EC to invest €3.5 billion in energy security

The European Commission has unveiled a €3.5 billion plan to invest in its gas and electricity interconnections, wind technology, and carbon capture and storage to enhance its energy security.

Feb 4th, 2009

Uchenna Izundu
OGJ International Editor

LONDON, Feb. 4 -- The European Commission has unveiled a €3.5 billion plan to invest in its gas and electricity interconnections, offshore wind technology, and carbon capture and storage (CCS) to enhance its energy security.

The proposal is part of the European Union's economic recovery plan that the EC endorsed in December. The council is the body that defines the UK's general political guidelines.

After Russia stopped gas supplies to Ukraine because it failed to pay its debts on time, exports to the EU were affected, and Eastern Europe, in particular, strongly felt the impact as many of the countries had only one import gas pipeline from Russia, exposing the weakness of interconnectivity across the bloc.

The commission warned that, because of the financial crisis, it was unlikely that companies would invest in additional interconnections. It wants to spend €1.75 billion on LNG terminals and key strategic interconnections such as the Baltic Interconnection, a southern gas corridor, lines across the Mediterranean and through central and southeastern Europe, and a North Sea offshore grid.

"Energy infrastructure will play a crucial role, reducing dependence and increasing competitiveness," said the commission.

Under consideration are 20 gas and electricity projects that would have funding from the EU if a regulation to aid economic recovery is published.

Indigenous resources are decreasing, and Europe is becoming increasingly dependent on imports for its energy supply.

CCS promoted
CCS will be key to halving greenhouse gas emissions by 2050 and the Strategic Energy Technology Plan for Europe envisages the commercial use of technologies for the capture, transport, and storage of carbon dioxide.

"Five projects related to CCS will be supported by the recovery plan," the Commission said. "They each need a €250 million investment to ensure their launch. All the projects are at an advanced state of readiness so as to ensure the beneficial effects of the investment as soon as possible."

Neil Bentley, director of environment policy for lobbying group Confederation of British Industry, said the UK could take a lead in the development of CCS technology.

"The British government must now show real urgency and vision to ensure [that]UK CCS demonstration plants can be up and running as soon as possible," he added.

The government in the spring plans to announce the winner of its CCS demonstration project under which it will offer as much as 100% of the cost of the technology, which would be operational in 2014.

The competitors are E.On UK PLC, Peel Power Ltd., and Scottish Power Generation Ltd. The winner must use "post-combustion" technology to capture 90% of the greenhouse gases from the coal plant.

Contact Uchenna Izundu at uchennai@pennwell.com.

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