EU's energy grid plans revealed in leaked draft

Mon Nov 15, 2010 11:41am GMT

* Thousands of km of pipelines envisaged for CO2 disposal

* EU wants up to 90 bcm of gas a year via southern corridor

By Pete Harrison

BRUSSELS, Nov 15 (Reuters) - Europe's energy chief will this week reveal his blueprint for massive new gas pipelines, high-tech "electricity highways" and up to 8,000 km of pipes for transporting and burying greenhouse gases, a leaked draft shows.

Energy Commissioner Guenther Oettinger last week issued a warning over gas and oil imports and unveiled a strategy for investing 1 trillion euros ($1.4 trln) over the next decade to bolster energy security.

On Wednesday, he will add detail to that strategy by launching a second report: "Energy infrastructure priorities for 2020 and 2030 -- a blueprint for an integrated European energy network".

Oettinger has received support for plans, in a leaked draft of that blueprint, to build "electricity highways" to distribute vast amounts of electricity generated by windfarms in the North Sea and solar power parks around the Mediterranean.

But a vision of thousands of kilometres of pipelines to transport carbon dioxide from power stations and bury it in depleted gas fields faces a mixed reception.

Critics point to a recent study commissioned by Oettinger's team, which found that carbon capture and storage (CCS) technology might barely get past the testing phase before a widespread shift to green power lowers the carbon price and destroys incentives. [ID:nLDE68F16Z]

Green group politician Claude Turmes said CCS would need heavy taxpayer subsidies unless the carbon price in Europe's cap and trade scheme were to reach 60-80 euros per tonne, compared with about 15 euros today.

"It's a non-proven technology," he added. "There are easier and less costly potentials in renewable energy for reducing Europe's carbon footprint and enhancing its energy security."

For a summary of the leaked draft, click here: [ID:nLDE69R23T]

SOUTHERN CORRIDOR

Others in Europe's energy debate counter that CCS is too important a technology for cutting greenhouse gas emissions for it to be ignored.

"CCS may account for roughly 12 percent of emission reductions by 2030 and 22 percent by 2050," said Giuseppe Lorubio of power industry body Eurelectric. "This clearly tells you how important CCS is for our sector but for the industrial sector too."

The plan also envisages major north-south electricity cables to carry renewable energy from the North Sea and Mediterranean to central Europe, helping dissipate spikes in production that might otherwise overload local networks.

"We really need a European market for renewable energy to help offset its intermittency, and interconnections are a primary condition for that to develop," said Eurelectric's Susanne Nies.

The shift towards lower carbon energy sources also looks set to benefit gas producers such as Russia and Azerbaijan as Europe strives to limit coal consumption and hit targets for lowering CO2 emissions to one fifth below 1990 levels over the next decade.

Dependency on gas imports will increase from around 60 percent today to reach 73-79 percent of gas consumption by 2020 and 81-89 percent by 2030, says the draft.

As Europe's top gas supplier, Russia currently provides about a third of that, but efforts are underway to prevent that share from growing -- mainly by developing a "southern corridor" for gas imports from the Caspian region.

"The strategic objective of the corridor is to achieve a supply route to the EU of roughly 10-20 percent of EU gas demand by 2020, equivalent roughly to 45-90 billion cubic meters of gas per year," says the draft.

That is one of the clearest definitions yet of what the EU hopes to achieve in the Caspian region.

(Reporting by Pete Harrison, editing by Jane Baird)