The European Union has drafted new rules for grid project approval procedures, seeking to significantly reduce wait times in a bid to alleviate the energy cost burden on businesses.
According to a Reuters report citing draft documents produced by the European Commission, the deadline for approving grid projects will be cut from up to 10 years to two years. Approval will be automatic if the respective regulator does not issue one.
The plan to fast-track grid projects was made public earlier this year, with European Commission President Ursula von der Leyen saying in September, “our energy prices remain still too high, too volatile, and too disparate across Europe. In some Member States, electricity costs three times more than in others. And many price spikes could be avoided if energy could flow more freely to where it is needed.”
The Commission’s solution to the problem is to install more interconnectors to send electricity across borders within the European Union. The buildout of interconnectors will be planned centrally, including an idea to request proposals for such projects if companies do not submit them voluntarily.
The Commission has allocated a budget of 30 billion euros ($35 bln) until 2034 for the grid endeavor, arguing that this investment would help bring down electricity bills by reducing the need to curtail wind and solar output during periods of high generation and low consumption by exporting the surplus to a region with higher demand.
Critics note that a grid buildout may actually end up adding to electricity bills because of the size of the investment needed and there are questions about the efficiency of the solution since transporting electricity over great distances is accompanied by losses that add to the cost of transporting it. Further, environmentalists have expressed concern about the idea of the Commission to drop the requirement for environmental assessment before a project is given the go-ahead, in an effort to speed up new wind and solar capacity additions.
By Irina Slav for Oilprice.com
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