Energy in Transition

Extreme weather events and rising temperatures make it clear: climate change is here. While challenges are increasing, the transformation of the energy supply continues steadily – new technologies, massive investments, and a shift in politics and business demonstrate change. The path to decarbonisation remains a balancing act between security of supply, economic viability, and sustainability – but progress is being made. What this means and Axpo's role in it is explained by Philipp Näf, Head of Group Sustainability, in an interview.

In recent years, we have seen record temperatures and numerous extreme weather events. Is it too late to slow down climate change?

It is definitely not a positive development when you look at global temperature records and the frequency of natural events. Curbing climate change and achieving decarbonisation remain enormous challenges – particularly in the context of global population growth and rising prosperity. However, we should also acknowledge the positive developments. Looking back over the past 25 years, we can see that a great deal has already been achieved.

Where exactly can we see progress? 

For example, in the expansion of renewable energy sources. The share of renewables in the electricity mix is now significantly higher than we had anticipated in 2000. In the EU, solar and wind already account for almost 30% of electricity production, and with additional renewable sources, we are currently at 45% – compared to just 15% in 2000. Progress is also being made in other parts of the world. China, for instance, is still building new coal-fired power plants to meet its rising electricity demand. However, in 2023 alone, the country installed 340 GW of wind and solar power – twice as much as the rest of the world combined. The trend is moving in the right direction, offering hope for the future and playing a crucial role for Axpo. The expansion of renewable energy sources is a key pillar of our strategy. Each year, we primarily increase our wind and solar capacities. Last year alone, we added over 300 MW.

Source: EU Electricity Trends (European Electricity Review)

Are technological innovations also crucial to this progress?

Absolutely. Technological innovations play a key role, not only in the development of new technologies but also in their further advancement, scalability, and cost reduction. One major example is energy storage. Battery storage, for instance, has become a hot topic due to drastically falling costs, opening up new opportunities. Over the past decade, battery storage costs have dropped by over 80%. Consequently, Axpo has expanded its activities in this sector. Last year, we commissioned a 20 MW facility in Landskrona, Sweden. More projects of this kind are underway.

Public discussions often revolve around technologies like wind power or new nuclear power plants. In your opinion, which technology is the most sustainable?

Sustainability has many dimensions, so this question is not easy to answer. What I do notice, however, is that public debates often focus on the negative aspects of each technology. For instance, wind power is criticised for its impact on landscapes, while nuclear power raises concerns about fuel sources and waste disposal. From a sustainability perspective, every technology has its advantages and disadvantages, making it easy to criticise them. The discussion is often reduced to CO2 emissions, but there are other relevant factors as well.

Which factors are these?

For example, the impact on biodiversity, resource usage, air pollution, or working conditions in supply chains. While decarbonisation is a central challenge, we must be cautious not to fall into the so-called "carbon tunnel vision" by focusing solely on CO2. Determining the "most sustainable" technology depends on the criteria used. If we compare global mortality rates and CO2 emissions across the lifecycle of different technologies, we see that wind, solar, and particularly nuclear power perform well. 

Source: Safe Sources of Energy (Our World in Data)

And there are many more ways to evaluate "sustainability"?

Yes, there are various approaches. One method is the "ecological scarcity method," which considers a broad range of environmental impacts and summarises them in a single metric, known as environmental impact points. Life cycle assessments quantify and weigh the effects of emissions, resource usage, and waste. With this perspective, hydropower ranks highest, whereas nuclear power scores significantly lower. Of course, all these methods provide only an approximation – in reality, local conditions play a crucial role. And, as with any study or statistic, the question always arises as to which data sources are considered and how system boundaries are defined. Ultimately, the "most sustainable" technology depends on the specific perspective and evaluation criteria.

Source: Environmental Balance Electricity Mix Switzerland 2018 (BAFU)

The EU recently classified gas and nuclear power as green. What is behind this decision? 

The EU taxonomy is a good example of how complex topics are simplified in public discourse, leading to potential misinterpretations. The taxonomy provides a framework to classify "sustainable" economic activities within the EU. Its aim is to guide investors and incentivise investments in the transformation of the economy. However, economic activities must meet strict criteria. In this context, the EU Commission has decided to classify investments in gas and nuclear power activities as transitional under specific conditions. These conditions include low emissions limits, stringent safety regulations, and additional environmental requirements. The decision has been heavily criticised by various interest groups and has sparked months of debate.

Would you personally describe gas and nuclear as "green"? 

No, I wouldn’t. Such a broad classification would be too simplistic and would overlook important limitations. Gas and nuclear can only be classified as sustainable economic activities in a specific context and under defined conditions. This is an important point to consider in discussions about "green claims" or sustainability claims. We need to be more precise and cautious with our terminology and formulations.

How do we reach our goals? What are the next steps? 

The so-called Energy Trilemma makes it clear: it is not only about decarbonisation but also about ensuring energy security and affordability. We need to engage in a societal discourse to strike a balance between these sometimes conflicting interests. Trade-offs will always exist, but the key is to move forward. The focus should be on finding solutions rather than dwelling on the negative aspects.

What gives you hope despite these challenges? 

There are actually many reasons to be optimistic. As a society, we have already achieved a great deal and witnessed incredible progress. I often encourage people to think back 25 years: there were the first Nokia phones, no euro currency, and Google was still operating from a garage. I am confident that we will achieve even more in the next 25 years – new technologies, innovation, and the rapid pace of change give me hope. "Doomism," the idea that everything is lost, helps no one.

Do you also feel this belief in progress at Axpo? 

Absolutely! At Axpo, we believe in the energy transition and are actively contributing to its success. We are investing specifically in innovative energy solutions – whether in battery storage, hydrogen, or large-scale expansion of renewable energies. At the same time, we rely on smart digital solutions to make our grids more efficient and resilient. We also support our customers with sustainable energy solutions to help them decarbonise. With our net-zero ambition, we aim to reduce our own emissions to zero by 2040 and decarbonise the entire value chain by 2050. This shows that we are not just facing challenges but also have the opportunity to actively shape the future – and that is exactly what we are doing.