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Electricity Interconnections in Europe. SUSANNE NIES IFRI ENERGY PROGRAMME Présentation Ifri Brussels July 6th 2009. The Publication. Susanne Nies, At the Speed of Light? Electricity Interconnections for Europe. 218 p., Ifri energy programme series, Forthcoming : september 2009.
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Electricity Interconnections in Europe SUSANNE NIES IFRI ENERGY PROGRAMME Présentation Ifri Brussels July 6th 2009
The Publication Susanne Nies, At the Speed of Light? Electricity Interconnections for Europe. 218 p.,Ifri energy programme series, Forthcoming : september 2009
The Problematics Objective of the report (and this presentation): State of the Art and governance of interconnections in Europe Why Interconnections? • Solidarity • Market Efficiency -improved quality of electricity -European norms • Generation substitution
Scheme: Actors at interconnection ERGEG / ACER CRE CNE Joint Venture (RTE / EER) Bidding Capacities Generation Generation Generation EER EER RTE ENTSO-E Input Regulation Interconnection Input Regulation Interconnection BORDER Country A (France) Country B (Spain)
A complex governance Changes with the Third Package Regulators TSO Regional and European organisations The role of the Commission, DG TREN, DG EN A very fragmented and unclear external policy (like Eastern Partnership, Russia Relation (with PCA and bilateralism), UPM, Energy Charter and Medvedev Proposal etc.) Third Package: ERGEG, ETSO to ACER, ENTSO-E/G
ERGEG becomes ACER • ERGEG: Group of European Gas and Electricity Regulators, • ACER: Agency for the Cooperation of Energy Regulators • By 2011
Price, governance, and the efficient use of existing capacities • Physical capacity (N-1), commercial capacity • Allocation of commercial capacity • Which pricing mecanisms? • Market coupling • Stock Markets • Today important dysfunctionning, see CRE Reports; opacity especially TSO (see also Commission June 2009 on market imperfection in 25 markets…)
France-Spain, HVDC undergrounding • More than 15 years of debate • Decision on HVDC undergrounding in 2008 • European Coordinator Mario Monti • Combined partly with train tunnel
EU and external: Limits of synchronisation?Direct or alternating (DC, AC) • Facts about AC/DC: UK, Scandinavia 2 major projects: • EU-Mediterranean Ring (UCTE) • UCTE-IPS/UPS Risk if AC: blackouts, need of intense political coordination, common governance • Very politicized question of AC or DC • Open question: limits of synchronisation? • Case Turkey: the political non-correct, but economically reasonable idea of integration just Istanbul area
ICT 2020 and perspectives • CERA Report cited by FT April 24th 2009 • « The energy efficiency of the EU will be unprecedented, but not reached, as the 20.20.20 objectives states, by 2020. In 2030, the gas and electricity consumption will come back to 1990 levels » (Doug HOWE CERA) • This puts into question supplementary infrastructure projects. In electricity requirement of « project by project decision »
Assessment Assessment • Interconnections often a political decision • AC/DC: link with neighbours; the synchronisation question • Electrification and development: a European duty • Energy efficiency, energy dependency, the need for innovation • Towards a different electricity model, different grid: when? • The governance prime challenge • Financing the change: the asset of the current crisis (Roosevelt electrification of the country side as an example)
Policy Recommandations Governance: more transparency, especially commercial capacities, TSO Improve efficiency of current Interconnection use, new projects on a case-by-case basis Simplification of governance: reduce number of actors, for example merger the 4 German TSO; clear division of assignments for ACER and ENTSO-E Pricing: single tariff for EU electricity transmission (Czech presidency proposal) Synchronisation: DC links as a first solution, « marketing » of DC has to be done Open question: The grid of the future? ReEnewable (Desertec) and when?