The electricity grid -- in particular the lack of adequate wires infrastructure and problems of access for renewables -- was held by many speakers at this year's European Wind Energy Conference (EWEC 2008) to be the single most important issue for wind energy in Europe. "The biggest challenge facing us, largely because of the time pressure, has got to be the grid. We've got to get that built as soon as possible," said Ian Mays of Renewable Energy Systems, a leading international developer of wind power projects.
Europe's proposed new package of energy legislation demands that EU governments fix the constraints that are stopping the EU achieving its renewables objectives, grid constraints being a major barrier. Mays is concerned about how long it will take countries to make the changes necessary. "We will not meet that target unless very quickly we start to change some of these institutional problems how we go about developing our grid." It needs strategic planning, easier permitting for new wires and more interconnection between countries, he said.
A new offshore grid infrastructure is also key to enabling wind farms at sea to contribute to meeting the EU's ambitious 2020 target for 20% renewable energy supply. Emerging from behind a self-imposed wall of secrecy, Georg Wilhelm Adamowitsch, who more than six months ago accepted the job of overseeing connection of northern European offshore wind farms into the continental grid, did little to improve the already unfavourable view of him held by the wind industry. Adamowitsch, a former high-level official at the German federal economy ministry where he was known for his antipathy to wind power, is one of four co-ordinators appointed in September 2007 by the European Commission to speed energy interconnection projects under the EU's priority interconnection plan.
Adamowitsch's first action was to extend his remit to cover all member states bordering the North Sea and Baltic Seas -- not just Denmark, Germany and Poland as the Commission had originally proposed. Since then he has refused to make public his intentions or grant interviews, making his EWEC appearance of particular interest. For the first few minutes it went well enough.
"Without additional infrastructure the EU 27 will not meet its 20% target," he said. Some scenarios indicate up to 40 GW of offshore connecting to the European network by 2020, he noted. But he referred to a scenario showing up to 140 GW by 2030 as "very optimistic," before raising the hackles of the industry further by saying it would take him four years to present his grid strategy.
Adamowitsch said his first year is being taken up with consultations with governments, regulators and transmission system operators in northern Europe. In a first report he plans for this September, he intends to outline a strategy for connecting offshore wind in northern Europe. A common approach is needed for setting the right incentives to encourage industry and the finance sector to make the necessary grid investments, he said. "The uncoordinated approach to development of grid infrastructure is not optimal, neither is a project by project approach." Adamowitsch called for more discussion about smart grids and the role of the regulators who decide the cash flows of grid providers and the levels of remuneration for grid investments.
He added: "It is essential to set priorities in the planning stage, as well as in the authorisation phase in the context of the fauna and habitat legislation." This may require changes to European environmental laws to allow development of a sustainable electricity system, he warned. His second year will be dedicated to communicating and implementing the proposals.
Adamowitsch's plan of action was shot down by industry leaders, who said they cannot and will not wait for such heavy handed central control. "We don't have time to spend four years designing a new grid system which will then take another 10-12 years to build. We have got to get on with it quickly," said Mays.
From Siemens, Andreas Nauen warned that turbine manufacturers and suppliers need to make investment decisions now on long lead items for offshore installation equipment, such as specialised vessels. They cannot wait for EU decisions. "We as suppliers also have to make decisions and we can't wait for the role of the regulator to be defined," he said. If the European market does not shape up, manufacturers will simply go where the business is -- to China, Australia, the US or Canada. "If we cannot prove there's a future for offshore in the near term we will not invest."
According to Eddie O'Connor of Mainstream Renewable Power, the grid component of building wind farms at sea is around 10 to 15% of the total cost. He called EUR 200-300 billion for 500,000 MW "a very small price to pay."
The main problem, he pointed out, is that it is almost impossible for any entity other than an existing grid company to make investments in grids. Inject competition into grid expansion, however, and investment costs come down by 50%, he said. The EU should offer incentives for private companies to build grids, he said. By breaking the monopoly of existing grid owners, this would help Europe deliver on its competitive single electricity market aims, continued O'Connor. Private companies are allowed to build transmission lines in the US, he noted, citing the success in Texas with getting transmission built for wind power. "I would love to see this happen here; let the free market work in this industry."
Priority access to the wires for renewable energy production is a key provision in the proposed European renewable energy legislative package. But for the incumbent power industry it is a far from welcome market intervention. Hans ten Berg from Eurelectric, the association representing the established electricity industry in Europe, took issue with renewables being favoured. There should not be priority for some energy technologies above others; everybody should have equal access, he argued. "By setting priorities for wind we are following the fashion of the day." Rather, there should be intelligent grids, he said.
Christian Kjaer from EWEA agreed "in principle." Priority access is not needed if the market works. "But it doesn't," he said. And for markets to work, requires the generation activities of energy companies to be separated from their wires businesses. "So until we have a full functioning market with full ownership unbundling we need priority access to the grid in order to create a level playing field." The European Commission's Hans van Steen agreed. "In the longer term we may not need priority grid access, but for the moment we do need it."
With no less than six sessions devoted to grid issues and two to forecasting wind power output, integration of wind into European networks was a dominant theme of the conference. The European Commission's proposed legislative package on energy market liberalisation is mostly good news for the wind industry, delegates were told. It proposes an enhanced role for regulators, increased cross-border co-operation between transmission system operators and unbundling of vertically-integrated power companies. It stops short, however, of demanding full separation of the ownership of generation and transmission, instead allowing countries to create an independent system operator to run the wires.
Many of the Commission's proposals will be endorsed by the European Parliament, which is in favour of ownership unbundling, commented parliamentary member Eluned Morgan, who is the parliament's rapporteur for the liberalisation package. She added that E.ON's decision to voluntarily divest itself of its transmission activities ahead of legislation (Windpower Monthly, April 2008) caused champagne corks to pop in the parliament's energy committee. The question is, she said, what will happen when the package is considered by the heads of European governments. Eight countries are known to be resisting the unbundling provisions. "If we do not get this package through quickly we will run out of time," she warned. A new parliament is to be elected in spring 2009.
Parliamentary member Claude Turmes, a long time renewables campaigner, called for a change to the remit of Europe's electricity market regulators. At present they focus exclusively on keeping costs to a minimum. This prevents transmission system operators from pursuing the more expensive underground option for transmission lines to speed up grid construction, he said. "We need to change the mandate of regulators from only cheap, to as cheap as possible, while integrating large scale renewables and small scale renewables," he said.