Translation, Gwendolyn Albert
A conference on “Guaranteeing energy security of the EU Member States within the framework of the common electricity market” took place on Friday 30.1.2009 in Ostrava. It was attended by, among others, Czech PM and President of the Council of the EU Mirek Topolánek, members of the Czech, Polish and Swedish governments, and EU Commissioner for Energy Andris Piebalgs. Among the other speakers and those in attendance there were, in addition to Member State delegations, the representatives of large energy companies (ČEZ, E.ON), operators of power generation facilities, traders on the energy markets, and other experts from the energy field. As could be predicted by the list of those in attendance, the conference was conducted in a spirit of harmony and concurring opinions. The atmosphere was set by the recent “natural gas crisis”, and the participants spoke of the urgent need for energy independence, diversification, interconnection of all European regions, and of sufficient capacity to be able to avoid or effectively face similar crises in future. Even though the topic of the conference was the common electricity market, two of its conclusions concerned the post-crisis situation and natural gas supplies, namely: “Guaranteeing electricity supplies is also conditioned on the availability of primary energy resources on the territory of the Member States. It is necessary to increase strategic reserves of other fuels such as oil and to reduce short-term dependency on fluctuations in imports, e.g., natural gas.”
One of the most important conclusions of the conference was “To leave all options open. No technology for the production of electrical energy can be discriminated against if it meets the requirements for safety and environmental protection, and the energy mix is and will remain in the competency of the Member States.” Expressing openness to all resources as options particularly includes openness to nuclear energy. Czech PM Mirek Topolánek expressed this openly pro-nuclear stance immediately in his opening speech, when he said that if “we want to have sustainable energy with low emissions? We cannot get along without nuclear.” EU Commissioner for Energy Andris Piebalgs expressed his support for nuclear, emphasizing that it is not the solution to everything, but that it must remain part of the energy mix. However, he also noted that no construction of new nuclear power sources seems to be on the horizon and rhetorically asked why that was.
Alan Svoboda of ČEZ gave the answer to that question. In his presentation he emphasized the need for stable, predictable conditions in legislation. He called for a rethinking of support for renewable resources, saying the price of renewable electricity should reflect its increased costs to the transmission systems, and he also outlined the problems of prioritizing renewable resources for entry into the distribution network. He then said the legislative support packages should target not only renewable resources, but also resources such as coal or nuclear in areas with low availability of electricity. State tenders to guarantee supplies could thus compensate for the economic non-sustainability of the nuclear model.
Ralph Guldner of E.ON expressed support for changing the conditions for nuclear, particularly during the public debate. He emphasized that 15 of the 27 Member States already have nuclear resources. The social acceptability of nuclear energy still needs to be changed, even though Eurobarometer reports that 50 % of the EU 25 “somewhat agreed” or “definitely agreed” with the statement that nuclear energy results in lower, more stable electricity prices. According to E.ON, nuclear energy is also cheaper than coal or natural gas at a cost of 20 € / tCO2. The challenge for the EU will be the next five to 10 years, when the new energy portfolio will be created. Due to the expiration of current resources, it will be necessary to change more than 50 % of the capacity currently installed by 2030. Nuclear can play a very important role during these changes, as it combines security of supply, environmental sustainability and competitiveness. E.ON is active in these changes and is concentrating its activity in Finland, Germany, Great Britain and Sweden. E.ON’s corporate aim is to reduce its own emissions by 50 % by 2030 (in comparison with 1990 levels) through the use of nuclear, carbon capture storage, natural gas and renewable resources. The following conclusion from the conference is crucial to E.ON’s investment forecast: “A stable business environment in the energy sector is a necessary condition for the massive investment into production resources that will be needed in the coming years. Investment decisions influence electrical energy situations for decades to come.”
Another block of the conference concentrated on the issue of transmission systems. According to Klaus Kleinkort of RWE TSO, transport system operators face several problems today: The increasing share of wind energy on the market, in particular off-shore in Germany, is causing disequilibrium in the networks. Also, compared to the past, the average distance between an energy source and a consumer has increased. Therefore, if Europe wants more renewable resources, it needs to invest into transmissions networks. Kleinkort also sketched another conclusion of the conference: “Massive development of renewable resources, especially wind energy, depends on adequate development of the transmission infrastructure. Without new infrastructure, the security of the electricity system’s operation will be at risk.”
Vladimír Tošovský of ČEPS came to a similar conclusion. Network operators have an obligation to provide reliable supplies and need sufficient network capacity, but construction of new lines is very difficult, sometimes taking 20 years between the time a proposal is made and its implementation, and operators encounter many obstacles in terms of administration, environmental protection, non-governmental organizations, and the NIMBY (Not In My Back Yard) syndrome. According to Tošovský, there is already nowhere in the Czech Republic that more high-tension wires can be strung due to all the various protected areas. For a functioning European market it is necessary to get rid of bottlenecks in the networks and establish a unified system of payments for international transmission. Of course, the existence of a common, free market in electricity could pose the risk of insufficient supply, and if this were to occur, a new wave of protectionism might start in countries which do have their own capacity to cover demand. Another conclusion of the conference was related to his presentation: “The permit procedures for construction of new lines should be accelerated. It is extremely urgent that national and EU norms be simplified and harmonized in order to accelerate permit processes for the construction and modernization of network infrastructure!”
The last block of the conference was devoted to institutional unification of the European energy market. Daniel Dobenni, president of ETSO, introduced the new association ENTSO-E, the European Network of Transmission System Operators-Electricity. The aim of the association is to improve the reliability and efficiency of the operations and coordination of the European market and regional markets. The association was established in anticipation of the approval of the so-called third legislative package for the European electricity market. The association intends to harmonize rules and contribute to unifying the market such that the distribution network in Europe can be seen as a whole. It will support the hookup of poorly accessible areas, the development of international capacity for transmission, and thereby the option to use and participate in renewable energy sources. The goal of ENTSO-E was captured in another conference conclusion: “The aim of our collaboration is a unified European transmission network. Coordination of the construction and modernization of the transmission networks is needed within the European regions (the synchronous hookup of areas), as are investors for new resources and respect for the development of the consumption of electricity.”
Despite the continuing integration of the electricity market, the connection of the various transmission systems remains problematic overall. The common market creates several unfortunate effects, such as helping energy producers profit without having to pay for international transmission. Lack of supply then shows up as bottlenecks, instability, and the low interconnectivity of several parts of the system. Transmission system operators particularly have to balance the inequalities in supplies from renewable resources; at the political forum they primarily concentrated on lamenting that more investment is needed in networks and that the conditions for building new lines need to be simplified. Of course, we did not hear anything at this conference about innovative solutions such as smart grids, nor did we hear an emphasis on energy efficiency or savings, thanks to which it would be possible to seek solutions other than constructing more high-tension lines.
Ondřej Pašek, Centre for Transport and Energy, Prague