Navigant Research Blog

Europe Spends Billions to Fill Transmission Gap

Anissa Dehamna — June 15, 2012

Frequently, Europe is cited as one of the best markets for energy storage, especially bulk energy storage.  The key drivers for energy storage in Europe center on the region’s rapidly changing energy mix and its ambitious renewables targets.  It’s certainly true that Europe is integrating an impressive amount of renewables, especially intermittent renewables such as wind and solar PV.  Not only will this cause instability on the grid locally, but there will also be congestion issues to deal with as electricity travels along energy corridors in Europe.  This will tax infrastructure, creating significant opportunities for energy storage in Europe to help maximize transmission and distribution infrastructure.

However, the fact is that European officials have seen the writing on the wall, and companies and the EU are investing heavily in infrastructure that can cope with the intermittency and volatility of increased renewables on the grid.  Most of this funding will come via the European Network of Transmission System Operators for Electricity (ENTSO-E), an association of transmission and distribution operators that was formed in 2008.  As shown in the table below, some €104 billion ($130 billion) will be spent on pan-European transmission and interconnection projects over the next 10 years.  That investment in transmission and distribution will reduce the need for extensive storage installations, making Europe a less attractive market for energy storage than it might seem.

Investment Cost Breakdown for Pan-European Transmission Projects 2010-2020
Billion €
Billion €
Austria 1.1 Ireland 3.9
Belgium 1.9 Latvia 0.4
Bosnia-Herzegovina 0 Lithuania 0.7
Bulgaria 0.2 Luxembourg 0.3
Croatia 0.2 Montenegro 0.4
Czech Republic 1.7 Netherlands 3.3
Cyprus 0 Norway 6.5
Denmark 1.4 Poland 2.9
Estonia 0.3 Portugal 1.5
Finland 0.8 Romania 0.7
France 8.8 Serbia 0.2
FYROM 0.1 Slovakia 0.9
Germany 30.1 Slovenia 0.3
Greece 0.3 Spain 4.8
Hungary 0.1 Sweden 2
Iceland 0 Switzerland 1.7
Italy 7.1 United Kingdom 19

(Source: ENTSO-E)

As a part of its unique cooperative approach to energy policy, the European Union has recognized that increases in demand, decommissioning nuclear power plants, and sharp increases in intermittent renewables will require additional investment in transmission infrastructure and greater interconnection throughout the continent.  Approximately 100 projects have been identified and nearly 52,000 kilometers of transmission will be built or refurbished.  The figures above do not include projects of national or regional importance, only projects that will affect greater Europe.  Significant national-level spending and upgrades are expected, for example, within Germany.  Spending levels by nation reflect population size and the need for renewables integration, although Ireland will be investing a great deal to shore up interconnections and will spend a disproportionately high amount over the next decade.

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