SUSANNE NIES

1
Electricity Interconnections in Europe

• SUSANNE NIES
• IFRI ENERGY PROGRAMME
• Présentation Ifri Brussels July 6th 2009

2
The Publication

• Susanne Nies,
• At the Speed of Light? Electricity
  Interconnections for Europe. 218 p., Ifri energy
  programme series,
• Forthcoming september 2009

3
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

4
Electricity grid and Priority Axes
5
UCTE Members
6
Scheme Actors at interconnection
7
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

8
ETSO/ ENTSO-E Members
9
ERGEG becomes ACER

• ERGEG Group of European Gas and Electricity
  Regulators,
• ACER Agency for the Cooperation of Energy
  Regulators
• By 2011

10
ERGEG regional initiatives
11
Electricity Exchanges The French Case
12
The 4 electricity regions including France
13
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)

14
Electricity Prices in EU 2008 Convergence F, BE
15
The Benchmark Nordel
16
Very advanced Central West
17
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

18
Central South
19
Missing Links the Baltic Case
20
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

21
IPS/ UPS
22
Turkey and its neigbours
23
Renewable and Interconnection
24
IMERA Europa Grid Merchant lines
25
The renewable overhaul?When?
26
Improving Efficiency The role of Smart Grids
27
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 

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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)

29
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?