Page 35 - bne monthly magazine October 2022

bne October 2022 Cover story I 35
to meet all its own needs. The CESA was a net importer of power in 2021, sourcing most of the 1.3 TWh extra from Norway and Sweden. The two Scandinavian countries exported 29 TWh in 2021, although most of this was to Finland, the Baltic States and some to the UK.
Finland is in the final testing phase of a new 1.7-GW NPP that should come online in 2023 that will reduce its own deficit from 21 TWh to 9.5TWh. That will allow Norway and Sweden to export an extra 10 TWh to the rest of Europe – water levels at Norway’s gigantic hydropower water reservoirs permitting.
The difference between what Europe generates and what it consumes is not large, but the problem with the power sector is supply and demand for power have to exactly match each other. If they don’t, in what is called a “frequency incident,” then the power stations are shut down, otherwise the equipment can be badly damaged.
Some countries are net exporters and some net importers, but the deficit between the two is very unevenly distributed. The biggest importer
of power in Europe is Italy, which imported 31 TWh in 2021 and is expected to import 30 TWh this year.
It is followed by Hungary's 8.7 TWh imports, rising to 9.1 TWh this year. The problem child in the family is Austria, which imported 3 TWh in 2021, but
that figure will leap to 8.1TWh this year, according to Swiss power company Burggraben and European network
of transmission system operators for electricity (ENTSO-E).
Together these three countries will need to import a total of 47.3 TWh of power in 2022, which is a lot more than the net 1.8 TWh the EU imported last year as a whole. It is also well beyond the 27 TWh that Norway and Sweden exported to Europe as a whole.
Proximity also plays a role as electricity doesn’t travel well over long distances so being close to the generator of power is important increasing the reliance on the Scandinavian exporters.
To make matters worse despite the growing tensions with Russia, German is taking coal-fired and nuclear power stations offline. Germany has shuttered its six NPP that that have a capacity
of 4GW and produce 35TWh of power as well as another 14GW (122TWh) of coal-fired stations, although Berlin recently said it will keep one reactor and 8GW (61TWh) of coal-fired power as a reserve.
In 2021 German was a net exporter of power selling 23 TWh, However, if it goes through with the plan to close all the NPP and coal-fired plants it would need to import 130 TWh, or 69 TWh
if it used all its reserve. Altogether Austria, Hungary, Italy, and Germany would need to collectively import some 100 TWh of power, according to bne IntelliNews calculations.
While the overall European power system is almost balanced between demand and supply, this group highlight are some very large discrepancies within Europe at a regional level. This shortfall normally would be covered internally within the EU, plus some imports and investment into new capacity that is ongoing, but this year the Russian-induced gas crisis will push the EU power system to the edge of what it can cope with as there is so little redundancy in the system.
With these problems Germany was the first to go to “warning” status on the EU’s three tier energy crisis system, as the impact of removing even a small amount of the power generation mix produced by Russian gas could have
a big impact.
The European Commission has also been working to head off disaster
and in May published its updated REPowerEU Plan in which it had already incorporated an increase in coal power (+105 TWh) and falling gas power (-240 TWh) without derailing EU climate objectives.
At the same time as 22% of Europe’s power is produced by gas-fired power plants, the EC plan to reduce gas consumption by 15% could
in theory reduce power needs by 120TWh, according to bne IntelliNews calculations. That would solve the problem.
However, whereas European Commission President Ursula von der Leyen initially called for the reduction to be EU-wide and mandatory, after
stiff resistance from members on the periphery of Europe, especially Spain, Portugal and Greece, the plan was massively watered down to be voluntary with calve outs and exemptions for 17 out of the 27 members.
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