Saturday

4th Feb 2023

EU at risk of electricity blackouts

  • Europe is at risk of power shortages because demand exceeds investment in new power outlets, the consultancy says (Photo: European Community, 2006)

Europe is at risk of power shortages because demand exceeds investment in new power outlets, says consultancy firm Capgemini.

According to a study by the consultancy the UK, France, Belgium and Greece are among the countries with the lowest levels of spare capacity of electricity.

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Colette Lewiner of Capgemini said the study represents a "wake-up call" for the energy industry, governments and regulators. "We are in a dangerous zone now," she said, according to the Financial Times. "We could have power cuts."

European energy companies used to have high levels of excess capacity but in the last few years, investment in generators in most EU member states has failed to keep pace with the rise in demand of electricity, according to the study.

Capgemini said lower electricity capacity was partly due to the European energy market becoming more competitive and commercial.

Electricity generators across Europe have become more exposed to commercial pressures by the spread of liberalisation and private ownership, the consultancy said.

Investment in new power stations was also being hampered by complex planning procedures and by governments' persistent fiddling with regulations.

"How can companies plan for a 10 or 20-year return on investment when governments keep changing the rules of the game?" Ms Lewiner asked.

"It should be for national governments and the European Commission to encourage power investment in the energy industry," she said.

Capgemini counts among its clients more than 70 percent of the 30 ranked private and global utilities, as well as all five of the publicly held oil and gas "super majors", according to the company's website.

Energy efficiency

Earlier this week, the president of the European Commission Jose Manuel Barroso called on the EU to cut internal energy waste by 20 percent by 2020 to combat import dependency on countries such as Russia.

A commission action plan – due out next week - will propose new EU design regulations for household items such as boilers, TVs and light bulbs and suggest extending EU rules on energy-saving for building design.

Energy is set to be one of the key issues on the agenda when Germany takes over the rotating EU presidency in January 2007.

Hawkish ECB rate-rise 'puts energy transition at risk'

The European Central Bank raised interest rates by another 0.5 percent to a 14-year high, and expects to hike rates by another half percent in March. But what does that mean for the green transition?

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