EU policy-makers should scrap the Emissions Trading System and replace it with new binding long-term targets for specific clean energy technologies and boost interconnection, Eddie O'Connor, president of the Friends of the Supergrid said Tuesday.
Friends of the Supergrid is a group of energy companies, power grid operators and renewable energy equipment manufacturers that proposes linking offshore wind farms in the North and Baltic Seas to form the basis of a new pan-European power grid. O'Connor, who is also chief executive of Irish generator Mainstream Renewable Power, was addressing the group's annual conference in Brussels.
"The ETS must be abandoned as soon as possible and replaced with something that gives a clear signal for low-carbon investment," he said.
His comments came just weeks before EU lawmakers in the European Parliament are due to vote April 15 on a proposal to "backload" EU emissions allowances from the next few years to 2019 and 2020 in an effort to shore up the flagging price of EUAs, which has fallen from highs of Eur30/mt to less than Eur4/mt ($5.20/mt) now. This is mainly because of lower industrial production during the economic crisis.
"The strongest condemnation of the ETS is what is happening with imports of US coal
," O'Connor said.
"This is the perverse consequence of the system, that European emissions [from power generation] have actually risen in the last couple of years. And yet the mirage of clean coal has already now been dented in countries as different as Canada or the UK, where carbon capture and storage has been all but abandoned because it is neither scale-able or economic," O'Connor said.
He said German plans to extend the power grid out into the North Sea along with UK plans for a major expansion in offshore wind farm off the eastern coast presented the perfect opportunity to integrate the grids of t
wo of the EU's biggest markets.
"This should be a primary goal in the next year: to get the two governments working together, so that what is created is compatible with a future Supergrid," he said.
This would allow the two countries to balance out some of the fluctuations in their growing intermittent renewable sources like wind and solar and in the short term would allow them both to access each other's flexible gas or coal-fired generation to ensure greater security of supply.
"What happens when the sun goes down in Germany? If you're linked to Britain you can share the cost of back-up coal and power plants during the transition," he said.
Once the German and UK power grids were linked, O'Connor said, the next priority would be to integrate the Dutch, Belgian, Danish and Swedish grids via links to offshore wind farms.