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27/09/2016

Electricity linkage target dropped ahead of EU summit

Energy

Electricity linkage target dropped ahead of EU summit

Spanish windfarms produce an energy surplus. With electricity interconnectors renewable energy can be sold to other member states. [Max Westby/Flickr]

EXCLUSIVE: EU leaders will not agree on 2030 targets for exchanging energy through electricity interconnectors, because of a long-running row between Spain, Portugal and France, according to documents obtained by EurActiv.

An obligation for member states to make 15% of their national generation capacity available to other EU nations was ditched from draft summit conclusions, which heads of state and government hope to finalise at a summit opening in Brussels today (23 October).

The target is part of a package of measures in the EU’s proposed 2030 climate and energy framework. The package also calls for a legally-binding 40% reduction of greenhouse gas emissions, a 30% improvement in energy efficiency, and raising the share of renewables to at least 27% of the EU’s energy mix.

France protecting its nuclear industry from Spanish renewables

Electricity interconnectors between member states will form an important part of the EU’s work towards an “Energy Union” because they allow countries to trade energy with each other.

Spain and Portugal were pushing to make the 15% target higher and legally-binding on EU member states. Both countries have long accused France of purposefully protecting its nuclear industry from the competition of their renewables.

Spain, for example, produces more wind power than it needs, but the renewable energy it produces is wasted because the infrastructure is not in place to take it to France. Spain is now considering a €2.5 billion linkage to the UK to sell its surplus after decades of no progress.

Italian officials, whose country holds the rotating Presidency of the EU, are seeking to broker agreement on the EU’s proposed 2030 energy and climate change framework, which will feed into global negotiations in Paris next year.

The negotiating document, prepared by Italian officials and dated 16 October, deletes the 15% requirement – a signal that no deal could be reached with France, Spain and Portugal. The final conclusions need to be agreed by the whole European Council which regroups the EU’s 28 heads of states and government.

The situation could change. Talks have continued, and it is still possible that the leaders themselves will broker a pact during the dinner discussions in Brussels this evening.

Diplomats met again on Monday night. EU officials said there was no agreement on the conclusions yet, but the remaining issues to be resolved were the gas, efficiency and renewable targets.

The efficiency target would definitely be non-binding, they said. Unsubstantiated rumours Tuesday (22 October) suggested member states could settle on a 27% efficiency increase.

On renewables, according to EU officials, all member states can agree on an EU-level binding target, provided there is flexibility for individual countries to set their own targets at national level. This is less stringent than the existing 2020 framework, which set binding renewables targets for each country in order to reach the overall EU objective.

Interconnectors needed for renewables, energy security

Success in persuading France, Spain and Portugal could shape the EU’s internal energy market for years to come.

Electricity interconnectors are needed to take full advantage of the EU’s renewables capacity, but they also require political impetus, according to E3G, an influential environmental think tank.

Countries can buy in renewable energy from other member states in order to meet their share of renewables targets.

More interconnection capacity also bolsters energy security, making the EU less vulnerable to unreliable suppliers, because shortages can be made up elsewhere.

Energy security has become a hot issue since the EU’s dependence on Russian gas was highlighted by the Ukraine crisis.

Instead of the 15% target, officials have added language to the draft conclusions, pointing to a renewed commitment to a 10% target. That target was first set by the European Council in 2002.

The paper also calls for the implementation of the North-South corridor, a project to remove internal bottlenecks for gas transport and to reduce Central and Eastern Europe’s vulnerability to a cut in Russian gas supply.

Interconnections to diversify energy suppliers and routes to Finland were also needed for the country’s energy security, the draft said.

E3G said an interconnection target helps make the internal energy market a reality. A target of at least 15% was needed, it said.

Regulators

The Agency for the Cooperation of Energy Regulators (ACER) and Council of European Energy Regulators (CEER) said that the 2002 10% target had delivered, encouraging more market integration.

ACER is an EU agency created to work towards an internal energy market. The CEER represents Europe’s national regulatory authorities.

Responding to a question put by EurActiv, Lord Mogg, CEER president and ACER board member, said the 15% target was too much of a “blunt instrument”.

Decisions on electricity interconnectors needed to be made on the basis of a targeted cost-benefit analysis to prevent waste, he said.

Speaking at the launch of an ACER/CEER report on the internal electricity and gas markets, Alberto Pototsching, ACER director, said the efficiency of electricity interconnectors was 77% in 2013.

That meant a lot of energy was wasted, he said, and it didn’t always result in consumer prices across the EU converging.

Available cross-border interconnector capacity was frequently underused in 2013, the report said.

Due to the significant variations in costs, needs and potential gains across the EU, a single 15% target could “result in perverse incentives and pressures for inefficient solutions”, the CEER said in a paper shared with EU policymakers.

The report found that, despite a drop in general wholesale energy prices, gas and electricity retail prices continued to grow in 2013.

Background

For 2030, the EU climate and energy framework has proposed:

  • A 40% greenhouse gas reduction target that is binding at nation state level and may not be met by carbon offsets
  • The use of carbon offsets to meet further emissions reduction commitments made in international climate talks
  • A 27% renewable energy target that is binding at an aggregate European level but voluntary for individual member states
  • No consideration of any new energy efficiency target until after a June 2014 review of the Energy Efficiency Directive  
  • Non-binding shale gas recommendations which could be made binding after a review in 2015
  • A market reserve facility for the Emissions Trading System, with the power to withhold or release up to 100 million allowances
  • An end to the Fuel Quality Directive, which mandates reductions in the greenhouse gas intensity of transport fuels, by 2020

Timeline

  • 24 October: Second day of summit
  • December 2015: UN summit in Paris expected to finalise global agreement on climate protection to replace Kyoto Protocol

 

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