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Ten-Year Network Development Plan 2017 Main Report
7.3.2 ENERGY TRANSMISSION
Energy transmission and a well interconnected EU, allowing energy to move to areas
of need or offer competition, is one of the key elements of the European Commis-
sion energy strategy and achieving the completion of the internal energy market.
Gas is an extremely efficient way of transporting energy and the transmission
network has been designed to transmit energy over long distances, with minimal
losses as a result. Equally, it offers a cost efficient method of energy transmission as
shown in a study
1)
comparing the Bacton-Balgzand gas pipeline and the BritNed
electricity interconnector. Both projects connected the UK to the Netherlands, with
the gas pipeline traversing a distance of 230km compared to 260km for BritNed,
and both projects cost in the region of €600m. However, the gas pipeline has a
capacity of 20GW, twenty times that of the electricity interconnector, reducing the
cost per kw /100km to €11 versus €230.
The cost of energy transition is already being felt in some countries that are moving
at pace to high shares of renewable generation in the power sector. A study from the
Düsseldorf Institute for Competition Economics on the German transition
2)
, which
has involved the abandonment of nuclear power, highlights the substantial costs by
2025 for just the electricity sector. This is not only from the development and support
of the renewable technology itself, but also the required expansion of the transmis-
sion and distribution networks. They calculate the cost for an average four-person
household in contributions to this development could cumulatively exceed €25,000
by 2025. This comes at a time where fuel/energy poverty
3)
is becoming an increas-
ing concern across Europe, for example in England
4)
in 2014 an estimated 2.4 million
households (10.6% of total) were considered in fuel poverty by the UK Government,
highlighting the need to consider energy transition in the most optimal and cost
efficient way.
One factor that can influence costs in the electricity transmission sector is the choice
between overhead and underground lines. Although new overhead lines seem to
offer the lower cost solution
5)
, land use must be taken into account and the fact that
they are generally publically opposed for health concerns and aesthetic reasons. As
a result, overhead powerline projects are often subject to cost increases and/or
delays. The gas network is available as a means of energy transmission that avoids
the issues highlighted above and without the need for significant investment.
1) Source: DNV-GL presentation “The Changing Role of Gas as a Sustainability Enabler 2016” based on Gasunie data.
2)
http://www.insm.de/insm/Presse/Pressemeldungen/Pressemeldung-Studie-EEG.html3) For statistical purposes Fuel poverty in England is measured using the Low Income High Costs indicator, which consid-
ers a household to be fuel poor if: they have required fuel costs that are above average (the national median level) and
were they to spend that amount, they would be left with a residual income below the official poverty line.
4)
https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/557400/Annual_Fuel_Poverty_Statistics_Report_2016_-_revised_30.09.2016.pdf
5)
https://setis.ec.europa.eu/sites/default/files/reports/ETRI-2014.pdf