July 7, 2009
The apparent disagreement between François Meslier of EDF and the French regulator concerning the need (or lack thereof) for improved cross border connections misses a few important points.
The recent DG TREN infringement proceedings against 24 member states with respect to cross-border power connections mentioned in more then 50% of cases the need for better congestion management. It is straining credulity too much to imagine that in all these cases, the issue relates only to management and not to lack of capacity.
Thus (as Ms. Dourlens acknowledges) some investment is needed.
However, working on the basis that most of the Transmission System Operators (TSOs) are substantive organisations (one assumes that their employees number more than one man and his dog) and given that any cross-border connections take time to build, one would think that TSOs could simultaneously improve congestion management whilst also building new or improving existing cross border connections.
In the case of subsidies, whilst the EDF may not elicit much sympathy when saying these are needed, in fact it has a point. In a report published this month by Poyry (Impact of Intermittency), it was noted on page 19 that the economic case for cross-border connections can be challenging if their only impact is to remove pricing differentials.
In turn and following Mrs Dourlens’ logic, if the case for improved cross-border connections revolves only around economic considerations, then the EU faces problems in being able to integrate more renewable energy into TSO networks.
A report by Bart Ummels (Power System Operation with Large-Scale Wind Power in Liberalised Environments) notes that it is possible to absorb high levels of renewable energy into a given TSO network, but only with better market regulation coupled with much improved cross-border connections.
Thus if the EU is to achieve its 2020 aims with respect to renewables, cross-border connections need to be subsidised. It also means that the TSOs need to do several things in parallel. Some will be ‘easy’ (congestion management), and some will be costly and time-consuming (building new interconnectors).
Moving a little bit at a time is not the answer and will not deliver the results demanded by the politicos.