Ministers from all ten 'North Sea Countries' signed a 'Memorandum of Understanding' on Friday (3 December) to develop an offshore electricity grid seen as a major step forward for a single European market for electricity.
The long-awaited project has been in the pipeline since member-state governments and industry met at a high-level conference in October to start thrashing out a cooperation agreement.
Until now, EU member states had developed offshore wind farms separately, meaning that any surplus energy produced is often wasted.
Ministers agreed to coordinate their investments for developing offshore connections between Sweden, Denmark, Germany, the Netherlands, Luxembourg, France, the United Kingdom, Ireland, Norway and Belgium. Ministers also pledged to tackle barriers to cross-border electricity trade.
Christian Kjaer, chief executive officer of the European Wind Energy Association (EWEA), said "the [agreement] is an indispensable step to create an offshore electricity grid, critical for developing a single European market for electricity".
Greenpeace welcomed the move as a "promising signal".
A Steering Committee, a Programme Board and three working groups were set up to cover issues such as 'grid configuration and integration,' 'market and regulatory issues' and 'planning and authorisation procedures'. The working groups will involve industry, governments and the European Commission.
They will report twice a year to Paul Magnette, Belgian minister for energy and initiator of the project, who described interconnections between European states as "indispensable for the industrial revolution to benefit innovation and employment".
Single market for electricity
Electricity provision is one of many services that are not part of the EU's single market.
150 gigawatts of offshore wind power are now planned by 2030, which is estimated to represent up to 16% of the EU's electricity consumption.
Previously, it was difficult to harness wind power's potential to contribute to the EU's goal of sourcing 20% of its energy from renewables due to problems storing the energy generated.
But by allowing excess energy to be transferred or traded from one EU member state to another, the problem has potentially been resolved, leading the EU to potentially generate more energy from the North Sea than is available from oil in the Middle East.
Rethinking the grid
Europe's electricity grids were originally built to handle large centralised power plants rather than great amounts of distributed renewable generation such as that produced by offshore wind farms.
An EU 'supergrid' would help solve the problem by introducing a High Voltage Direct Current (HVDC) cable network, more suited to transferring power across long distances without losing as much energy on the way.
However, it remains to be seen who would pay for installing such cables, a question which the memorandum does not answer. Indeed, the text only commits signatories to "take into account that [the grid] will require reinforcement of the onshore grid".
According to Belgian Energy Minister Magnette, "with this memorandum, the objective of 100% renewable energy by 2050 is no longer a dream".