Emmanuel Brutin, National Grid’s European Affairs Manager, offers his perspective on recent developments on interconnectors at the latest European Council meeting in March.
"The focus by the EU Council on interconnection and the political impetus that it gave is, we believe, a very positive move."
Emmanuel Brutin, National Grid’s European Affairs Manager
Each 1GW of new interconnector capacity could reduce Britain’s wholesale power prices by up to 1-2%.
Source: National Grid
At the March European Council, the 28 EU Heads of State discussed at length the issue of increasing the interconnection of Europe’s energy networks. This interconnection angle was part of broader discussions on the 2030 Climate Change and Energy framework – a key political document that will set the EU’s ambition in terms of greenhouse gas emissions’ reduction and clean energy for a 2030 horizon.
While environmentalists were disappointed by the postponement of an agreement on a 2030 Greenhouse Gas Target to October, the push for more interconnections and greater security of supply were arguably the most significant outcomes of this Heads of States’ meeting.
This focus on interconnection and the political impetus that it gave is, I believe, a very positive move. It’s essential that national and EU policy-makers fully recognise that energy transmission infrastructure plays a key role in defining a successful energy policy – one that allows a transition towards secure and clean energy at reasonable costs.
This specific push on interconnection is quite clear when reading the Council conclusions.
Firstly, the EU Heads of State recalled the importance of “achieving interconnection of at least 10 % of their installed electricity production capacity for all Member States”. Secondly, the Council has invited the Commission to propose, by June, specific interconnection objectives to be reached until 2030 “with a view to taking a decision at the latest by October 2014”.
This is a significant step forward. It’s a true recognition by EU leaders that the ambition of the block of 28 nations on climate change at a 2030 horizon are inextricably linked with the development of a truly interconnected pan-European network.
This led Commission President Barroso to declare right after the meeting that “this logic of interconnection – that the European Commission fought for… is now fully recognized … And that, I think, was one of the new facts in today’s discussions”.
Interconnection infrastructure at the heart of Europe’s low carbon ambitions
Increasing Europe-wide interconnection would bring great benefits to European consumers. In the UK, analysis by National Grid has estimated that each 1GW of new interconnector capacity could reduce Britain’s wholesale power prices by up to 1-2%. In total, 4-5GW of new links built to mainland Europe could unlock up to £1 billion worth of benefits to energy consumers per year, equating to nearly £3 million per day by 2020.
Similarly, interconnectors are essential to increase security of supply. It’s no coincidence that the Council’s focus on interconnection happened in conjunction with recent events in Ukraine. Member States in Eastern Europe are heavily dependent on Russian gas and the continent has already experienced past shortages of Russian gas supply. One of the ways to achieve security of energy supply is to reinforce the interconnections between European countries. In the same spirit, EU leaders also asked the Commission to develop a “comprehensive plan for the reduction of EU energy dependence”.
A greater degree of interconnection also supports diversification of the energy mix and integration of low-carbon technologies. As electricity from renewable sources forms an increasing part of the energy mix, interconnection is an important tool in managing the variable nature of renewable energy, allowing countries such as the UK to import electricity from hydropower in Norway, wind power in Ireland and Denmark, nuclear in France, and hydropower/geothermal energy in Iceland.
But it’s not an easy matter to build interconnectors between countries. Many of the technical challenges can be overcome through the development of pan-European network codes that set out the rules and requirements for interconnection. National Grid is closely involved in the developments of these codes, through the European Network of Transmission System Operators for Electricity (ENTSO-E).
An equally challenging development is the coordination of investment on both sides of an interconnection and ensuring that consenting regimes facilitate rather than hinder the interconnection.
Last but not least, different regulatory regimes across Europe may also act as a blocker to investments. In this respect, it is important that significant progress is made by energy regulatory authorities across Europe to develop new and innovative regulatory design.
Another significant challenge is overcoming public opposition. Securing acceptance of investment in the new infrastructure required to integrate low-carbon technologies is an issue that not only affects the UK but other European countries as well – an obvious example being in Germany, where delays in the building of the grid are putting the overall Energiewende at risk.
On top of our work in the UK, National Grid also discusses best practices on stakeholder engagement at a European level through the Renewable Grid Initiative (RGI) – a group that brings together both energy transmission companies and pan-European NGOs such as WWF or RSPB. We are also a partner in the EU-financed BESTGRID project, which aims to increase local public acceptance for grids Europe-wide by applying best practices in participation and transparency.
From this perspective, the March European Council will hopefully pave the way to build a true European narrative around the need for energy investments – one that not only recognises the need to move towards a low-carbon economy but also stresses the broader benefits of achieving a truly interconnected European energy market, particularly in terms of energy prices and security of supply.