Security of electricity supply and infrastructure[fr][de] 

Severe power failures hit Italy, Denmark, Sweden and other European countries in the winter of 2003. As a response to these events, the Commission in December 2003 proposed a draft directive designed to improve the security of electricity supply and boost investment in infrastructure in Europe.

The rationale behind the Directive on the security of electricity supply and infrastructure is to provide incentives for investment in transmission and distribution networks in a market which is gradually opening up to competition. According to the Commission, there is an increasing risk of interruptions as power demand grows and the strain on the network increases. It therefore proposed the following requirements:

• Member states to define a clearly defined policy to ensure a good equilibrium between power supply and demand
• Member states to define and meet standards concerning the security of transmission and distribution networks. Failure to comply with the targets could lead to financial penalties
• Transmission System Operators (TSOs) to submit regular investment plans for cross-border interconnectors to its national regulator
• Regulators to submit a summary of these investment programmes to the Commission for consultation with the European Regulators Group on Electricity and Gas.

The proposal also includes a right for regulators to intervene to speed up the completion of projects. 

The Commission’s proposals stirred controversy: while the electricity industry welcomed the Commission’s approach, environmentalists called for alternative ways to deal with supply shortages.

The Energy Council on 29 November 2004 adopted a compromise proposal which would limit the Commission's and the regulatory authorities' role in the construction of electricity interconnectors between EU member states. The text deleted some of the most 'interventionist' elements in the draft directive and simplified the reporting requirements for transmission system operators. Such provisions had been strongly opposed by Parliament.

"I trust the compromise proposal will take away many of the concerns expressed in the European Parliament during its first discussions and hope we will reach an agreement in spring," said Laurens Brinkhorst, Dutch minister for economic affairs and president of the Energy Council.

In July 2005, the Parliament adopted a compromise resolution which cleared the way for a first reading agreement with the Council. MEPs said that the primary objective of the directive should be to safeguard supplies and ensure that the liberalised pan-European electricity market runs smoothly. They voted for regulatory authorities in the member states to be able to impose economic sanctions on network managers should they fail to complete interconnection projects on time.

In December 2005, the Energy Council gave its final approval to the Parliament compromise.

The Union for the Co-ordination of Transmission of Electricity (UCTE), representing European power grid operators, believes that in the short term (up to 2006), the EU’s power system should remain reliable due to new generation capacity and grid improvements. After 2008, however, a significant decrease in generation margins may lead to an unreliable system. This situation could even be worsened by forthcoming decisions to decommission existing power plants.

As a result, the UCTE maintains that firm investment decisions are needed to prevent future blackouts in Europe. In particular, the report calls for a significant development of the ultra high voltage transmission network in countries with a high share of wind energy (such as Spain and Germany) to cope with unexpected generation peaks.

The Union of the Electricity Industry (EURELECTRIC) has emphasised that a secure electricity supply requires continuing adequate and timely investment across the entire chain. The industry calls for investments to maintain the existing grid and to develop the transmission system. Moreover, in order to cope with increasing electricity demand, EURELECTRIC maintains that some 520 GW installations need to be built in the next 30 years, at a cost of over 600 billion euro.

FORATOM, the European atomic forum, has also emphasised that large interconnected networks are essential. The current network should be improved, in particular by creating more substantial cross-border transmission lines. Market rules must encourage grid operators to invest in new infrastructure, and new high-voltage lines are essential between certain countries where bottlenecks occur and where insufficient or poor interconnection is a problem.

The Commission's proposals have sparked an outcry among environmentalists, who maintain that the measures are costly, ineffective in improving the security of supply situation, and biased towards the interests of big electricity companies while undermining the EU's efforts to cut greenhouse gas emissions. Interest groups have therefore called for alternative measures such as decentralising power supply, increasing energy efficiency and promoting renewable energy production.

According to WWF, the Commission "wants to impose on member states irreversible energy investments on new power stations and high-voltage grid lines that will deeply affect the EU's energy and climate policies".

Greenpeace is also sceptical: the organisation accuses the Commission of strengthening the largely fossil and nuclear-fuelled power system in place today rather than driving smaller-scale investment in electricity distribution lines. This works to the detriment of newer, cleaner electricity generation options, argues Greenpeace. “By focusing its efforts on trying to increase interstate competition, the Commission is ignoring its environmental commitments. This in turn risks creating a single market of dirty power at the expense of a more diverse and environmentally acceptable electricity system,” said Greenpeace.

Renewables associations EUFORES and EREC, environment agencies federation FEDARENE and cogeneration association COGEN Europe also maintain that decentralised and diversified systems would be less vulnerable to accidents (extreme weather conditions, terrorist attacks etc), as well as reduce transport needs. They also point out that renewable energy sources and cogeneration are particularly suitable for use in decentralised generation systems.