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European Parliament urges member states to merge electricity grids

A fully integrated EU electricity market could cut bills by at least €2 per mega watt hour (MWh), saving users up to €40 billion a year, the European Parliament has said. 16 Dec 2015

EU countries would have to spend €150 billion to connect their national grids before this saving could be achieved, but if even 10% of electricity produced by each member state could be sent across borders that would create a "more resilient and robust network", the Parliament said in a non-legislative resolution.

A 10% target has already been set for 2020, but currently "12 member states...remain below [the 10% target] and are thus largely isolated from the internal electricity market", the Parliament said.

"A better interconnected EU electricity grid is key, both for more renewables and thus achieving climate goals, but also to make Europe more competitive through cheaper electricity prices", said rapporteur Peter Eriksson.

A shared electricity market between Austria and Germany has been a success, the Parliament said, but interconnection is most other areas is too low, and Baltic states are still "synchronised with, and dependent on, the Russian electricity system", the Parliament said.

Energy expert Becca Aspinwall of Pinsent Masons, the law firm behind out-Law.com said: "Fully integrating the EU’s electricity market by 2020 is an ambitious target, but one that could reshape the electricity market as we know it."

"The main barrier will be funding – who is going to pay for the €150 billion upgrade, particularly given that some interconnectors will be physically more challenging and have greater capital costs than others?" she said.

"The intelligence of the connected grids will be paramount to making this work – without smart grid technology, balancing the load and demand across such a large network will be impossible and estimated savings to customers bills wiped out," Aspinwall said. 

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