Client: University of Cambridge Institute for Sustainability Leadership
Duration: October 2018-March 2019
The Prince of Wales’s Corporate Leaders Group (convened by the University of Cambridge Institute for Sustainability Leadership) contracted MRI as the leading party of a consortium to produce a conversation paper on the energy transition in Central and Eastern Europe (CEE). This relatively short, business oriented document sought to highlight the main aspects of energy transition and called attention to the business opportunities it offers. The paper covered three interrelated topics: the transition in energy generation, the energy efficient interventions in the building stock and finally the transition trends in urban mobility. MRI cooperated with Energiaklub, Mobilissimus ltd as companies, and Ada Ámon from E3G as a private consultant to cover all aspects.
The paper emphasized both the similarities among the Central and Eastern European countries (11 new member states of the EU according to the interpretation of the study except for Malta and Cyprus) rooted in the socialist past, the relatively lower level of economic productivity and such factors as high homeownership rates, lower level of energy awareness, and high price sensitivity. It also showcased the growing differences, with a few front runner countries in building renovations and mobility solutions (e.g. Czech Republic), some with well advanced digital solutions (e.g. Estonia), and others suffering from particular difficulties, such as high level of pollution and the related coal mining problems (e.g. Poland).
The study demonstrated that the existing high potential of the region regarding renewables is far more than the currently exploited capacities. This gap is the result of political considerations (being reluctant to upset the status quo) and the high public investment needs. Furthermore, there is great potential in the energy efficiency renovation of the building stock, especially that the mass construction of industrialised buildings allows the development of standardised renovation solutions. Finally, while CEE countries are more used to environmental friendly mobility modes (public transport accounts for a considerable share of all journeys even today), the lower purchasing power can be a barrier to effective energy transition in the mobility sector, as it slows down the uptake rate of electric vehicles.
In spite of these difficulties, the CEE region has a high growth potential regarding the energy efficient investments. However the spread of a reliable and stable regulatory environment will be crucial in all CEE countries in order to allow businesses to operate and make use of the high market potential.