With change sweeping the European power industry as the integration of renewables gains pace, the debate on whether renewables should form a significant part of the future power generation infrastructure has moved on considerably. The question is no longer ‘if’ the transition will take place, but ‘how’.
This question of ‘how’ provides the central focus for this year’s POWER-GEN Europe, the leading event for power industry professionals. Taking place in Cologne, Germany from 3-5 June 2014, the conference will examine how integration, interconnectivity, and decentralisation are all essential in helping Europe move towards a low carbon future.
Nowhere has the scale and complexity of the challenge been more apparent than in Germany, where the ‘Energiewende’ has placed the delicate balancing act that Europe’s power industry must perform at the heart of business and political discussion. On the one hand, consumers want clean and affordable energy, politicians want reliable supply, greater interconnection and a single market for electricity; on the other, the rise in renewables is placing the margins of established utilities under immense pressure, whilst replacing conventional power with intermittent sources that ultimately are less reliable and more costly for the electricity system as a whole.
Certainly, utilities across Europe will need to reconfigure their business models moving forward. Their core expertise lies in constructing and operating plants, but they own assets across the value chain – i.e. power generation, transmission grid, and renewables. It will be vital for utilities to exploit this invaluable expertise and to position themselves more as enablers of the system, rather than centralised producers of power.
Decentralisation of the system is already apparent in Germany and other regions such as Scandinavia and Eastern Europe where municipal models are established. Outside these markets, other solutions will be needed. One option is greater cross-border interconnectivity, but this too can be a mixed blessing. Poland’s interconnection with Germany, for example, has seen the influx of surplus German wind power place its domestic power plants under extreme pressure.
The fact is that the European power industry has so far failed to put in place the necessary framework to support renewed investment in its ageing infrastructure. Add in the situation that modern gas-fired power plants across Europe are being mothballed or closed down because they don’t fit the current market model, and it becomes clear that the industry urgently needs renewed focus.
The economic slowdown has meant the political focus has been on financial markets, with energy pushed to the sidelines. But as the economy recovers and the banks become stronger, the power industry needs to ensure it doesn’t become the next industry in crisis. At a time when the market is in transition, and with ongoing conflict between European energy policies and those of individual member states, it is all the more important for industry professionals to come together.
To see the conference Grid-at-a-glance, please go to: http://s36.a2zinc.net/clients/pennwell/pge2014/CUSTOM/Handout/PGE%20Quick%20Grid%202014.pdf