€200 billion is needed to upgrade Europe's gas and electricity grids over the coming decade, the European Commission said yesterday (17 November), adding that half of the sum will have to come from government coffers at a time of budgetary presssure.
The EU executive presented its energy infrastructure priorities for the next two decades.
It warned that the EU will not meet its goals on renewable energy, greenhouse gas emission reductions and security of supply without significant investment in cross-border interconnections and in integrating renewable energy into the network.
"We're still using the old territorial limits, which existed before the European Union," EU Energy Commissioner Günther Oettinger said, presenting the EU executive's communication. He pointed out that the EU is currently not able to transport energy from West to East or from North to South.
Only half of the required investment in energy transmission networks will be delivered by the market on time, the Commission said. "The other €100bn will require public action on permitting and leveraging the necessary private capital," it said.
Priority corridors
The Commission defined four priority corridors for electricity and three for gas where concrete projects eligible for European funding will be identified in 2012. These projects of "European interest" will also benefit from an accelerated permitting process with a time limit for the final decision, it said.
The EU executive said it would propose a new financial instrument in June 2011 to support the priority projects from the EU's next long-term budgetary period (2014-2020).
The electricity priorities include an offshore grid in the North Sea and a connection to transport power from wind parks to Northern and Central European cities and to hydro storage in the Alpine region.
Other projects are aimed at connecting the Iberian Peninsula with France, strengthening the regional network in Central Eastern and South Eastern Europe and integrating the Baltic energy market into the European market.
For gas, two priority corridors run North-South in Western Europe to remove internal bottlenecks and in Eastern Europe to boost Baltic market integration.
TheSouthern Gas Corridoris also given priority status to deliver gas directly from the Caspian Sea to Europe with the aim of bypassing Russia. It will also be discussed by the EU and the US at an upcoming summit in Lisbon.
Electricity 'highways'
In terms of a long-term strategy to decarbonise Europe's energy supply, the Commission proposes to establish a plan for the development of "electricity highways," the first of which could be commissioned by 2020.
These lines would be able to transport wind power from the North and Baltic Seas and solar power from the Mediterranean to major consumption centres.
The strategy also mentions planning for transport infrastructure for CO2 after carbon capture and underground storage technology becomes commercially viable, probably after 2020.