RENEWABLE ENERGY:

Pricey 'supergrid' seen as key to offshore wind power in Europe

COPENHAGEN -- To exploit its offshore wind power potential to the fullest, Europe faces a tall task: building a €1.2 trillion supergrid that would connect wind farms in the stormy North Sea with hydropower plants in the forests of Scandinavia and with solar panel arrays in sun-baked North Africa.

The good news is that it would allow electricity to be traded easily across the entire continent. One possible downside is that it would have to be be the largest E.U. infrastructure project ever built and would require radical changes in energy regulation and investment, experts say.

The European Union is committed to generating 20 percent of its energy from renewable sources, increasing energy efficiency by 20 percent and reducing carbon emissions by 20 percent by 2020. Many experts say these objectives cannot be reached without a significant increase in offshore wind power generation in the North Sea.

But Europe's existing power lines are not designed to carry that power. They were built to transport electricity from a relatively small number of large power plants to cities and villages in the same country, with limited links between nations. Renewable energy, and especially wind power, presents a special problem, because it has huge potential but is intermittent. When the wind does not blow in one area, the lost power needs to be replaced with wind or other energy from another area.

"A supergrid is particularly important for offshore wind," said Christian Kjaer, CEO of the European Wind Energy Association. "We have an enormous resource in the North Sea that we need to tap, and the infrastructure is almost nonexistent now. This resource will be in the foreseeable future one of the biggest domestic resources we have left. We need to build the infrastructure that can carry it to where it's consumed."

In a bid to get 15 percent of its energy from renewable resources by 2020, compared with only 2 percent now, Britain is trying to encourage private investors to install up to 7,000 wind turbines in the North Sea as well as up to 9 gigawatts of tidal power.

A grid that can offset sudden power supply fluctuations

Denmark's DONG and Masdar, the green energy firm based in Abu Dhabi, United Arab Emirates, plan to build a 1,000-megawatt wind farm in the Thames Estuary near London, supplying 750,000 homes with the power from 341 turbines. Scotland alone has up to 25 percent of Europe's offshore wind, wave and tidal energy potential.

But tapping these resources would require a brand-new network of cables and interconnectors to bring the electricity generated offshore back to land. The existing onshore grid also needs to be modernized to cope with sudden changes in supply and demand and clear bottlenecks, allowing electricity to be traded between European countries.

It would allow countries such as Britain and Denmark to export wind energy at times of surplus supply, as well as import from other green sources such as geothermal power in Iceland. As things stand now, when Denmark has a surplus of wind power, it gives the power away for free to Germany and Norway. When the wind does not blow, Denmark has to import electricity from German coal-fired power plants.

"When there is more wind than power demand in Denmark, the export price goes toward zero," Kjaer said. "That's why we need the interconnectors. When you have very low prices, electricity should flow to a high-price area. The only way to do that is through interconnectors, but now the interconnector capacity is insufficient."

Bringing in North Sea wind power and solar generation from North Africa

With a well-functioning supergrid, a dip in power in one area could be balanced by higher production in another, making wind power more reliable and more profitable.

"Today's networks need to become more flexible, with a variety of renewable sources, more decentralized power generation, incorporating new energy demand technologies, such as smart metering, and able to meet new demand patterns, such as overnight battery recharging for plug-in electric vehicles," the European Commission said in its green paper on European energy networks late last year.

The commission estimated that up to €1.2 trillion would need to be spent to expand European electricity networks and increase grid capacity before 2030. Apart from bringing a massive amount of North Sea wind power online, the commission also wants to connect the Baltic states to Sweden and to bring to Europe power from renewable energy and natural gas in North Africa.

But building the grid would require a change in the thinking of Europe's national energy regulators, which currently are too focused on their own markets to help spur development of the many international interconnections needed to make the supergrid work. National legislation forces regulators now to worry about what is best for their countries, not what is best for Europe.

"To increase use of renewables and create a better-functioning international electricity market for Europe, investments are urgently needed," said Cecilia Hellner, secretary-general of the European Transmission Systems Operators lobby. "What is missing now is a more speedy process to get permits to install new lines. In Europe in general, it takes a very long time to get permits -- on average, seven years. To have a grid that can accommodate a large increase of renewables in 10 to 11 years, we need a much more rapid process."

Obstacle: national power systems not keen about competition

But Kjaer said the main barrier to getting Europe's grids working as a single, effective unit was that some of the biggest energy producers also own national networks and are not interested in increased competition.

"They don't want to import cheap power into their own area," Kjaer said. "There is no incentive to build new power grids. Vertically integrated power companies own plants and transmission systems, and anyone who wants to connect has to go through a competitor who also produces power. This is a structural deficiency, and we need complete separation between transportation and production. We need independent transmission system operators who decide on where to build lines based on profit potential."

Hellner argued that her organization's members are willing to invest, if only regulators would smooth the way. She suggested that investments in an improved grid could be a way of stimulating Europe's economy out of the recession.

"We never use in our vocabulary the word 'supergrid' because there is a European grid already and there are interconnectors," she said. "It's a well-functioning, high-voltage grid. But improving it should be an important element in the E.U. recovery plan. It could be used to kick-start the E.U. economy, given the recession."

The European Commission took a small step toward creating the supergrid last month, earmarking €35 million in research funds for North Sea power cables that would link offshore wind turbines. A second round of funding could be granted later this year to modernize electricity distribution in cities.

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