Question: As the proportion of wind in the European energy mix grows, there is the issue of how this can be traded and transported across borders. Is the supergrid - a wide transmission network across Europe - the solution to this, and if so what needs to be done to make it a reality?
Ana Agaudo Cornago – CEO Friends of the Supergrid
The supergrid is essential if we are to increase competitiveness, improve energy security, make the utmost of existing energy mixes and integrate all the renewable energy potential of Europe. But the million-dollar question is whether this can be achieved in the near future. If there was the political will, it certainly would be possible. We are convinced that the financing of the project would not be a problem and the technology is certainly there to make it a reality.
But the situation today is that we can't attract investors to commit even to a smaller pilot project as the first step towards the creation of the supergrid. This is because we need to see a concerted political commitment to the project. This is starting to be there when you speak to member states separately; ministers will often say "of course we need to increase interconnections". Indeed, the news that Russia has negotiated a massive gas contract with China, and the problems in Ukraine may well push member states to be more active in pursuing energy security.
But there still isn't coordination between states. So the regulatory frameworks that are in place at the moment are not suited to greater integration. There are too many differences between member states, and if it is too complicated to arrange interconnectors between two countries, imagine how difficult it would be to bring together say four, and up to ten countries one day, in the North Sea.
Eddie O'connor – CEO Mainstream Renewable Power
As global warming accelerates we must think in terms of a 100% renewable energy solution. We have the technology in wind and in solar PV. In Europe for instance we have wind in the north, particularly at sea and we have solar in the south.
Wind and PV are non-dispatchable. New strategies have to be developed to cope with this. What is needed is a continental wide supergrid, utility and distributed electricity storage mechanisms, coupled with a smart distribution grid. The traditional, national approach to transmission ownership and management will not work.
There will have to be many changes at political and institutional level to bring about the supergrid. On the political side we need a new energy treaty in Europe. On the institutional side there has to be a new organisation that will manage the individual, nationally based transmission system operators.
This could be quite simple like the PJM arrangement in the eastern United States or it could be as complicated as a series of regional groupings of transmission operators which would also have to be linked together. Mainstream has been designing the key element of the supergrid, the Supernode. This allows renewable energy whether it's from sun or wind to be collected as AC then turned into DC for transmission across the continent.
Paul Wilczek – senior grid advisor EWEA
One of the benefits is cost savings, in particular in offshore wind. Currently we are connecting projects radially meaning that each wind farm gets its own connection to a country. The supergrid would enable central connections serving several countries, saving a lot of copper and bringing down costs.
But one of the main barriers is how cross-border cost-allocation decisions will take place. Up to now, countries tend to take a 50:50 approach to cost. But once you are beyond two countries, and to situations where a connection might benefit one country more than another, things are complicated. The project's success relies on bolder action from the Agency of the Corporation of Energy Regulators (ACER). It needs to act more like a European regulator and take cost allocation decisions in the interest of the European consumer, which it has the power to do.
Financing is also an issue. This is not due to market failure or down to a poor business case, it is largely an issue with access to equity. There are programmes such as the European Infrastructure Package that can provide funds and grants, but this is just one part of the story; Europe cannot fund everything. The key is to trigger investment in a safe, low-risk investment, but one that is also long term. The answer to this lies in attracting more institutional investors by raising awareness of the virtues of the investment case.