The Grid Issue


June 18, 2012

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Last week at Global Offshore, aside from the standard statistical bun fight, there was some promising talk of cost cutting (both from government and from the industry body) and there were a handful of project updates and developments.

However, look a little closer and I’m not convinced that it was the turbines and the technology that, this time at least, was the real draw.

Rather, it was the escalating issue of the grid.

As we outlined last Wednesday, the global electrical interconnection market has already started to heat up and there are already a number of links underway and in development that now criss-cross the North Sea.

This, combined with Germany’s recent commitment to speed up its investment and expansion of its power network (enabling electricity to be carried from the coast, to the country’s industrial heartland), suggests that finally things are starting to get serious.

And in good time too. Currently there is approximately 4GW of offshore installed wind energy capacity operational in Europe; a figure that is expected to increase tenfold between now and 2020, if the continent is to hit the magic 40GW.

Whether it does of course, is a subject that’s very much open for debate, with the advocates and the anti’s arguing one way and then the other.

However, to get hung up on the semantics is to miss the point. A target is a target. And for as long as the industry keeps marching towards it, then the grid infrastructure and transmission networks need to do so, too.

And make no mistake, this grid lark matters. Without an effective and fully operational network, the revenue stream disappears. And that’s a heavy burden to rest on the shoulders of the cabling and HVDC community.

So how well is the market getting on? Well, while the problems at TenneT have been well documented over the past twelve months, considerable ground has been made.

Yes, cable damage and cable failure continues to present a substantial financial and logistical headache for many. However, the first steps towards tackling this most complex of challenges has already been taken and there’s an increasing argument to suggest that the investment in the cable and transmission markets has already facilitated future economic and manufacturing growth.

It’s the next bit though, that gets tricky. Since, as Friends of the Supergrid argued in its latest report published only last week, it’s time for a better regulatory framework. Great in principle. Let’s just not let the politicians meddle in this most entrepreneurial of markets, too much.

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