Brussels, 17/11/2010 (Agence Europe) - The modernisation and improvement of the energy infrastructure of the EU in order to guarantee its supply is an unavoidable challenge, but a very expensive one, the European Commission warns. The EU will need to invest 1 trillion euros by 2020 in its entire transport network and in its production, transmission, distribution and storage capacities, particularly to integrate energy from renewable sources. For the gas pipelines and high-voltage lines alone, an envelope of €200 billion will be needed. Time is short and the European executive is therefore proposing to identify priority projects of European interest, and to speed up excessive authorisation procedures.
“It's all to be done!”, said Günther Oettinger on Wednesday 17 November, presenting the press with a highly-anticipated communication on the priority energy infrastructure for 2020-2030, together with a detailed plan for an integrated European energy network. “For electricity alone, no less than 45,000 km of new power lines will be needed”, the European energy commissioner added. His services put at 20% (from 3, 362 to 4,073 tetrawatt/hours) the growth in electricity production needed between 2007 and 2030 to cover the needs of the EU, without taking account of the possibility of a substantial increase in electricity mobility. For gas, the Commission evaluates an increase in dependency on imports from around 60% today to between 73% and 79% in 2020, and between 81% and 89% in 2030. In terms of volume, these additional gas requirements have been assessed at between 44 and 148 million tonnes of oil equivalent (Mtoe) by 2020 and between 61 and 221 Mtoe by 2030.
Major investment will therefore be needed to reinforce the capacities and infrastructure for electricity, gas and oil in the EU, particularly in order to integrate the growing production of renewables (wind, solar, hydro electric) and to put an end to the energy isolation of certain new member states. The EU will have to invest €1,000 billion by 2020 (2000 billion by 2030) to modernise and improve all of its transport networks and transmission, distribution and storage capacity, including 500 billion for new capacity, particularly to integrate renewables, 400 billion distribution networks and smart grids, and an envelope of €200 billion needed for gas pipelines and high-voltage power lines alone. According to the Commission, however, the private sector will only be able to pick up half of this bill, leaving a deficit of some €100 billion, 40% as a result of delays in building permits and 60% due to investment risks, the absence of an appropriate financial instrument and lack of commercial interest for projects of European or regional interest. In order to cover this deficit, the EU may appeal to the European Investment Bank (EIB) or to other international financial organisations. The European executive also hopes to be able to earmark some €800 million for this modernisation effort every year, depending on the results of the forthcoming negotiations on the next multi-annual budgetary framework of the EU.
As the infrastructure challenge calls for urgent Community responses, the Commission is proposing a strategic planning method to identify priority projects and European interest. A limited number of corridors which are vital for the transit of electricity, gas and oil to be developed as a matter of urgency have already been defined by the Commission. On the basis of these corridors, projects and European interest can be designated in 2012. They will enjoy Community funding and receive a response to their applications for building permits within a shorter timeframe, whilst ensuring full respect of EU legislation, particularly as regards the environment and the principle of public participation (for a detailed overview of the proposal on the improvement of authorisation procedures, see EUROPE 10236). During the preparation and implementation phases of the project, the Commission will favour regional cooperation between the member states. The European executive has also specified longer-term objectives, such as electricity motorways.
In the assessment of the Commission, there are four priority corridors for electricity: - the offshore network in the northern seas linked to Europe by the north and centre to transport electricity produced in wind farms to cities or to store it in the hydroelectric power stations of the Alps or Scandinavia; - interconnections in South-West Europe to channel wind, solar hydroelectric energy to the rest of the continent;- connections in Central, Eastern and South-Eastern Europe to improve the regional network; - and the integration of the Baltic market. There are three corridors in the gas sector: - the South corridor to bring gas from the Caspian Sea region to Europe; - connection of the Baltic market to central and south-eastern Europe; - and the North-South corridor in Western Europe to relieve the internal bottlenecks and allow better use of external provision. The Centre/East network is the only priority corridor for oil. Another priority is the development of smart grids, for which the European executive is hoping to see an initiative to complete the third liberalisation package. Lastly, the Commission is hoping to see the construction of a network of pipelines to transport captured CO2. (E.H./trans.fl)