Unlocking industrial flexibility: Agora identifies solutions to long-standing regulatory challenge
Agora Industry’s new report addresses a key challenge in Germany’s energy transition: how to unlock industry’s considerable potential for flexible electricity use by reforming the country’s long-standing grid fee rules. The authors examined how the existing regulatory regime incentivizes constant high electricity use by energy-intensive industries. This has been a subject of intense debate, as this framework serves as a crucial support mechanism for energy-intensive industries by subsidizing electricity prices through reduced grid fees. However, it also hinders companies from adjusting their power consumption based on the availability of electricity from renewable sources.
The paper, produced with Agora Energiewende, proposes ways to modify the rules without placing an undue burden on companies. It finds that all companies have the capability to reduce their electricity consumption by about 20 percent for up to four hours when generation from wind and solar is down and also to increase consumption when renewable generation goes up. Rules that facilitate this would smooth extreme fluctuations in renewables-heavy grids and improve network efficiency for all consumers.Developed with Fraunhofer FIT and the Regulatory Assistance Project (RAP), the study involved industry stakeholders and grid operators. A webinar to launch the report and discuss the proposals with industry representatives drew over 200 stakeholders.
In Guangzhou, China, street redesigns center sustainable mobility
The southern Chinese city of Guangzhou is home to over 18 million people and is one of the country’s fastest-growing cities. However, this growth has also caused increased traffic congestion, worsening air quality, and rising emissions from private vehicles.
In recent years, ITDP China has worked with the city on several sustainable public transport projects, from the renowned Guangzhou BRT to the city’s Complete Street Design Manual. In the past month, the city has also debuted the results of pilot projects for street redesigns in high-traffic areas, drawing on ITDP’s recommendations. New protected and separate lanes for cycling and buses have helped ease congestion, and early results are showing promising improvements for road safety and air quality in the pilot areas.
ITDP is monitoring the performance of the pilots with the city and, following the assessment period, the projects will move to a second phase for permanent implementation. Initial positive feedback from cyclists, pedestrians, and public transport users also provides evidence for scalability of these interventions citywide.
The shift to electric vehicles (EVs) continues to gain momentum, increasing the demand for batteries. This boom presents an opportunity for the U.S. to develop and strengthen its battery supply chain while creating tens of thousands of jobs across the battery production process. In a new working paper published in January, ICCT researchers project that the growing U.S. battery industry will create 84,000 to 125,000 domestic jobs by 2032. There is also potential to create even more jobs through increased domestic production of battery cell components and recycling to match the EV battery pack demand. The ICCT’s analysis makes the following conclusions:
- The EV transition will increase demand for batteries, but announced capacity to produce batteries might grow even faster.
- Battery pack production could require around 95 workers per gigawatt hour, while battery cell component production and recycling could employ another 49 workers per gigawatt hour.
- The potential exists to create even more jobs through increased domestic production of battery cell components and recycling to meet the demand for EV batteries. There are additional opportunities in construction and upstream supply chains—such as mining, material extraction, and refining—and induced jobs in communities where batteries are made.
- Continuing federal and automaker support could help attract, retain, and retrain skilled workers for the new battery manufacturing roles.
Japan phases out fluorescents, in step with global shift to LEDs
Japan’s government is moving to halt the manufacture, import, and export of fluorescent lamps by the end of 2027. This marks Japan’s transition to LED lighting, per the global commitment reached under the Minamata Convention on Mercury, supported by CLASP’s Clean Lighting Campaign.
The Minamata Convention was adopted in 2013 to “Make Mercury History” as a response to the historic activism in Minamata, Japan—a coastal community that suffered decades of devastating mercury poisoning through wastewater. Japan’s decisive step turns a painful legacy into meaningful climate action. It’s also a major win for global climate progress, given the country’s strong fluorescent lighting industry, which had previously resisted the phaseout due to its global manufacturing presence. The global transition will avoid 2.9 gigatons of CO2e emissions through 2050, with Japan accounting for 92 million tons.
Fluorescent lighting contains mercury, a dangerous neurotoxin. Shifting to LEDs doesn’t just cut emissions and reduce energy demand—it also eliminates health risks associated with mercury exposure, especially for workers and pregnant people. Japan’s leadership in this transition sets an important example for other nations to follow in the drive for cleaner, more efficient lighting worldwide.
GBPN to support Kerala’s decarbonization efforts
Under a new agreement with state authorities, GBPN will provide technical advisory support to the state of Kerala in India to advance sustainable urban development in its upcoming Kerala Urban Policy. GBPN will support key initiatives including:
- Digitalize to decarbonize: Assisting in the development, implementation, and refinement of an automated platform for energy conservation building codes. The platform will also help EMC enlist energy experts, making it easier for builders to access professionals to design compliant buildings, strengthening compliance and market adoption.
- Health-climate nexus: Promoting healthy building guidelines with a focus on sustainability and energy efficiency, and embedding those guidelines into state-level frameworks.
- Net-zero roadmaps for local bodies: Collaborating with state authorities to design a decarbonization roadmap template for Kerala’s cities and strengthening capacity at urban and rural levels.
The Urban Policy is a significant step toward reducing carbon emissions in Kerala. By 2030, the state could avoid up to 57 million tons of CO2e emissions from residential buildings and 23 million tons of CO2e from commercial buildings.
At the presentation of the Memorandum of Understanding, from left to right: Gautam Nagar, India Country Manager, GBPN; Dr. Sunita Purushottam, Board Chair, GBPN; B.V. Subhash Babu, Registrar, Indonesia’s Energy Management Center; and Aafsha Kansal, India Project Manager, GBPN.
RAP research helps advance heat pump policies in Europe
In late 2024, Regulatory Assistance Project (RAP) published one of the first independent studies on hybrid heating for residential buildings in Europe, reporting that using stand-alone heat pumps and improving building efficiency and flexibility would lower costs and emissions even more than the combination of air-to-water heat pumps with gas boilers. RAP worked with the European Commission and national governments to produce this study, which was well received by policymakers.
In Poland, RAP also worked with the European Clean Air Centre to develop a technical report (link in Polish) to grow policymakers’ awareness about how household flexibility and dynamic tariffs, when implemented effectively, can vastly increase heat pump adoption. Collaborators presented findings and held extensive discussions with Poland’s Ministry of Climate and Environment, Ministry of Development and Technology, and Energy Regulatory Office. RAP is supporting Poland’s active transition to smarter, more flexible energy systems by directly engaging and educating policymakers and regulators.
Agora Energiewende proposes new instrument to fast-track Europe’s heating transition
As Europe decarbonizes its power system, electrifying end-use sectors becomes key to eliminating harmful emissions. Clean heat appliances, such as heat pumps, are a critical tool to cut building emissions. A new Agora analysis finds, however, that heat pump sales have fallen to 2021 levels and, without new policies, Europe may end up installing as many as 50 million fossil gas boilers by 2040. This puts the EU’s climate and energy security goals at risk and could undermine the bloc’s cleantech leadership.
Inspired by the U.K.’s Clean Heat Market Mechanism and work done by RAP on Clean Heat Standards, Agora has proposed a new EU Clean Heat Market Instrument to incentivize manufacturers to increase the share of clean heating appliances and improve accessibility for consumers. The instrument would complement policies like the upcoming EU-wide carbon price for heating and transport fuels. By helping to meet the expected demand for clean heating appliances, it would reduce reliance on fossil gas, cut emissions, and help keep the carbon price in check.
The paper was presented at a hybrid event attracting more than 150 participants and covered by EU-focused media. The proposal also informed a position paper of Renew Europe—one of the political groups in the European Parliament—ahead of a much-anticipated EU Clean Industrial Deal.
