Nations have long relied on one another to balance the supply and demand of energy. This is particularly true for Europe. Italy and Malta, for example, rely on imports for over 75% of their energy needs, while Denmark produces enough energy to be a net exporter.
The stable output from fossil fuel and nuclear power stations previously dominated the trade of energy across Europe. This made managing supply relatively straightforward regardless of differences between national energy policies. But the continued growth in renewable generation and move away from fossil fuels is changing this picture. European countries are now becoming more reliant on each other for a more balanced supply of electricity and the need for shared energy policies across Europe is increasing in importance.
Europe has for decades had common policies on a huge range of areas including agriculture, defence and border controls. But the first comprehensive Europe-wide energy strategy – formally called the ‘Energy Union Strategy’ – was only launched early last year, by which time it had become clear that establishing more secure, competitive and cleaner energy across Europe was no longer optional.
“After a decade without progress, member states have realised that resistance to shared policies doesn’t work”
The motivation behind the Energy Union Strategy’s approval was not much of a secret. Europe is highly dependent on Russian energy, importing over a third of its crude oil and nearly 40% of its total gas from the country in 2013. Uncertainty over Russian energy contracts following Russia’s annexation of Crimea in early 2014 and the subsequent risk of disruption to gas supplies from Russia highlighted the fragility of Europe’s energy infrastructure.
Not a lot can change in the short term. Every year until the mid-2020s, Europe is contractually obliged to buy the equivalent of around 75% of the gas it imported from Russia in 2013. Despite this, Europe recognises the need to work together to ensure it has tangible alternatives to Russian imports in the medium to longer term. Renewables aren’t the only option; others include increasing investment for liquefied natural gas (LNG) infrastructure and decreasing demand for energy by improving efficiency measures. With geopolitical events acting as a catalyst, EU member states suddenly found themselves able to put the finishing touches to a common strategy for energy that had been without any real traction for years.
Thankfully, there is also a positive reason why European countries are working together. The EU’s leadership in climate change mitigation means a shared commitment to reduce emissions by 40% by 2030 from a 1990 baseline. This led to a shared target of generating 20% of energy from renewable sources by 2020. Having common targets for both emissions reductions and renewable generation lends much greater force to collaborative efforts.
Agreeing a common energy strategy is one thing, but successfully implementing it is another challenge altogether. Fortunately, European research is already highly collaborative among member states, with much pooling of resources to increase efficiency and to avoid duplication of efforts. Joint work on energy innovation has been happening for decades, and now provides the underpinnings that will enable the common strategy to succeed.
Just one example can be found in collaborative projects on the electricity grid. Interconnectivity of grid systems is of course critical to efficiently balance energy across borders and a headline target of the Energy Union is for all countries to achieve 10% of electricity interconnection by 2020. For some, this is already being achieved. When high winds mean Danish wind turbines alone produce more energy than meets the country’s electricity needs, the excess power can be shared with neighbouring countries for use or, in the case of Norway, stored for later use.
A recent collaborative research project involving 18 member states made significant advances in helping Europe to become more connected by a ‘smart grid’ – a dynamic system in which electricity can flow to meet localised changes in supply and demand. Several months of real-world observations tested the impact of renewables on power quality across different weather conditions and seasonal load changes. The collaboration has provided significant insights into the effect of renewables on power quality and led to the development of cost-effective methods to ensure fair trading of energy between countries.
“Having common targets for both emissions reductions and renewable generation lends much greater force to collaborative efforts”
For others, the target is more challenging. Some states like Cyprus or Malta have little to no interconnectivity capacity, and being an island makes plugging into the European grid much more expensive. Proposals like the ‘EuroAsia Interconnector’ propose linking Greek, Cypriot and Israeli grids, but will cost upwards of €1.5bn and won’t be fully implemented until at least 2022. Clearly, a successful energy union needs to recognise that there is no ‘one-size-fits-all’ solution and consider differing regional challenges.
As well as collaborative research, other joint programmes have built on existing Europe-wide standards to create a level playing field for new innovations. One example is the EU’s Environmental Technology Verification (ETV) scheme, which provides independent testing to verify performance claims so that SMEs can prove their technology to customers and investors. Being able to complete a single verification that is then valid across the whole of Europe reduces the costs to innovative European SMEs and accelerates the commercialisation of their products.
After a decade without progress on a common European energy policy, member states have realised that resistance to shared policies doesn’t work in the new environment. The need to tackle climate change, create a healthy and competitive market and ensure security of supply rely on collaboration beyond the sharing of ideas and occasional peeks over the garden fence.
But as well as adjusting to a shifting geopolitical landscape and climate concerns, energy union provides an opportunity for Europe. Collaborative research has already shown that innovation and efficiency is cultivated by cross-border research. By working together strategically, Europe can ensure that the whole becomes much more than the sum of its parts.