Let’s stop wasting energy: a single market is needed now

» By | Published 01 Mar 2011

I want you to imagine for a minute you are walking on top of a cliff overlooking the North Sea. The wind is so strong you can lean your whole body into it. Below, almighty waves, swept up in the gale, are crashing onto the rocks.

Now imagine you are in Spain, or perhaps Italy or Portugal. The sun is soaking into your skin.  The sky dazzles with the intense southern light that bounces glaringly off buildings and cars.

With such immense renewable sources of power to hand, it seems incredible that Europe is still having to fork out for fossil fuel imports. It is as though a farmer with a huge and fertile orchard were forced to pay an unreliable neighbour for fruit while his own rot in his back garden.

The analogy is of course not quite accurate – Europe is developing its renewables and fast, with wind leading the field for new power installations in 2008 and 2009. But without a single market and a Europe-wide network allowing energy from our abundant winds, plentiful sunshine and powerful waters to be traded and transported to wherever it is needed, we will remain dependent on polluting and expensive fuel imports from outside.

In 1986 – which is now a whole generation ago – political leaders signed a visionary piece of legislation opening Europe up to the free movement of goods, service, people and capital.

It is now time for the European Union’s current policy makers to be just as courageous and add a fifth freedom: the free movement of electricity throughout the EU.

In order to do this, the necessary grid infrastructure needs to be financed and built rapidly, and market rules applied. For the grids this means extending and upgrading Europe’s electricity network, ensuring better interconnections between different regions and countries, and linking in offshore wind farms as part of the network.

Renewables or no renewables, Europe’s grid infrastructure is past its prime – as the EU grid operators’ body, ENTSO-E, has pointed out – and needs to be modernised and strengthened.

The power system must also become more flexible, with improved demand-side management –for example, smart meters and decentralised power storage options in consumers’ homes.

Intra-day market trading – when power can be traded under one day ahead – and shorter “gate closure times”– that is, the amount of time for which the producer has to forecast his power output in order to bid on the market – will also allow renewable energy output to be predicted more accurately and balanced more effectively.

Moreover, the technical requirements for putting energy on to the grid (known as “grid codes”) should be harmonised across Europe so they become more comprehensive and understandable for manufacturers.

Doing all this will allow the full potential of our domestic renewable energy sources to be tapped, lessening and eventually eliminating the need to import fuel, avoiding the carbon that fuel would have emitted, creating jobs in a world-class European industry and bringing down power prices for the consumer as the single market chooses.

There are encouraging signs that politicians do understand the need for action – in November 2010, the European Commission proposed a blueprint for an integrated European energy network.

In its communication, the Commission said a reliable internal energy market — with an updated grid system and shared market rules — would promote enhanced security of supply, the integration of renewable energy sources and increased energy efficiency.

The Commission plan says about €1 trillion must be invested in Europe’s energy system by 2020 to meet energy policy objectives and climate goals. About half of that will be required for networks, including electricity and gas distribution and transmission, storage and smart grids, the plan said. The paln adds that approximately €200 billion are needed for energy transmission networks alone.

And at the recent EU Energy Summit in Brussels, EU Heads of State agreed that the single energy market should be in place by 2014. The next step towards that goal should come with the list the European Commission is to provide by June of EU priority grid infrastructure projects and the financial assistance necessary. It is to be hoped that the Commission’s list will be comprehensive, far-sighted and ambitious: we still have a way to go to have a truly single energy market, but we need to be there in just three years.

We have been wasting our own – renewable – energy for years by not putting in place the conditions that will allow it to be tapped. EU leaders should not waste any more time or energy now but get on and implement the missing single market that will benefit all of Europe.

This article was first published in Utility Week: www.utilityweek.co.uk