You are here: Home » International » News » Economy
Business Standard

Billions spent on power linkages across EU not enough to keep Belgium warm?

European leaders have touted the single energy market since the 1990s, spending billions of euros for allowing power to flow across borders

Bloomberg 

SBI fixes plans for six stressed power assets; RBI deadline ends Monday

Of all the places expecting a risk of blackouts this winter, Belgium may be the most unexpected.

Bureaucrats from the European Commission in Brussels have crisscrossed the continent for decades promoting the idea that power cuts will be a thing of the past as a border-free market emerges in energy. Governments across the region have spent billions of euros improving electricity links, allowing power to flow across borders at times of need.

And yet it is Belgium, home to the commission, that is warning of shortages as cold weather sets in and boosts energy demand. That will test the very idea that any one nation can rely on its neighbors to provide electricity when domestic supply is under strain.

“Belgium doesn’t have enough interconnections,” Iberdrola SA Chairman Ignacio Galan said in an interview in London at the Bloomberg NEF summit on Monday. “I always criticize governments for having a lack of long-term planning.”

At the heart of the problem is the almost total shutdown of the nation’s nuclear plants. Belgium gets more than half its power from seven reactors, and in November just one will be operating. The others are out of service. All of them are 33 to 43 years old -- and originally designed to last four decades.

Elia System Operator AS Chief Executive Officer Chris Peeters said on Tuesday that Belgium is still facing a power shortage of as much as 900 megawatts next month, down from last week’s estimate of a gap of as much as 1,700 megawatts.

Early November remains a “critical” period as restart of the Tihange-1 reactor will help close the gap in the 2nd half of the month, he told lawmakers in a Belgian parliamentary committee. The nation will also need additional generation capacity for January to February, Peeters said.

Atomic Troubles

Belgium’s atomic troubles started last year. Then, a ceiling collapsed at a concrete building housing back-up power supplies at the Doel-3 reactor owned by the French utility Engie SA.

That alerted regulators to look for concrete degradation at other plants. The affected buildings across the network house diesel generators and emergency pumps needed to keep reactors safe in case the main power supply fails. Belgium requires these non-reactor buildings to be able to withstand a severe shock such as a plane crashing on top of them.

Aging reactors aren’t unusual in Europe, with the world’s oldest vessel in Switzerland turning 60 next year. But to keep the units going has proven to be both expensive and time consuming, sometimes requiring yearlong halts. Cracks in reactor vessels forced Engie to halt during the winters of 2014 and 2015.

Belgium can theoretically import a maximum of of 5,500 megawatts from France and the Netherlands, according to Elia. That’s still less than the nation’s nuclear capacity. Cables from Germany and the U.K. are under construction to improve connections further.

Few Big Plants

Belgium’s problems show the vulnerability of a power system that relies on a few large units. For now, the risk of blackouts is contained within Belgium. Germany, for example, wouldn’t suffer the same risk because it has a mix of renewables, coal, nuclear and gas-fired plants.

“Member States are responsible for ensuring a high level of security of electricity supply,” said Anna-Kaisa Itkonen, the European Commission spokeswoman for climate action and energy in Brussels. “The possible blackouts show how important it is to have good planning.”

European leaders have touted the single energy market since the 1990s. The commission spent years tearing down national barriers to trading electricity across borders. Those steps both connected physical grids and built up exchanges for trading electricity. Where nations once all maintained their own systems, there are now cables linking many of them, encouraging markets to dictate where and when power flows.

Brexit Warning

For Galan, it’s not only Belgium that lacks the proper planning.

“We have the same problem in Britain, where we have a similar situation of relying on interconnectors and not putting enough power into the system,” he said.

Britain’s decision to leave the European Union may stifle construction of further interconnections. And, being a net importer of energy, the nation needs them badly. While at least 11 new links are on the drawing board connecting the U.K. to neighboring countries, some of them may be undercut by rising tensions in the trading relationship with the EU.

There are some regional markets working very well. In an interview at the Bloomberg NEF summit in London, Energias de Portugal SA Chief Executive Officer Antonio Mexia, highlighted the integration in Iberia as a model. And the Nordic nations already have a joint system.

But there are also examples of the opposite. Co-operation in southeast Europe broke down in 2017 during a cold spell that saw nations from Greece to Bulgaria hoard power and refuse exports to neighbors. Episodes like that suggest Europe’s single market in energy has not yet achieved the ideal promised.

“It’s each for their own. We are not unified,” said Elchin Mammadov, a utilities analyst at Bloomberg Intelligence in London. “When the situation gets tight, each country will look after itself first.”

First Published: Tue, October 02 2018. 17:36 IST
RECOMMENDED FOR YOU