The Commission wants to overturn the EU energy consumption structure and to align TEN-E to European New Deal.
It wants to do it by changing the rules of the EU Trans-European Energy Networks (TEN-E). How? By giving funding and priority to electricity infrastructures and nothing to gas and oil pipelines. TAP and NordStream 2 at risk? Who will produce and how all the electricity needed? Denmark builds an artificial island and is a candidate to supply Europe with all the electricity it needs. A true revolution for the energy consumption.
When in 2019 the Commission presented its Strategic Plan to fight the Climate change, few thought that it would go far beyond the slogans of the new global environmental movements.
Especially in a Europe, where we are discussing since the 1990s how to liberalize the gas and electricity markets! Only few years ago, (and not everywhere!) the consumers have been able to choose his electricity (not gas) suppliers (national, not from other EU country!). Internal gas and electricity markets are not yet unified. Not to mention oil, where European oil companies are careful not to cooperate. Because they don’t need it and nobody asks them.
Therefore, in a very conservative Europe (of national interests) the European Green deal was greeted with a smile.
But there are several factors that suggest that, this time, european ambition may be stronger than the very strong conservatism of our energy market.
A real revolution: the electron
There seem to be signs that of a new revolution is coming.
Not triggered by a young lady and the new environmental movements. Nor for fear of climate change.
The revolution is triggered by the electron. Yes, triggered by one of the smallest fundamental particles! Yes, you are thinking about what another small entity is doing, the virus …
As the second industrial revolution had triggered, being able to replace the work provided by the steam or internal combustion engine, now the electron, being able to produce and store it more efficiently and with less environmental impact, can radically transform our societies.
But the EU has few levers to impose revolutionary plans. It can act within the small spaces granted by EU Treaties and national governments. And it developed the cunning of those who try to survive with little means. It therefore tries to modify existing EU legislation with new measures that can favour one development rather than another. Without imposing a real revolution. But favoring it.
Indeed, the EU has mostly failed until now to achieve its overly ambitious goals of having a single European energy strategy, of having an internal energy market worthy of the name and with regulators at European level.
Now, however, the EU is using the new life of the electron to indicate and facilitate a path that pleases the business world. That of selling electrons and no longer polluting raw materials subjected to the blackmail of the market.
Until a few years ago, the electron came out of power plants and had to be used quite immediately. Today is produced with a wide range of technologies, can be stored for a long time, can be boxed and transported, to use it where it is needed. For example, after years of being seen as a fringe technology, the battery electric vehicle market is finally approaching a tipping point. Thanks to the technology.
Thus, visionaries can rightly imagine that the electron will become a new raw material. But it already is.
So where is the news? The novelty is that anyone and any country in the world can produce and trade this raw material.
It is no coincidence that Denmark and South Korea plan to build artificial islands for wind power generation hubs. Not for itself. But to sell it to entire continents!
The situation in Europa and the Trans-European energy networks
Let’s think of a national electricity grid and multiply it by 27.
Now let’s think of a country’s gas grid and multiply it by 27.
Each country has all the infrastructures for the production of electricity, which is now built from fossil fuels, nuclear and renewable energy. Each country has conventional thermal and nuclear power plants and wind and solar energy infrastructures. Multiply this by 27.
Each country has its own oil and gas exploration companies, onshore and offshore. Import gas and oil with gas and oil pipelines or with tankers. Multiply this by 27.
This gives the dimension of the vastness and complexity of the 27 energy networks existing in the European Union.
Obviously, economies of scale are lacking, because each country must bear the same investments without being able to share costs, projects, development, research and innovation strategies with other EU countries.
That’s the reason why EU, with the aim of making investments more rational and achieving better economies of scale, has launched a strategic programme, the Trans-European Energy Network (TEN-E), with guidelines covering the objectives, priorities, identification of projects of common interest and broad lines of measures to be taken.
And many projects of common interest benefit from financial support of the European Union budget through the TEN-budget line as well as the Structural Funds and Cohesion Fund.
The new TEN-E Regulation
Last December the European Commission published its proposal to reform the Regulation in force, as it is expected to be every two years. The TEN-E provides a list of energy interconnection projects (PCI) among the 27 EU countries that can receive EU funding.
This time, the TEN-E regulation needs to be revised to closely align it with the ambitious climate neutrality goals of the European Green Deal, mainly by supporting the energy infrastructure that consolidates new and existing clean energy technologies. EU Commission adds by ending political and financial support for fossil-fuel related projects.
How could countries that always need to invest in infrastructure for gas (Germany, Italy, Austria, Hungary in prims), coal (especially Poland) and oil react?
It will be interesting to see how the Rapporteur in the European Parliament, a Polish MP from the ruling PiS party, will behave. And the shadow speakers from Austria (Renew Group), Netherlands (PPE), Poland (S&D), Italy (ID)
France (Greens) and Portugal (Left).
The 2021 TEN-E Revision Regulation COM(2020) 824 final is composed by a the proposal for Regulation and seven annexes:
Annex I – ENERGY INFRASTRUCTURE PRIORITY CORRIDORS AND AREAS
Annex II – ENERGY INFRASTRUCTURE CATEGORIES
Annex III – REGIONAL LISTS OF PROJECTS OF COMMON INTEREST
Annex IV – RULES AND INDICATORS CONCERNING CRITERIA FOR PROJECTS OF COMMON INTEREST AND FOR PROJECTS OF MUTUAL INTEREST
Annex V – ENERGY SYSTEM-WIDE COST-BENEFIT ANALYSIS
Annex VI – GUIDELINES FOR TRANSPARENCY AND PUBLIC PARTICIPATION
Annex VII – SUBSIDIARITY GRID
On 15 December 2020, the EU Commission published the new proposal for Regulation COM(2020) 824 final, in order to to revise the 2013 Regulation on TEN-E.
The Committee on Industry, Research and Energy (ITRE) of the European Parliament appointed MEP Zdzisław Krasnodębski (ECR, Poland) as Rapporteur and six shadow Rapporteurs. ITRE is expected to discuss the new Regulation probably on March 2021.
Then, there will be a vote on a draft report (ev. with amendments), followed by a negotiation with the EU Council with the EU Commission (trilogue). After the negotiations, the revised text will be voted on by the EP plenary. If a new amendment is introduced, the regulation is adopted. National parliaments should express their views earlier.
When the new Regulation will be approved as proposed by the EU Commission, the New Era of Electron can start in Europe, because the Regulation will stimulate important investments in electric infrastructure and electric production from renewables that energy companies of all countries are ready to make.