Today, the Commission adopted the EU-wide list of energy infrastructure priority projects till 2020. These so-called “projects of common interest” (PCI) have a strong cross-border component and benefit from accelerated planning and permit granting of maximum 3 ½ years by a single national competent authority.
EURELECTRIC welcomes the publication of the PCI list as a step towards extending and reinforcing the European electricity network. Grid infrastructure is the backbone of the EU energy system. Without stronger networks it will be difficult for Europe to reap the full benefits of the internal energy market, successfully integrate renewables into the system and enhance security of supply.
However, while reinforcing the European grid infrastructure is critical, policymakers should not lose sight of the bigger picture: the aim to achieve an EU-wide internal energy market. Yet according to the Commission’s latest quarterly power market report, the spread between day ahead, base-load German and Dutch power prices is increasing, peaking at €24.9 on 20 May 2013. This worrying development shows that existing cross-border grid infrastructure is not being used to improve market integration, but to ‘export’ unwanted side-effects of national policies, e.g. policies to expand wind and solar generation, to other European countries.
In addition, several recent market design proposals emanating from EU member states do not sufficiently address interconnector capacity, giving rise to concerns that Europe is moving towards a renationalisation of energy policy.
As such, Europe is not facing a ‘simple’ problem of technical capacity, but a larger one of energy policy and market integration. Grid reinforcement via PCIs should therefore go hand in hand with broader efforts to integrate wholesale markets, remove regulated end-user prices, integrate renewables into the market, and develop flexible gas markets.