, chief executive of the gas distribution company, said she is active in renewable energy in Europe as well as in the US, where Joe Biden’s $369 billion tax credit and stimulus package has “spurred a lot of interest” from the group in using hydrogen. and battery storage projects.
“We have already developed and operated very large renewable energy projects in the US, but we are seeing an acceleration,” McGregor told the Financial Times, adding that “most of” Engie’s 10 gigawatt battery capacity goal by 2030 will be in the USA.
The US scheme should inspire Europe in several ways, McGregor said, including the fact that it rewards not only companies that make goods domestically, but also those that “buy local goods.”
“Europe needs to think about protecting or making their industry prosper,” McGregor said, adding that she would welcome incentives to help more regional suppliers emerge. “From a business standpoint, it’s also a way to reduce my risk by having reliable local suppliers.”
Europe is highly dependent on other markets to supply its renewable energy sector. For example, in the solar industry, the majority of panel production is concentrated in China.
The EU is still working on its policy responses to the IRA and has unveiled proposals that would loosen state aid rules and remove red tape to encourage green technology development in the region.
But the “Purchase of Europe Act”, an idea initially supported by France, does not seem to have found support in all EU member states. The European Commission will present more specific proposals in mid-March.
Under the leadership of McGregor, who took over as CEO in early 2021, Engie this week unveiled a new investment drive focused on renewable energy as well as green molecules – the development of cleaner forms of gas such as biofuels.
It increases spending on new projects to €22–25 billion between 2023 and 2025, up from €15–16 billion compared to the plan for 2021–2023, funded in part by a major eradication program completed from 2021 as the group is restructured and sold. some service companies like Equations.
The group, which emerged from the merger of Gaz de France and Suez in 2008, plans to more than double its renewable energy capacity to 80 GW by 2030. In regions such as Latin America, Asia and Africa.
McGregor said that even without a full IRA response in Europe, and with the EU preparing to discuss how to reform electricity markets this year, the region is still attractive.
“The sheer amount of renewable energy that needs to be developed in Europe is huge,” McGregor said. “You have to be very, very local, you have to go and talk to local authorities and citizens. . . This is a competitive advantage for us.”
However, both Europe and the US will also need to invest heavily in areas like grid infrastructure to support their electrification drive, McGregor said, echoing warnings from other countries. Big power groups like Eon.
Engie has replaced its gas bought from Russia’s Gazprom, which accounted for 17 percent of its supplies before last year’s invasion of Ukraine, with gas from other sources, including Norway.
Europe “comes out of winter in good shape” on the gas front, McGregor said, with encouraging stock levels thanks to favorable weather conditions and solidarity in the region.
She warned that Europe will continue to be subject to possible strain on its power grids in the coming months, including due to drought that could affect hydroelectric power generation.
Engie posted a record €5.2bn net profit for 2022 when it excluded exceptional goods, helped by rising gas prices. His net income was €200 million, including impairment losses, including those related to the mothballed Nord Stream 2 gas pipeline to Russia, of which he was a creditor, and provisions for its Belgian nuclear operations.