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Europe's debt crisis slows push for green power

Source: Reuters - Wed 19th Jan 2011

The economic crisis has eroded the ambitions of the European Union's first energy summit next month to discuss a 1 trillion euro strategy for green power and high-tech power grids, a draft document shows.

Energy Commissioner Guenther Oettinger proposed the plan last November, aiming to bring Europe's climate ambition into the mainstream of infrastructure planning and to protect the bloc from over-reliance on costly fossil-fuel imports.

That strategy won broad support from outlying countries such as Portugal and Malta, and eastern states like Lithuania.

But energy ministers from the EU's biggest economies were reluctant to pick up the bill at a meeting in December, with Germany, France and the Netherlands saying new high voltage power links did not merit EU funding.

Those links would be needed to bring vast amounts of green electricity from wind turbines in the North Sea or solar parks in the Mediterranean to cities such as Paris or Prague.

A draft declaration for the EU's first ever summit of leaders to discuss energy issues showed further reluctance to fund a pan-European "supergrid" which would also be needed to dissipate spikes in wind and solar power.

"The bulk of the important financing costs for infrastructure investments will have to be delivered by the market, with costs recovered through tariffs," said the draft, seen by Reuters on Wednesday.

Budgetary consolidation and industrial innovation have also crept onto an agenda that was previously restricted to energy strategy. The meeting will be held on February 4.


Critics said leaving the strategy to the market would lead to a fragmented, inefficient and costly system.

Campaign group Greenpeace released a report on Tuesday showing that "intelligent" grid technology could allow Europe to get 68 percent of its electricity from renewable sources by 2030 and nearly all of it by 2050.

"We need a European approach, or we risk missing the opportunity of optimal integration of renewables, higher energy efficiency and lower energy prices," said Frauke Thies of Greenpeace. "Thousands of wind turbines have been temporarily shut off in Spain already, because the grid system was not up to it."

The draft summit declaration does, however, recognise that the market's quest for profit has not always led to the most efficient solutions for distributing gas and power.

Bottlenecks between Spain and France, for example, prevent Europe from benefiting from excess renewable power from Spain's huge investments in wind and solar generation, and from importing North African gas to Europe.

"Some projects that would be justified from a security of supply/solidarity perspective, but are unable to attract enough market-based finance, will require some limited public finance," says the draft.

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