When it comes to energy industry changes, Europe is the market to watch. Long considered a leader in the movement towards adopting a low-carbon economy, the European Union is now making strides towards fundamental changes to the existing market design, which would potentially alter the way that the EU generates, stores, and uses electricity. If successful, we could see similar alterations made to markets closer to home in the years ahead.
The Promise Cross-Border Collaboration
A major component of the EU's proposed changes is the European Energy Union Project, which was created at the beginning of 2015. This plan proposes the use of power across borders in such a way that energy markets would be largely integrated. The end goal is to establish a free flow of both electricity and natural gas throughout all 28 of the union's bloc countries. This would instigate a surge in the generation of renewable energy from countries where it's already being taken advantage of while simultaneously bolstering energy security for neighboring states that struggle with becoming independent on imported fossil fuels.
Should the project work, the result could bring revolutionary changes to the entire continent which, until recently, was reliant upon national power grids. While Germany enjoys wind as an abundant and cheap energy source, for example, they currently are wasting valuable resources, as the energy cannot be stored. The introduction of a broad cross-country market would make it possible for the energy to be utilized by nations that need it rather than be thrown out as unnecessary surplus. Everyone wins!
Barriers to Overcome
What about days when the wind isn't blowing so much, though? How about periods of time when the sun isn't out for as long, and solar panels are impacted? Obviously the EU will need to come up with a dependable backup power source as a means of balancing the supply and demand within the grid. The combination of finding ways to interconnect energy markets and finding a reliable backup power source creates challenging and costly problems that the union will need to resolve before it can enjoy any success.
EU executives are estimating major investments of more than $200 billion a year for changes to energy generation and efficiency, as well as networks. Of this amount, roughly half will be allocated towards upgrading the aging electricity infrastructure of the continent and another $35 billion going towards the essential cross-border connections. As it stands, less than 1/3 of EU countries have a sufficiently thought-out and put-together strategy for national energy and climate planning.
Despite the many challenges, EU program proponents are pushing forward with plans and proposals for the upcoming year. Much is to be expected in the way of debate and negotiations. Reporting obligations to offer transparency and monitoring capabilities in the national planning for energy and climate are also under way. There may be obstacles to surmount and an unclear future for the European Energy Union Project, but one thing is for certain -- it's something to keep our eyes on.
Need more information on Europe's power grid and how what's happening might trickle to your own enterprise? Contact the professionals at NuEnergen and we'll give you every bit of detail you need.