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EU Consultation on Energy Networks

by DoDo Sun Mar 8th, 2009 at 01:09:44 PM EST

When discussing energy policy, many ET readers have stressed the importance of transfer infrastructure, e.g. pipelines and electricity grids. Apparently, networks are now on the EU Commission's agenda, too.

You'll find this feature prominently in the Commission's SER-2 [03] Communication on the Security and Solidarity Action Plan (as diaried by Luis de Souza). But, with more focus, in the Green Paper titled Towards a secure, sustainable and competitive European energy network (pdf!).

Last November, the Commission started a Public consultation about said Green Paper. Submissions can be sent by email until 31 March 2009. With our history of participation in prior consultations, European Tribune should participate!



What we'll do on ET

I picture the process as follows:

  1. this first diary on the subject is for brainstorming: everyone is invited to write down their own thoughts about the Green Paper and the questions asked, and discuss respective views;
  2. someone (me?) will volunteer to write a draft for a common ET submission;
  3. in a second diary (in a week or two), this draft should be ironed out;
  4. the common ET position should not hold back you from submitting personal opinions, especially if we can't reach agreement between differing views on some point.


Consultation questions

As taken from the consultation page:

Submit your comments by 31 March 2009 to TREN-GREEN-PAPER@ec.europa.eu

You may structure your response according to the following questions:

Network Policy

  1. What do you consider to be the main barriers to the development of a European grid and gas network? How far can they be addressed at national/regional level, and when should the EU act?
  2. What circumstances justify an EU intervention in local planning disputes related to energy infrastructure? In those circumstances, what should the EU do?
  3. Is a more focussed and structured approach to research and demonstration relating to European networks needed? How should it look?
  4. What do you think is the most important activity for the EU in network development?
  5. Should the EU be more involved in facilitating infrastructure projects in third countries? If so, in what way?

    TEN-E

  6. What sort of support should the EU provide to developers of new energy networks to have the greatest impact, considering that resources are limited? Is the approach of TEN-E still relevant? How can the EU help improve the conditions for investment?
  7. In view of the proposed revision to the TEN-E guidelines, how can the EU improve the focus, effectiveness and impact of the TEN-E policy within its existing budget?
  8. Should TEN-E be extended to oil infrastructure? Should it also be extended to new networks for CO2, biogas or other networks?
  9. Do you have views on, or suggestions for new priority projects which the EU should give backing to?
  10. Would it help TEN-E/EU to gain more impact and visibility if it was turned into an operational security of supply and solidarity instrument?
  11. What additional EU measures beyond those mentioned in this Green Paper would help secure a sustainable infrastructure for the EU?

:: :: :: :: ::

ET participation in preceding consultations

Biofuels:

Green Paper "A European Strategy for Sustainable, Competitive and Secure Energy":

(Tell me if I forgot another one.)

Display:
The credit for calling our attention to this consultation goes to Luís de Souza; relayed to us by Jérôme, who is away for this week.


*Lunatic*, n.
One whose delusions are out of fashion.
by DoDo on Tue Feb 3rd, 2009 at 06:48:02 AM EST
Here is a preemptively drafted general point that I thought it may be worth to make.

Energy policy vs. "undistorted competition"

The formulation of a proper energy policy is impeded by a mistaken sense of what competitiveness on a market is, especially on an energy market.

Markets exist in a market environment. Which competitor thrives on a market and which doesn't is determined by how well they can adapt to a given environment. Thus, competitiveness is not an absolute, but a function of the market environment. One can't divorce market and market environment. And beyond the potential of technologies, resource (and capital) availability, and geography, this environment also includes regulations.

From the above, it also follows that no change in regulation can be 'neutral', not even the removal of a general regulation: every change in regulation 'distorts' the market. In particular, on the electricity market, different types of power plants have different price structures -- fuel costs dominate for gas, upfront costs for wind or nuclear, etc. --, thus, for example, a general change in fuel taxes or long-term planning requirements can cause a modal shift.

Thus,

  • for a proper energy policy, policymakers first have to recognise that they are setting energy policy, whatever they do, and they should better do so consciously.

  • Given the goals of sustainability and reduction of import dependence, the primary and explicit aim on the field of regulations should be the favouring of renewables.

A mere statement of the aim doesn't suffice. It should also be avoided that Member States listen to the established industry players when setting up regulation. For example, in Hungary, the scope of a feed-in law for renewables was capped, because ostensibly the grid won't sustain a higher grid penetration. While the EU as policymaker could and should intervene in such cases by bringing in contrary experience from other Member States, it is even more important to recognise an underlying motivation: established producers stand to lose market share.

Thus,

  • there should be an explicit recognition that established producers are to lose market share (that is, unless they invest massively in renewables themselves). Decisionmakers should be conscious of the conflict potential, and should wage a conflict when making policy.


*Lunatic*, n.
One whose delusions are out of fashion.
by DoDo on Tue Feb 3rd, 2009 at 06:52:20 AM EST
My contribution would relate to the necessity for a workable enterprise model for a cross border natural monopoly, where I think there is now the possibility of a new, and possibly optimal, alternative to conventional "Public" and "Private".

I think that before any ET response is made we have to get to the bottom of our own relationship as a "collective" and our status in working together to make such a submission.

We have talked through this issue many times, and still not arrived at any resolution. Such a resolution is crucial both in terms of our own position as individuals, and of course also from the point of view of our credibility - ie the EU thinking:

 "European Tribune? Why should we give any credibility to them?"

"The future is already here -- it's just not very evenly distributed" William Gibson

by ChrisCook (cojockathotmaildotcom) on Tue Feb 3rd, 2009 at 08:00:01 AM EST
[ Parent ]
  1. The main barrier to the development of an European grid is the lack of a strong and well-financed public initiative on the basis of long-term plans. Neither regional, nor national, nor EU-level policy should be based on expecting advice and solutions from established utilities.

    The EU should act directly on cross-border lines, and get involved in the setting of the goals for national and regional policies (f.e., requiring that grid policies are aimed at ensuring access to the grid for new renewable producers).

  2. The EU should get involved in local disputes when stated EU goals would be adversely affected, e.g. the spread of renewables. If the legal framework was set up (see 1.), the EU should demand action in the spirit of the stated goals of grid policy.

  3. -

  4. The most important activity for the EU in network development is ensuring that utilities give (and can give) access to new renewables producers. (Am I sounding like a broken record?)

  5. My strong personal view is: no, the EU should not get more involved in facilitating infrastructure projects in third countries. The EU should focus all its power on energy independence. Member States and private companies will provide for investments into extra-EU projects that will serve EU energy imports all on their own if they like.


*Lunatic*, n.
One whose delusions are out of fashion.
by DoDo on Tue Feb 3rd, 2009 at 07:09:13 AM EST
  1. If the EU's resources are limited, the best approach would not be support, but some sort of requirement to develop networks (utilities forced to spend from their own resources or some form of tax).

  2. - (will return to it after reading the Green Paper)

  3. Nnno - no extension of the TEN-E to oil infrastructure or others.

  4. -

  5. Sure, turning the TEN-E into an operational security of supply and solidarity instrument would get the EU more visibility, but not necessarily on the positive side.

  6. - (will return to it after reading the Green Paper)


*Lunatic*, n.
One whose delusions are out of fashion.
by DoDo on Tue Feb 3rd, 2009 at 07:18:20 AM EST
[ Parent ]
On 2, I'd say:

Local planning disputes can become a matter for EU policy when EU policies that have direct relevance towards planning are affected, e.g. Natura 2000; EIA Directive, or if the planning dispute has a cross-border element and relates to a TEN-E project. Local planning disputes are otherwise an issue for the national government to work out. It has to be made clear that these disputes are not legitimate grounds for failure by national governments to meet EU targets such as a national renewable energy target.

When a local planning dispute threatens to delay a TEN-E project, the EU Commission should put pressure on the national government and try to clarify the project to local communities.

The EU should spend much more effort to prevent local planning disputes by linking up impact assessments to involve local communities at an earlier stage in TEN projects. To that end, more funds should be allocated for IA in DG TREN.

by nanne (zwaerdenmaecker@gmail.com) on Sun Feb 8th, 2009 at 06:48:02 AM EST
[ Parent ]
  1. Research and demonstration projects should be targeted specifically towards the operation of a European electricity grid with a high share of renewable energy. This implies directing funds primarily towards storage, local generation and changes to the electricity grid.

  2. The most important activity for the EU is rapid expansion of the TEN-E network through co-funding. Priority should be given to electricity networks. Funding for TEN should be enlarged through an increase in the general budget of the EU, shifting funds within the EU budget away from agriculture and fisheries, and utilising money left over in the budget.

  3. Facilitation of infrastructure investment in third countries should be restricted to cases that bring a direct benefit to the EU energy network. Priority should be given to electricity networks that transport renewable energy, as in the DESERTEC concept, over gas and oil infrastructure.
by nanne (zwaerdenmaecker@gmail.com) on Sun Feb 8th, 2009 at 07:12:05 AM EST
[ Parent ]
Electrical grid design is a very tough technical problem, and those problems have to be factored into any pricing structure. As a starting point, one would have to know what the current European grid looks like. How is it interconnected? How far into Africa and Asia does it extend? Is it synchronous throughout? What are the organizations responsible for maintaining frequency and voltage stability? What are the isolation policies when a segment fails? How does the existing pricing model account for demand changes? What is the market structure for the reactive power, and how is are the technical problems related to the separation of generation from distribution handled?

I suspect that there is a sophisticated system in place to handle issues of this sort, and that any realistic proposal to change the power grid marketplace would have to be vetted and approved in the context of this existing system...

by asdf on Tue Feb 3rd, 2009 at 11:03:35 PM EST
... we see that the current ET architecture is sub-optimal for this kind of structured reaction.

I'd like to get back to this but (like yours, I guess) my time is limited these days. Now we could do a 'DoDo and nanne write the ET position' exercise, but we'll at least need feedback...

by nanne (zwaerdenmaecker@gmail.com) on Wed Feb 25th, 2009 at 08:07:54 AM EST
I am also hoping for feedback from Jérôme and Luís, but J is on vacation and told that he'll be busy immediately after, so we agreed to return to this later. Which I forgot to indicate here. We have time until 31 March, so I hope that's okay with you.

*Lunatic*, n.
One whose delusions are out of fashion.
by DoDo on Wed Feb 25th, 2009 at 11:24:39 AM EST
[ Parent ]
Right now 31st of March looks very manageable. But that will change... I'll send you a mail.
by nanne (zwaerdenmaecker@gmail.com) on Thu Feb 26th, 2009 at 01:09:57 PM EST
[ Parent ]
Do it, and stamp your feet a bit when you need feedback.

I'd suggest drafts in e-mail, but publish often - every other day at least - and others will probably come.

by Colman (colman at eurotrib.com) on Wed Feb 25th, 2009 at 11:26:01 AM EST
[ Parent ]


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