In a spirited speech delivered at the Eurelectric Conference in Brussels, Oettinger said he was convinced that much improved market integration is the only way Europe can reach its overarching policy objectives.
“We will never be able to deliver our ambitious energy efficiency or greenhouse gas emission targets without fully utilising the opportunities that large and integrated markets offer,” Oettinger said. “Equally, we would not be able to reap the full benefits of liberalised markets, if competition was only to happen within national borders.”
He said market integration can only be brought about, however, if EU markets are properly interconnected and existing obstacles to market participants are removed.
“We are not there yet,” Oettinger said. “Our electricity highway is plagued by persistent bottlenecks and the congestions are not optimally dealt with.”
He said transmission system operators will bear the critical task of building the infrastructure needed to integrate large scale wind energy with both the networks and the markets.
Describing this task as a huge challenge, he said it is vitally important that Europe guards against the risk that vertically integrated companies fail to invest in their networks or in interconnections with other systems.
Leading renewable energy companies expressed their enthusiasm for a pan-European power grid in Brussels on 23 March at the launch of ‘Friends of the Supergrid’, a group of European companies that will have a key role in designing and building the technology and physical equipment used for the upgraded and extended power network. This should help ensure a smooth and efficient supply chain – another factor cited as crucial by Oettinger in his speech.
“We require a European mechanism to allow us that we produce our energy in the most efficient way and we can be sure that valuable wind energy is not stuck at a border, or worse never produced, because we have not foreseen cables to carry it.”
As a result, Oettinger reminded the audience, a European Agency for Cooperation of Energy Regulators is being established to deal with the many challenges of regulating the EU’s energy market.
While saying that the objective of a European-wide, single market in electricity is now within reach, he added the markets must be convinced of the benefits of integration.
“To facilitate that, the [European] Commission has initiated a market design project with the view to delivering a roadmap of a truly integrated pan-European market by 2015.”
Oettinger said Europe’s “2020” targets will soon challenge the capacity of networks to carry large amounts of offshore wind power. The networks will also have to allow customers to generate their own energy, thus making the grid the centre of the entire electricity system.
“This new system will encourage energy efficiency, and facilitate the integration of distributed and renewable generation of wind farm, and all time allowing ever greater market participation by consumers.”
He warned, however, that in the next 20 years an estimated hundreds of billions of Euros will have to be spent on the EU’s aging electricity network and that some public funding might be necessary.
He said the Commission is looking at ways to improve regulatory coordination and cooperation across borders and later this year will be presenting ideas on harmonising investment rules in the EU and attracting private financing.
“Our policy choices now, will have long-lasting implications of our low-carbon, high efficiency energy system sought for 2050,” he said, adding a truly integrated, pan-European electricity market is indispensable for competitive, secure and sustainable energy supplies.
The European Wind Energy Association (EWEA) believes that the growing political movement for a future highly-efficient supergrid received fresh momentum with Oettinger’s comments.
As an organisation that has long lobbied for an upgraded and extended grid, as well as a properly functioning market in electricity EWEA thinks Oettinger’s comments were timely and refreshingly candid. A good start for the new Commissioner!
Indeed, the subtext to his speech could have been: despite some obstacles, it’s clear what Europe needs to do. EWEA heartily concurs.
By Chris Rose, EWEA, www.ewea.org