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    EU Releases Third Energy Union, PCI Reports


Brussels has published its third report on the state of the Energy Union, and the latest list of gas and electricity infrastructure projects eligible for EU loans and grants.

by: Mark Smedley

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Natural Gas & LNG News, Europe, Security of Supply, Energy Union, Carbon, Renewables, Infrastructure, Liquefied Natural Gas (LNG), Pipelines, Nord Stream 2, Trans-Anatolian Gas Pipeline (TANAP) , Trans-Caspian Pipeline

EU Releases Third Energy Union, PCI Reports

The European Commission (EC) published its third report on the state of the Energy Union, November 24 and also its latest list of gas and electricity infrastructure projects eligible for European Union (EU) loans and grants.

The 'state of union' report tracks progress made since the second such report in February 2017 concluding: “Europe's transition to a low-carbon society is becoming the new reality on EU's ground.”

This transition, however, will not possible unless infrastructure is adapted to the needs of the future energy system: “Energy, transport and telecommunication infrastructure are more and more interlinked. Local networks will become ever more important in the daily lives of European citizens, who will increasingly switch to electro-mobility, de-centralised energy production and demand response. Considerable achievements have been made, but bottlenecks remain particularly in the field of electricity. To address this, the EC adopted a Communication on the 2030 electricity interconnection target of 15%.”

PCI list has few surprises

The commission, as part of its package, adopted the third list of Projects of Common Interest (PCI) , also published November 24. PCIs are eligible for low-interest EU financing, and even grants. But as in previous lists, the Gazprom-led Nord Stream 2 project is omitted – the commission’s justification being it will not improve overall EU gas security of supply.

Still on the list are the LNG Croatia project at Krk, and similar projects in northern Greece and Ireland’s Shannon estuary, plus a 50% expansion of Poland’s existing 5bn m3/yr Swinoujscie terminal – along with a range of pipeline schemes, including the Southern Gas Corridor for Azeri imports (TCGP, Tanap, TAP), pipes to access new eastern Mediterranean gas – including one from Crete to mainland Greece – plus Interconnector Greece-Bulgaria, Malta-Italy, and Estonia-Finland (Balticonnector) to name a few.

EC still eying at inter-Irish energy trade

The commission also published national factsheets, including Germany’s which estimates the turnover of its renewable energy industry at €29.6bn. German think-tank AGEB however recently forecast that the EU’s most powerful economy is on course to emit more carbon dioxide (CO2) in 2017 than last year. The UK factsheet notes that the UK is a net importer of fossil fuels and electricity although to a much smaller extent than the entire EU, while not mentioning wider issues affecting Brexit, whose impact cannot yet be determined. It does however note that the Northern Irish electricity market is fully integrated with the Republic of Ireland "and thus addressed in the Irish country factsheet".

In this context, the EC also November 24 approved a joint capacity mechanism for the electricity markets of the Republic of Ireland and Northern Ireland, which it said would “help ensure that there is sufficient capacity to meet electricity demand at all times” on both sides of the inter-Irish border. The third PCI list also includes development of the Islandmagee gas storage project, near Larne, northern Ireland – for which UK-listed InfraStrata is seeking funds before Brexit possibly shuts the door on such funding.

InfraStrata was among the companies writing to the UK government this month to warn it of the reduced amount of storage capacity in the UK with the closure of the Rough field, and the risk that this would pose to the national economy.

Update November 27, 4pm:  InfraStrata CEO Adrian Pocock noted: "We are delighted that the hard work by ourselves, [partner in Islandmagee] Mutual Energy and the Irish governments in renewing our status as a PCI has been rewarded. We are also very grateful to the Innovation and Networks Executive Agency and the Infrastructure Department of the EU for their considerable efforts in securing this for the benefit of the Republic of Ireland and the UK. We continue to make encouraging progress on what has the potential to become a very important gas storage facility in the UK, following the recent confirmation by Centrica that the Rough storage facility is to close. The volatility of the price of gas is likely to be tested in the coming months if we suffer an extended period of cold weather, and it emphasises that once the UK leaves the EU, we will no longer be able to call on EU member states to supply us with gas, which is currently our lifeline in times of peak demand."