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Pan-continental market still far off

EUROPE: Experts remain unconvinced that Europe is up to the challenge of integrating wind into a pan-continental energy market.

"Building a secure and sustainable energy future cannot be achieved without an integrated market," said Hans ten Berge, secretary general of EU electricity association Eurelectric at its conference in March. But he acknowledged that this was easier to say than do, given the difficulties of balancing and counterbalancing variable renewable energy supplies. Berge called for a pan-European solution. "Looking at how renewable energy sources (RES) can be brought to the load centres ...

is no longer a national debate but a European one," he said, and called for greater political support to achieve this goal. But his colleague struck a pessimistic note. Eric van Vliet, vice-chairman of Eurelectric's markets committee, said that despite various efforts a pan-European market is still not within reach.

EU energy commissioner Gunther Oettinger said the European Commission was aware of these concerns but added that he hoped to deliver a roadmap for a truly integrated pan-European market by 2015. He said the EU would "never be able to deliver our ambitious energy efficiency or greenhouse gas emission targets without fully utilising the opportunities that large and integrated markets offer". But he agreed that there remained much to do. "We are not there yet," said Oettinger. "Our electricity highway is plagued by persistent bottlenecks and the congestions are not optimally dealt with."

He added that transmission system operators would bear the brunt of building the infrastructure needed to integrate large-scale wind energy with both the networks and the markets. "We require a European mechanism to allow us to produce our energy in the most efficient way, and so we can be sure that valuable wind energy is not stuck at a border, or worse never produced, because we have not (laid the) cables to carry it."

Oettinger said the newly established European Agency for Cooperation of Energy Regulators (Acer), expected to be up and running by March 2011, would help to improve regulatory coordination and cooperation across national borders, and announced a number of legislative proposals expected later this year that are aimed at providing a pan-EU market. These include an energy infrastructure package, which he said would contain proposals for harmonising investment rules in the EU and attracting private financing.

These proposals were welcomed by conference delegates, who stressed the difficulties faced by the electricity market and the need to integrate significant amounts of renewables in the years to come. Martin Crouch, chair of the sustainable development task force of the Council of European Energy Regulators, agreed that "intermittent renewable energy will bring a massive change to the electricity industry" and focussed in particular on the challenges posed by the integration of wind generation. However, he suggested that changes to market rules - such as gate-closure time, cross-border integration of intra-day, balancing and reserves markets and network arrangements - would encourage wind generation to integrate efficiently into the market.

Various solutions to the problems posed by intermittent renewables supplies were suggested by Marcel Cailliau, chairman of Eurelectric's taskforce on the integration of renewables, including larger spot markets, trading closer to real time, grid development, market-based renewables support schemes, and price signals for investment in backup and flexible generation. He cited the introduction of intra-day continuous trading across all borders and the coupling of day-ahead markets as the two top policy objectives to be achieved over the next few years. He added that to minimise the increase in ancillary service costs for customers, regulatory frameworks should provide incentives for wind generators to be subject to the same market arrangements as other generators.

RWE's William Webster said the market should be allowed to adjust gradually, insisting that solutions such as energy storage or demand-side management cannot be mandated by legislation but need to be left to develop and compete freely, providing that the correct price signals for investments are in place. Christian Kjaer, CEO of the European Wind Energy Association (EWEA), agreed that the EU market needed to function to ensure efficiency and drive down costs for consumers. He said the integration of markets via regional developments and investment in both onshore and offshore grid infrastructure was therefore needed, and called for the "freedom of movement of electricity" as a fifth EU freedom after people, services, goods and capital.

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