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Energy across borders cuts prices

By Paul Robinson - 06 Jan 2014 9:14:0 GMT
Energy across borders cuts prices

The idea of connecting the powerhouses of Europe has been delayed too long. Now, to bring down energy prices, and, looking at this diagram, to potentially sell more energy outside of the continent, giant undersea and cross-border "interconnectors" could refresh our interests in renewables; Europe image; Credit: © Shutterstock

Low energy prices can be created by a bigger market. To achieve this in Europe, many different patterns and even culture shave to be matched. With fracking in the air, and in the groundwater, prices are still unlikely to decrease. The threat of Russia's vast gas fields being restrictive on each national economy in Europe has driven Poles to American coal and others to renewable energy. Of course the fracking debacles of North American shale gas have to be avoided as renewables flower in Iceland, Scotland and, to some extent, Germany.

And the solution is the use of giant "interconnectors!" According to some, this will speed transfer of electricity across borders and coincidentally enable better use of temporary surges such as those from wind farms. The need to match US prices is key to this, as any European industry would be at an extreme disadvantage in international markets. Britain is urging a fast-tracking of inter-connector plans. Instead of being the future of power, these potentially influential networkers would fit together the jigsaw of Eastern Europe, Scandinavia, Spain and Portugal and more central Europe into a cohesive energy whole. The market presumably could then benefit from competition between different sources and methods. Going by the American price, European gas could then reach 33% of current charges and electricity would be 50%. Saving jobs, profits and costs at one stroke, the idea certainly seems a winner, if these advances can be implemented.

Small interconnectors connect the UK with France, the Netherlands and Ireland at the moment. To transmit real power in terms of gigawatts, lots of enlarged interconnectors, such as those planned between Germany and the Netherlands at the Meeden-Tiele border point are needed. TenneT control the power at both ends and intend to sell the extremely cheap German renewable energy (Germans will have 25GW of wind power by 2030, as noted in the article titled German energy) in the high-priced Dutch market. The Netherlands are also involved in the NorNed cable link and many others. They collaborated recently with the Belgian Elia on a 300 megawatt cross-border interconnector. New security software will also help encourage and optimise further collaborations.

Meanwhile, the IEA recently came out with the simple fact that US shale gas has cost Europe a severe competitive disadvantage as they look to lose 10% of their intensive industrial product market to the competition. Employment at the moment is an essential part of the mix as the International Energy Authority recommended "more efficient, competitive and interconnected energy markets," and warned of "huge costs in terms of employment."