The Energy Transition Readiness Index (ETRI) 2022 was compiled by the Association for Renewable Energy and Clean Technology (REA) and supported by Eaton and Eversheds Sutherland. The report assesses and compares the readiness for the energy transition of the electricity markets of 13 European countries.

Germany and the United Kingdom as well as Ireland, Italy, Poland, Spain and Switzerland received a 3 in the progress ranking, the lowest score in this year's report. Due to the fact that other countries have improved more strongly while Germany has tended to stagnate, Germany also occupies last place in the overall ranking. With a progress ranking of 5, Finland performs best in the ETRI 2022, while Denmark, Norway and Sweden were rated 4. France and the Netherlands also received this rating.

The ETRI's recommendations for action include:

• Quantify and plan future flexibility needs
• Prioritize and accelerate reforms of the flexibility market
• Urgent removal of current barriers to investment

A recent European industry study suggests that the use of demand-side flexibility resources could lead to annual cost savings of up to €300 per customer in 2030, as well as annual greenhouse gas emissions savings of 37.5 million tons. A similar study in the UK found that annual savings of up to £600 per customer could be achieved by 2050.

All countries are very ambitious in achieving their climate targets, but the countries at the top of the ranking have flexibility markets that enable fair, transparent and easy access, while the countries at the bottom of the ranking struggle with investment barriers such as delays in grid access and unfavorable flexibility markets. These barriers need to be urgently addressed if the benefits are to be realized. Many countries face a huge flexibility challenge and swift action is needed to achieve the energy transition goals.

Dirk Kaisers, EMEA Distributed Energy Segment Leader at Eaton, comments: "As a global energy management company, we are seeing businesses around the world accelerate the pace towards net zero emissions, spurred on by the energy crisis to explore technologies such as renewable energy generation, energy storage systems and the energy flexibility benefits of charging infrastructure. Governments need to match the burgeoning enthusiasm of businesses with policies to create fair, transparent and accessible markets that secure private investment in the energy transition. As the ETRI report shows, the Nordic countries are leading the way. Other countries, including Germany, need to catch up."

Dr. Nina Skorupska CBE, Chief Executive of the Association for Renewable Energy and Clean Technology (REA), says: "As ETRI 2022 makes clear, despite impressive progress in countries like Finland, the warm words of many governments in Europe are not matched by action when it comes to preparing for the energy transition. We need clear action now to remove the barriers facing our industry: proper long-term planning, prioritization and acceleration of market reforms, and urgent removal of current barriers to investment - all of which are urgently needed to put us on the right track. I do not underestimate the challenge ahead, but the cost of nations moving too slowly in preparing for the energy transition is simply too high. We are in the midst of a severe energy crisis, but governments will face even bigger problems in the future if they don't act now. "

Werner Brickwedde, Partner and Head of M&A at Eversheds Sutherland, explains: "Germany has made really good progress in the field of renewable energies and has even taken on a pioneering role in some areas. This path must now be pursued consistently in order to achieve the self-imposed target of covering at least 80 percent of gross electricity consumption from renewable energies by 2030. Their share must therefore almost double within less than ten years. However, this also requires major investments in flexible renewable energies - also to ensure energy security and simply to make energy more affordable for consumers. In order for such investments to be made, we need a faster introduction and implementation of regulatory frameworks that promote access to flexible energy. Implementing the recommendations set out in this index could make a difference.