22 October 2003 09:56
EU/RUSSIA: POWER GRID INTERCONNECTION STILL A LONG WAY OFF
The Russians and Europeans are indeed engaged in a dialogue, but the debate seems to be taking on an air of over-excitement in Russia, particularly sine the Italian blackout. "The question of reliable electricity supplies has to be reconsidered", Viktor Khristenko said on October 16 in Moscow. True, but even though the Russians are rushing to extol the virtues of the interconnection of the European and Russian networks in terms of reliability, the Europeans are less sure, starting with the future accession countries, which are the first target of potential Russian electricity exports. The Russian representatives, and above all Anatoly Chubais, Chairman of Russia's electricity monopoly SEU (Unified Electric Systems), are seen by some to be guilty of doublespeak. The company's website recently reported that the company is ready to export 50 to 75 TWh of electricity a year (somewhere between the total consumption of Austria and that of Finland). The higher level of exports is described by the company management as the most important factor for promoting long-term financial stability and development. During talks with the Europeans, the Russian have stressed the symbolic value and the political dimension of the integration of power grids, and of course better security for the European system. Obstacles. The European Union's position is quite open and above board even if it refrains from recommending a timetable for simultaneous interconnection of the network. Instead officials point to two changes for the better. This first involves the preconditions for a political agreement: market operating reciprocity, environmental and nuclear safety reciprocity. The European Commission has been keen on this from the outset. Represented by Eurelectric, the European electricity industry group, confirmed on October 15 that it may not oppose interconnection with Russia but the Commission's conditions had to be mandatory. It stresses the need to add the reciprocity of social conditions, because when there is a fair market in Europe, the same conditions are required in Russia, Paul Bulteel, Eurelectric's Secretary-General told reporters recently. The technical issue is also in the melting pot. The transmission system operators (TSOs) in mainland Europe, represented by the Union for the Co-ordination of Transmission of Electricity (UCTE), speak of the need to determine the conditions governing interconnection. A large-scale study is to be launched shortly, managed by a joint structure supervised by the UCTE. The feasibility study covering simultaneous interconnection with the network of the New Independent States (NIS) is set to last three years and cost about Euro 4 million. The UCTE has undertaken a preliminary study to consider the present conditions of its interconnected network in the light of flows from Russia. The findings show there is not a lot of room for manoeuvre and the UCTE lines are already saturated. As is the case with each extension of the interconnected West European system (which already extends to Central and Eastern Europe), the NIS network has to be upgraded (the UCTE's) and this is likely to be a very expensive business. Interconnection with Russia is feasible only if Western Europe is interconnected with the other bordering NIS. The Russians have issued several official statements to say they have NIS authorisation showing these countries' explicit agreement. However, the Europeans have yet to see anything really formal appear. The ball is now in the Russian court, because, in the final analysis, Russia is doing the requesting, whereas the Europeans are said to be "interested". Mr Chubais has already said he would be able to arrange export to Europe of power that did not come from Russian power plants (i.e. not mixed with Russian-generated power) and he could prove the origin of such electricity. But it would be surprising if the EU were to make do with this pledge of good faith. -- Significantly different things are apparently being said by the two sides: the Russians want to make progress and are keen on having political decisions even before a technical assessment, whereas the Europeans are taking their time and withdrawing (without any official closure of the dialogue) behind a series of obstacles that have to be overcome. Ever since the idea was raised five or six years ago, Russia has failed to make any progress with the reciprocity conditions imposed by the EU. Moreover, as long as the technical feasibility study has not been completed (i.e. as long as some pretence can be made of ignoring reality) further declarations of intent are required and some series pressure will have to be applied on the Russian side. We will have to wait another four years to know how the interconnection process can be achieved and at what cost. In the final analysis, the market will do the deciding, with a fillip from the policy-makers when all the conditions are met for launching this huge project. --
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