What is “free movement of electricity”?
Just as we can travel from one country to any other, so freedom of movement for electricity would mean that power can go from wherever it is produced to wherever it is needed. However, while our travel depends on Europe’s rail, road and shipping networks, the movement of our electricity depends on the power grid.
Currently, however, the grid is not fully connected up between countries. This means that electricity produced in Spain (for example) mostly stays in Spain. In Germany there is not even complete free movement of electricity between the different regions. The grid also needs to be extended to places where power will be produced but there is no existing grid – such as in the North Sea.
Why is “free movement of electricity” so important?
At the moment, because of the insufficiently connected grid, most of our electricity is used in the same country in which it is produced. That means if demand in one area is greater than supply, electricity cannot be imported from another area and we may risk a blackout.
In a “single European market” with a fully connected European grid and free movement of electricity, the electricity would be bought and sold between different countries. This would bring electricity prices down, limit the risk of supply disruption by making better use of all Europe’s power plants, and help Europe meet its climate targets by bringing more renewables onto the system.
Why is it important to discuss this topic now?
The European Union has made progress in creating a European market in electricity (for example, by trying to end monopolies and creating rules to enable trade), but progress on the necessary grid infrastructure has been very slow.
Now the European Commission will publish draft legislation on the financing and permitting of electricity infrastructure this year. The draft will be discussed and amended by the European Parliament and Council for a few months before it becomes law. The outcome will be vital in determining if and when Europe will achieve greater freedom of movement for electricity. So it is important to make our voices heard now.
What has happened so far?
Before 1996: In many countries, one company was in charge of both producing electricity and running the electricity systems.
1996: The first EU electricity market liberalisation directive aims to gradually open the market up to competition.
2003: The second EU electricity market liberalisation directive enforces the legal separation of electricity transmission and generation.
2006: The European Commission launches infringement proceedings against Member States which have not fully implemented the second electricity or gas directives.
2007: The European Commission publishes an inquiry concluding that consumers and businesses are losing out because of inefficient electricity markets.
2008: The European Electricity Regulatory Forum proposes a roadmap for the integration of electricity markets up to 2015.
2009: The third EU electricity market liberalisation directive gives Member States options: full or partial separation of transmission and power generation activities. It provides for the creation of a group for grid operators and energy regulators with binding deliverables and tasks.
2010: The European Commission publishes a communication on ways to move towards a European grid and enable a single electricity market.
The grid operators, ENTSO-E, publish a draft Ten Year Network Development Plan, which is a first pan-European grid plan pinpointing seven regional investment clusters for a total cost of €23bn to €28bn across Europe up to 2015.
2011: The Heads of State agree that all Member States must be fully integrated into an internal electricity market by 2014.
Upcoming: The European Commission publishes draft legislation on what needs to be done in terms of electricity infrastructure to enable a single electricity market.
Useful links:
• European Commission communication on energy infrastructure priorities for 2020 and beyond
• European Wind Energy Association pamphlet on grids and the single electricity market
• European Wind Energy Association technical report on power grids
• Friends of the Supergrid group
• ENTSO-E Ten Year Network Development Plan
• Agency for the Cooperation of Energy Regulators (ACER)
• European Energy at a Decisive Crossroads – a EURELECTRIC statement
