What is ENTSO-E?

ENTSO-E, the European Network of Transmission System Operators for Electricity, was founded in December 2008, so it’s a brand-new organisation. We have 20 employees and I’m head of the office but most of the work takes place through cooperation between the experts from our 42 member transmission system operators (TSOs) from 34 countries.

ENTSO-E was founded building on a tradition reaching back to 1951 of cooperating between TSOs. So this cooperation has been going on for a long time already, but it’s taking on an entirely new dimension with the EU’s third energy package which went into effect on 3 September, as in the package there’s a regulation on cross-border electricity trading which describes what ENTSO-E must do.

Some elements of this are dramatically new, especially the 10 year European network development plan and the network codes. These are important tasks, and so we’ve put together ENTSO-E so that there is one entity to organise pan-European cooperation on technical, planning and market-related issues.

Could you explain what the 10 year European network development plan you mentioned is?

It’s going to be the first real European planning effort. What TSOs did in the recent past was to collect information from each TSO – on the continent for example – and put it in one document for an overview of all the things that were being planned – and creating a similar overview will indeed be a part of our 10 year plans.

But all the stakeholders – the wind industry and the TSOs and so on – want to go further than that to find out where power will be generated in Europe and how it will all fit together.

Part of the input will come from the National Renewable Energy Action Plans of each Member State next summer, but this will be combined with market modelling on a European scale to see where generation is likely to be, see how it effects the different types of energy, and then build the grid planning on it and see how it fits together on a European scale.

So it’s an overview of all the European states which allows you to see how best to organise the grid.

Yes – the plans from each Member State will hopefully look into their neighbouring countries, but will necessarily be limited in that respect. And we see it as our task to make sure that these network plans fit together as a whole. So if you’re thinking about offshore wind plans in the Baltic, North or Mediterranean Seas, then that by definition involves several countries and we need to try to make sure that the investments in the grid – the sea cables and onshore lines – make sense from several perspectives. From a market perspective, that it relieves congestion in an optimal way; from a renewables integration perspective, not just transporting the energy to the load centres but us being able to balance it out when it fluctuates, meaning having enough hydro or later on perhaps electric car batteries to balance it out. This whole system aspect is a challenge for us, and we are very curious as to how much additional infrastructure our planning is going to show beyond the national plans collection.

There is a lot of talk about integrating renewables including offshore wind. How realistic and feasible do you think this ramping up of the penetration of offshore wind in the grid is in the 2020 or 2030 timeframe?

It’s a very difficult question. June 2010 will be an important date for us as the NREAPS will be published, giving each country’s plan of how it will meet its 2020 renewables target, and that will reduce the uncertainty.

Grid infrastructure takes a long time to get through the consenting procedures and then to build, so what we’re planning now will be there by 2020 and will hopefully stay there for around 40 years. We do realise that it’s important to look beyond 2020 to get a good picture of the economics of a big infrastructure project, but as we are a new body, we are in the early stages of figuring out how we’re going to develop the grid methodologically.

So once the 10 year plan is ready, will you present it to the European Commission?

Once the third package is fully implemented in March 2011 we will present the plan to the new agency of the European Energy Regulators – ACER – which will be operational by then – and to the European Commission. And we will need to carry out lots of consultation with stakeholders before we present it.

However, we want to be active and operational as ENTSO-E way before that 2011 deadline because the challenges of integrating renewables and completing the internal energy market are not only very big, they are also very urgent, and we want to use these 1.5 years very actively, working with the Commission and regulators to push these issues forward.

We’re hoping we’ll learn a lot through these initial pilots of the ten year plan and by the time we really have to deliver it, after March 2011, we’ll already have a good methodology and a good buy-in from the stakeholders and the politicians, because without that, we won’t be able to implement all the infrastructure we’ve planned.

EWEA has launched its own 20 year network development plan – have you any reactions to it?

I don’t have any reactions yet on the details – there’s an awful lot of investment sketched out there which will cost an awful lot of money, and the regulators of each country and ACER will have to buy into that – so it’s important never to forget the potential regulatory hurdles.

What I CAN say is that we at ENTSO-E like the idea of an offshore grid for a few important reasons. It has the potential to connect different parts of Europe and should have benefits for the market, evening out fluctuations between different regions with different wind regimes. The idea looks good to us but needs to be studied by our members very carefully and they’ve begun to do that.

If you could look ahead to 2050 or even further, how do you see an optimised European grid?

Well, we now have the ten year plan to build, which is already a challenge for us that we’re gearing up to. When you try and look further ahead, the size and siting of the power generation projects is the biggest uncertainty we have to deal with, and those decisions are in principle taken in the market.

We’re hoping that the cost of renewable energy will - as is forecast - come down over the decades and that eventually they will fit into the market as well.

So our grid investment decisions will be driven by the siting and sizing of the generation investments, which need to be made first.

Overall, the market needs to function better and better and we will be working on that, and the clarity of the political goals needs to be there; otherwise we won’t have a good basis for our grid plan.