“If the EU is to meet its CO2 reduction and renewables targets, improve security of supply and create real competition in the European power market, we need to extend our power grids and change the way we operate them,” Arthouros Zervos, President of EWEA, said at the European Wind Energy Conference (EWEC) in March.
An extended grid with changed operating procedures is necessary to rejuvenate the EU’s power system, and will help reduce its operational costs whether more wind is added or not. An upgraded grid would also allow larger amounts of wind onto the system. As such, it would go a long way in helping the EU meet its 2020 targets and make electricity more affordable for consumers, the EWEA predicts.
Wind the most cost-effective
“At current fuel prices, electricity production costs from a new windfarm, coal plant and gas station are more or less the same. If a truly interconnected European grid existed and power markets were effective, the uncertainty of volatile carbon and fuel prices would ensure that wind, which avoids these unknown quantities, would become the most cost-effective of the three,” explained Zervos. “We need the power markets to work to ensure that future investors are fully exposed to fuel and carbon price risk.”
Moreover, EU power markets currently remain biased towards traditional fuels because they are dominated by vertically-integrated power companies, according to the association. The European Commission’s third liberalisation package, currently being negotiated by the European Parliament and Council, aims to open markets up more by at least partially separating production and transmission activities. For a truly competitive market, the full ownership unbundling of the vertically-integrated power companies is necessary.
Priority for renewable energies
In the new Renewable Energy Directive, electricity from renewable sources has been guaranteed priority dispatch and priority access to the grid. In the absence of full unbundling, priority access and dispatch are both extremely important for the sector. However, there are still issues such as bottlenecks (where parts of the grid are used to their full capacity) which restrict access to cheaper generation resources such as wind power.
Some of the grid-related issues are addressed in a report from the TradeWind project: Wind Integration: developing Europe’s power market for the large-scale integration of wind power.