EU policy to develop the European power grid: From market integration to decarbonisation

Author: Thomas Sattich

Large scale integration of intermittent renewables beyond today’s levels requires the consecutive integration and common management of the still largely national power pools (Battaglini et al. 2009). So as to assure that decarbonisation of Europe’s power sector can continue, the EU is hence confronted with the challenge of implementing a policy to develop and integrate the European grid. The discussion of such a European approach to the power grid is older than one might think: Already since the 1920s a dualism can be observed between a top-down, supranational approach, and a gradual, bottom-up approach to the development of the cross-border power transmission infrastructure (Lagendijk 2008:80ff).

So far, however, the economic rational of utilities and the national perspective of policy makers obstructed initiatives to Europeanise grid development; in post-World War II Europe the gradual, case-to-case approach therefore largely prevailed over the idea of a top-down implemented European grid (Van der Vleuten&Lagendijk 2010:2045).

From the integration of power markets…

Only with the Single Market Program of the 1980s the European Community started to take a more assertive stance on energy related issues, and pursued a policy aiming at deeper integration of power markets and the development of a common carrier system for electricity (Commission 1988:72). One landmark in this regard is the Commission Working Document of 1988 (Commission 1988) which proposed to declare certain large-scale energy infrastructures as being of Community interest and hence entitled for special treatment. Since then a number of policy initiatives aimed at the development of a power transmission infrastructure that is functionally adequate for the creation/finalisation of a pan-European electricity market.

Understood as support for renewables, electricity transmission infrastructure had, however, only little prominence during the first years of EU involvement with this issue (Commission 2008:8; Lauber 2005:4). With the EU’s growing ambitions in climate policy and the growing numbers of renewables in the system, the question, how to reconcile the community’s environmental policy with the goal of creating an Internal Energy Market, and how the increase of renewables affects that market, became, however, a central one (Glachant et al. 2013:68-70).

…to the integration of renewables

Towards the end of the 1990s the Commission addressed this problem with a number of papers (Commission 1997, Commission 1998). These concluded that power transmission capacity was indeed insufficient (Eikeland 2011:20); the existing gaps were, however, still mainly regarded as barriers to cross country trade of electricity, not the integration of renewables. Given the low penetration of the power system with intermittent renewables at that time, and the generally low targets for their increase, the reason for this lack of technical analysis is obvious: Mechanisms for the support of renewables were perceived as support for the increase of RES generation capacity.

The environment, in which these renewables operate, was, however, largely neglected. Understood as the necessary prerequisite for the operation of renewables, power grids therefore had only low priority (see Fouquet&Johansson 2008; Haas et al. 2004). Only with regard to the most obvious cases such as far-off wind parks, these papers point out the need for the adaptation of power networks to the particularities of renewables and the additional costs for the installation and/or operation of renewables at specific sites (Commission 1997:29). Where the relation of electricity networks and renewables was discussed, it was mainly the free mandatory access to the grid (Commission 1998:8) at fair prices (Commission 1997:14).

Since the European Union set out for 12 per cent of electricity from renewable sources by 2010 (EWIS 2010:146), the promotion of RES has, however, gradually moved up the European agenda (Nilson, Nilsson & Ericsson 2009:4454): The existing gap between the importance of the power grid for the operation of renewables on the one hand, and the focus on economic support mechanisms for new (renewable) generation capacity on the other, started therefore to close in the following years (Commission 2000:48), and questions concerning the electricity transmission infrastructure such as the conditions for grid access, grid reinforcement, and charges to RES generators for use of networks obtained more attention (Jansen&Uyterlinde 2004:93):

A technology-specific approach for the support of renewables in general (Boasson&Wettestad 2010), and energy transmission infrastructure in particular, became hence an important element for the discussions how to integrate renewables (Jansen&Uyterlinde 2004:95). The Commission Green Paper on energy security from the year 2000 is a good example for this new emphasis. So are the two Directives 2001/77/EC and 2009/28/EC on the promotion of renewable energies, which clearly reflect the growing importance of the grid issue for renewables, and provide measures to improve the situation.

Finally, the Europe 2020 strategy (European Council 2010) and the Energy Roadmap 2050 (Commission 2011b) moved the focus of EU energy policy further towards sustainability and decarbonisation. In order to evaluate, whether these latest developments of EU energy policy and on electricity transmission infrastructure evolved to a consistent body of instruments which is suited to reach the decarbonisation of the power sector, a closer look at particular programmes is necessary.

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