most critical projects of integrated plans and review permitting and siting support through regional collaboration and cooperation among EU countries. National and cross-national coordination mechanisms would foster integrated planning across value chains and technologies—for instance, power, hydrogen, and gas. In the fourth quarter of 2021, the European Network of Transmission System Operators for Electricity (ENTSO-E) and the European Network of Transmission System Operators for Gas (ENTSO-G) took an initial step to implement integrated planning by publishing, for the first time, joint scenarios for the 2022 Ten-Year Network Development Plan. These scenarios capture the interactions between gas and electricity systems to assess the infrastructure of an integrated energy system and optimize overall system efficiencies and flexible use. 2. Implementing demand-side measures to reduce peak energy loads and defer grid investments. Grid infrastructure costs are largely fixed, and the deployment of new transmission capacity is slow and costly. Any resource that could improve throughput for these assets at a lower cost and shorten their time to market could increase their overall societal value. The use of demand-side resources has been discussed at length in some markets—for example, the United States—as a way to augment grid capacity. Resources may include heating, ventilation, and air-conditioning (HVAC) systems using thermal storage to preheat buildings; the optimized charging of battery electric vehicles; the time (and location) shifting of data center computing loads to areas where the grid is less stressed; traditional industrial load curtailment; and
ability to balance the grid through interregional connections between generation sites and demand centers. 2. Gas. The European Union is responding to the energy market disruption that followed the cuts in Russian exports by seeking to increase its liquefied-natural-gas regasification capacity. Russian pipeline gas imports, which accounted for 36 percent of total EU gas consumption in 2021, were down by more than half in 2022. 17 In addition, the limited capacity of gas transport through pipes within Europe hinders the European Union’s ability to fully exploit the existing LNG infrastructure. Spain and Portugal, for example, have one-third of the European Union’s capacity to process LNG but lack substantial interconnections with the rest of Europe. Furthermore, an estimated 70 percent of the existing EU gas network must be updated to support hydrogen blending. 3. Integrated planning. National and cross- national coordination mechanisms could be strengthened to foster integrated planning across value chains, technologies, and countries. A lack of coordination might negatively affect supply resilience and could raise costs. 18 Key priorities To enhance the gas infrastructure and improve transmission planning, business leaders and policy makers could consider four key priorities: 1. Promoting integrated transmission planning and reviewing permitting and siting to accelerate build-out. Large- scale interconnection projects face long development times. Given the complex issues of siting new large-scale energy transmission projects, stakeholders could identify the
17 Gillian Boccara, Diego Hernandez Diaz, Berend Heringa, Ole Rolser, Namit Sharma, Thomas Vahlenkamp, and Cindy Xue, A balancing act: Securing European gas and power markets , McKinsey, April 25, 2023. 18 Policy toolbox for low carbon and renewable hydrogen—Enabling low carbon and renewable hydrogen globally , Hydrogen Council, November 2021.
Accelerating the journey to net zero
57
Made with FlippingBook Online newsletter maker