Highlights of the 2009 EURELECTRIC Annual Convention & Conference

CLOSING SESSSION

Adriean Videanu, Romania’s Minister for the Economy, Mr Videanu expressed his pleasure that EURELECTRIC had chosen to hold its 2009 Conference in Bucharest and gave unequivocal support to the message enunciated by EURELECTRIC president Lars G. Josefsson that a smart, integrated, low carbon energy supply should be our common objective for 2050.The Minister said that the four main themes chosen for debate at the conference were all of great importance and interest to Romania. On session 1 he emphasised that “the European electricity sector is already 45% carbon free and we are looking to a zero carbon supply by 2050.”Referring to session 2 of the conference, Mr Videnau noted that the key European energy objectives could not be delivered without “fundamental changes to the grid” – in other words “smarter grids will be essential.”Mr Videanu stressed that energy supply security means not only secure fuel supply but also reliable and available power plants and modern transmission and distribution networks. All this will require vast investment – some €1.8 trillion in Europe over 30 years – so it is “essential that capital markets do not restrict ability of the electricity industry to deliver,” and we “must remove obstacles to investments” he underlined.Mr Videanu concluded by emphasising that politicians have a duty to support energy companies in meeting the ambitious goals by playing an active role and motivating citizens to take seriously the vital European energy goals as well, in everyone’s interests.

Wrapping up at the end of the conference, EURELECTRIC Secretary-General Hans ten Berge reminded the audience of the range of multiple challenges facing the electricity industry in Europe, arising from the new EU legislation coupled with the practical realities of delivering a secure, carbon-neutral and competitive power supply to customers. He singled out from the wide-ranging and comprehensive debates a number of key points to underline. He reiterated his deep conviction that we should not have any fixed targets for developing renewable energy after the current 2020 deadline. “RES should take its place in the market alongside other power generation options and RES-power should be traded freely across Europe. The signal for cost-effective deployment of low-carbon power sources should be sent though the emissions trading system, which should serve to deliver a carbon price – both in Europe and worldwide through linked international carbon trading systems,” he told the audience.

Looking at the integration of RES into the system and the related network issues that are arising, Mr ten Berge said that grid development will be better incentivised if transmission operators do not receive congestion rents –which is likely to encourage the status quo – but operate on a “bonus-malus” system – being rewarded for making investment to remove the congestion in a timely manner and being debited the cost of congestion when they do not.

The EURELECTRIC Secretary-General underlined the clear conclusion that the grids – indeed the whole system – “will have to become smarter if the electricity industry is to fulfil the vision of a smart, integrated, carbon-neutral electricity industry by mid-century.” The system needs to be smarter and the regulation needs to be smarter too. He welcomed the words of one regulator speaking at the conference, who believes this and is working to “properly recognise the external benefits of smart grid development.”

Referring to the current financial and economic crisis, he reminded the delegates that supply security - keeping the lights on - can only be maintained if we can attract investment into our industry. “For electricity companies in a competitive market system, investment decisions must be business decisions.” Policymakers are there to “set the direction through legislation and the basic regulatory framework. They must then let the market work and let companies deliver,” he underlined. In the new competitive system, electricity companies are encouraged to follow business logic rather than focussing on supply security as the sole goal, he reminded the audience.

In this context, he stressed that fossil-fired power should remain an option for electricity companies in meeting demand for power, which means that carbon capture and storage (CCS) technologies – enabling the use of coal-fired plant while helping to meet the EU carbon-reduction targets – “will be of crucial importance.” He drew attention to the number of CCS projects under way across Europe, as evidenced by the exhibition on CCS running parallel to the conference. “There is a real chance that CCS will play an important role in the total power delivery picture as the European demonstration programme yields its results and allows companies to make rational choices on how best to capture and sequester CO₂,” he said.

Mr ten Berge promised to take away from the conference many important lessons and many ideas for the ongoing EURELECTRIC policy work.

Closing, he thanked the Romanian power industry who had hosted the conference, the Romanian Economics and Energy Ministries who had been so supportive of the event, the supporting organisations in the energy and related fields and also main sponsor Accenture for their loyalty through several years and their useful contribution to structuring the debates. Finally he invited all present to attend next year’s EURELECTRIC Convention and Conference in Dublin on 14-15 June 2010.