Czechs push for greater EU focus on electricity


The EU should focus its attention on building new power production and transmission capacity, because energy security is not only about diversifying supplies away from oil and gas, said speakers at a conference organised by the Czech EU Presidency. EURACTIV Czech Republic reports from Ostrava.

Speakers at the conference underlined the importance of investing in new transmission capacity – both at national level and across borders – to ensure a better functioning of the internal electricity market and meet the EU’s 2020 renewable energy goals. 

Mirek Topolánek, Czech prime minister and host of the conference, said transmission networks needed upgrading as they had previously been designed mainly for the needs of individual member states, and not for cross-border trading within the EU’s internal market. 

“Without a common energy policy, the common market will remain only a concept, European solidarity will become a cliché and energy security will be just a chimera,” stated Topolánek. 

Europe, he added, should consider what energy sources it wants to rely on so as to decrease its dependence on imported oil and gas and meet its environmental goals. Insufficient production capacity was one of the factors behind the energy price hikes that grabbed headlines before the economic crisis in September, Topolánek said. 

Participants agreed that no technology should be ruled out, including nuclear, provided that it complies with safety and environment requirements. Decisions on the energy mix should remain firmly within national governments’ hands, they said. 

Building a true European grid 

But the conference’s main conclusion was the need to build new transmission capacities. Coordination among member states is necessary in this respect, according to the conference conclusions. Moreover, the need to simplify and harmonise authorisation procedures for construction of new high voltage power lines was highlighted. 

Participants welcomed the recent granting of 3.5 billion euros for the development of the energy sector, mostly for transmission (EURACTIV 29/01/09). One of the recurring issues of the conference was renewable resources (especially wind energy) and their impact on grid stability. 

Czech proposal on single tariff 

The Czech Presidency came up with a proposal for a so-called ‘single tariff’ for international energy transmission. 

Under current rules, cross-border transmission of electricity among EU member states is not compensated by the buyer of the energy. Instead, transmission fees are paid for by the consumers of the country where the transmission is carried out. 

In other words, when an Austrian customer buys energy from Germany and transmission is made through the Czech Republic, it is not the Austrian buyer who pays transmission fees but customers in the Czech Republic. This rule was established in the past in order to promote cross-border trading, but was considered by conference participants to be unfair. 

The proceeds from these fees could then be used for investment in strengthening grids, it was suggested. Topolanek said Prague would like to address the issue in discussions on the third liberalisation package, which the presidency hopes to conclude before the end of the European Parliament’s current term. 

Czech Deputy Prime Minister Alexandr Vondra, responsible for European affairs, told that the final decision should be based on the compromise agreed upon by member states in October 2008 (EURACTIV 13/10/08). 

He indicated that the presidency could come up with concessions for the Parliament in the field of consumer protection, as such issues are not too sensitive for member countries, but could be appealing for MEPs in the context of the upcoming European elections. 

Alexandr Vondra, Czech deputy prime minister for EU affairs, warned that if there are no investments in transmission network and increases in cross-border electricity flows, it will bring yet more pressures to the transmission system. He warned that without investments and fair sharing of costs of such investments, “we have a problem”. 

Vondra added that energy security for the electricity market is not an issue to be solved in the short term. “We do not expect it will be solved during this spring but we want it to become a part of the EU agenda in the next period,“ the Czech deputy prime minister said, adding that if the third liberalisation package is passed, the Czech Presidency sees such discussions as a “necessary next step“. 

Andris Piebalgs, EU energy commissioner, said the Ukraine-Russian crisis showed that “security of supply is still our (European) issue”. “It demonstrated that we should need more than ever to focus on security of supply that we thought it was granted by history,” said Piebalgs. 

Concerning the following steps, the commissioner stressed the importance of approving the third liberalisation package, otherwise he said this would “destroy our credibility“. Another issue he mentioned was the Second Strategic Energy Review adopted in November 2008, which, according to him, should give a “good basis for next steps that are needed for the EU to guarantee security of supply and at the same time fulfil the objectives of sustainability and affordability”. 

Klaus Kleinekorte, CEO of RWE, stressed the need to create an “adequate” transmission grid in Europe that would be able to ensure the security of supplies. 

Kleinekorte, who is also chairman of a working group on operation and security at UCTE, the Union for the Co-ordination of Transmission of Electricity, said there must be “a proper mix between generators and grids”. 

Development of wind farms is a good thing, he said, but it must go hand in hand with infrastructure, he explained. 

Kleinekorte took lengths to explain the functioning of the so called “copper plate” technology which reduces power losses on transmission lines. Indeed, up to 50% of electricity can be lost in long distance transmission, he pointed out, noting the massive scope for improvement there. However, “copper plate” technology is highly expensive, the UCTE member said. Meanwhile, there is also an opportunity to bring generation closer to the consumption point, Kleinekorte added. 

Vladimír Tošovský, chairman of the board and CEO of ?EPS, the Czech transmission system operator (TSO), warned that generation capacities are decreasing in Europe, while consumption keeps on increasing. “Today, we are not so concerned how much it costs but from what sources we will produce the energy”. 

Commenting on the single tariff proposal, he said that the current system brings about ineffective allocation. If the transmission is free of charge for the buyer, the power losses generate costs for consumers in the transit country who are not involved in the trade, he explained. 

Lord John Mogg, president of ERGEG, the European Regulators' Group for electricity and gas, expressed his scepticism regarding the proposal on a single tariff. In an interview with he said it was a “formidable objective”, but recalled that in the EU regulators were “absolutely split” in the debate on transmission charges. 

“When it comes to money and serious changes, and this would involve serious differences in revenue of different companies, you have major problems,” he said. He nevertheless saw the proposal as “appropriately ambitious for the presidency”. 

The Czech Republic identified energy security as one of the main priorities of its six-month EU presidency, and the recent Russia-Ukraine gas crisis confirmed that the issue was of highly topical significance. 

The Ostrava conference was intended to help identify topics for the Spring European summit. The conclusions of this conference are also meant to be used to formulate the new EU Energy Action Plan 2010-2012, the content of which the Czech Presidency will begin to discuss this spring. 

The event was opened by Prime Minister Mirek Topolanek, who holds the rotating chair of the EU presidency, together with Deputy Prime Minister for European Affairs Alexandr Vondra and EU Energy Commissioner Andris Piebalgs. 

Among the participants were leaders of the European energy industry (both producers and transmission system operators; TSOs) as well as representatives of the regulatory authorities. 

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