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    Europe plans to strengthen its energy security with a common submarine network


    June 2, 2022 - CE Noticias Financieras

     

      By Nora Buli and Stine Jacobsen

      OSLO/ESBJERG, Denmark, Jun 2 (Reuters) - Northern European countries are discussing plans to create a common power grid under the North Sea connecting their future offshore wind farms in a bid to bolster the region's energy security, although the ambitious proposal faces funding and regulatory challenges.

      European countries have committed to building a dizzying number of offshore wind farms, partly out of a need to reduce their heavy dependence on Russian oil and gas following the invasion of Ukraine.

      "The more interdependent we are in Europe, the more independent we will be from Russia," European Commission President Ursula von der Leyen said during a May visit to the Danish port of Esbjerg, used by Europe's leading wind turbine manufacturers, Vestas and Siemens Gamesa.

      "We all know that green power generation is great. But if you really want to use it, you need a grid and that's where we need to step up," he said.

      However, it is unclear how huge amounts of green power can be exchanged across borders without saturating already overburdened onshore grids or creating a tangle of cables on the seabed.

      One idea being explored is offshore grids, with new wind farms connected to complexes or "energy islands", themselves linked by interconnecting cables that supply several European markets rather than just one.

      The Danish company Energinet is already looking into the possibility of connecting two energy islands in the Danish part of the North Sea and the Baltic with Germany and Belgium.

      Talks are also underway with Norway, the Netherlands and Germany about future projects, said Hanne Storm Edlefsen, who is responsible for the development of energy islands at Energinet.

      JOINT WIND FARMS

      Denmark, the Netherlands, Germany and Belgium announced plans in mid-May to build 150 gigawatts (GW) of offshore wind generation capacity by 2050, up from 15 GW today, a 10-fold increase in capacity.

      "What is completely new is that we see building renewables as something that is best done jointly," Danish Climate and Energy Minister Dan Jorgensen told Reuters.

      A North Sea grid saves money and helps manage output volatility, as wind production varies by location but usually follows a predictable pattern, said Chris Peeters, CEO of Belgian transmission grid operator Elia.

      "A lot of the weather phenomena, such as wind, tend to travel across Europe: you see them move from the Irish Sea to the North Sea and out into the Baltic," he told Reuters.

      An offshore energy complex also allows the wind power produced to remain offshore until it is needed by consumers on land.

      "We have this island, which collects the wind around it and takes it to the coast, or takes it to another complex that takes it to the coast in the country that has the demand at that time," Peeters said.

      This avoids overloading the onshore grid, a common problem in Germany, which is in the habit of paying Danish wind producers to shut down their wind turbines for a period of time to limit imports and avoid overloading its grid.

      WHO WILL PAY?

      Even so, the creation of a mesh grid will take at least a decade to build and will likely cost more than $1 billion, industry sources told Reuters.

      So far there is one hybrid cable in operation in Europe, connecting several Baltic Sea wind farms with Denmark and Germany, operated by Energinet and German grid operator 50Hertz, of which Elia owns 80%.

      Hybrid projects combine generation and transmission elements and connect two or more markets, whereas existing offshore wind farms have traditionally sent their power onshore via individual cables to a single country.

      It is also unclear who will be potential investors and develop these projects, which involve several countries and, in some cases, include the United Kingdom, which is not a member of the European Union.

      "The big problem is that all parties should have the incentive to join in the development of hybrid projects and currently this is not the case," said Ulrik Stridsbaek, head of regulatory affairs at Denmark's Orsted.

      Current regulations do not allow for the necessary cost and revenue sharing that would incentivize all parties to invest, he said.

      Despite this, Orsted, which has built about a quarter of the world's offshore wind farms, sees hybrid projects as crucial to unlocking the future potential of offshore wind.

      "We believe hybrids can be a huge time, money and hassle saver," Stridsbaek told Reuters.

      IT'S NOT COMPLICATED

      Several more hybrid interconnectors are planned across Europe, but the main obstacle is the lack of a clear European regulatory framework, according to Giles Dickson, head of industry lobby group WindEurope.

      "There is no point in continuing to build offshore wind to the huge volumes that states are now committing to, if you try to do it only through point-to-point radial grid connections," he told Reuters.

      However, such connections may be the short-term solution as Europe seeks a rapid ramp-up of its offshore wind capacity to replace Russian fossil fuels, said Soeren Lassen, a researcher at Wood Mackenzie.

      "I'm not sure that grid-grid is the near-term solution in the 2020s," he told Reuters.

      Legal hurdles remain and there is a risk of delays, Lassen added.

      WindEurope's Dickson argues that there is no need for a delay if the European Commission says what the regulation could look like.

      "It can be done very quickly if there is political will," he said. "It's not complicated."

      (Reporting by Nora Buli in Oslo and Stine Jacobsen in Esbjerg; editing by Gwladys Fouche and Emelia Sithoe-Matarise; translation by Dario Fernandez)

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