GRIDS : DEVELOPMENT OF NETWORKS AT THE HEART OF THE ENERGY STRATEGY.

European leaders agreed at the Barcelona European Council in 2002, on a level of electricity interconnection between member states of a minimum of 10% of production capacities. Incidentally, this figure, which equates to billions of euro of investment, did not come out of any economic study or impact assessment! Currently, however, the EU is a long way from reaching that figure. Annual investment in cross-border interconnections comes to only 200 million, way down on the 30 billion that will need to be spent by 2013 in order to have completed the priority infrastructure projects on the trans-European electricity and gas networks.

The lack of interconnections is identified by the EU as a major obstacle to opening up energy markets and to the penetration of renewable sources of energy. In short, the European Commission had decided to take the bull by the horns by proposing, as part of its Energy Package of 10 January, a priority interconnections plan to facilitate investment in the sector. The challenge is a straightforward one: "If the EU continues on its present infrastructure course, none of its energy strategy objectives will be met."

WEAK LINKS IN THE CHAIN

The Commission is planning to act on several fronts. First, it has identified key infrastructure projects that have hit significant problems. In the electricity sector, there are eleven interconnections falling into this category: Kasso (Denmark)-Hambourg/Dollern (Germany); Hambourg/Krummel (Germany)-Schwerin (Germany); Halle/Saale (Germany)-Schweinfurt (Germany); St Peter (Austria)-Tauern (Austria); Sudburgenland (Austria)-Kainachtal (Austria); Durnrohr (Austria)-Slav tice (Czech Republic); Udine Ovest (Italy)-Okroglo (Slovenia); link between Poland and Lithuania; Sentmenat (Spain)-Becano (Spain)-Baixas (France), Moulaine (France)-Aubange (Belgium) and the underwater cable between the UK and the Netherlands.

In the gas sector, the EU is to create a fourth corridor' to diversify its sources of supply from the Caspian region. The Nabucco project, a pipeline that goes via Turkey, Bulgaria, Romania, Hungary and Austria, is a major priority in this respect. It does not seem to be facing any delays and should begin to be constructed in 2008 with a view to being up and running in 2011. The Commission notes that the GALSI gas pipeline project, connecting Algeria to Italy via Sardinia, with part of it going to France via Corsica, has been considerably delayed. The Commission also believes...