World needs $700 billion in power grid upgrades
PARIS (Reuters) - The world's 16 largest power grids need to invest $700 billion over the next 10 years to cope with a rising share of renewable energy in mature economies and with soaring demand in emerging nations, French power grid RTE said.
The 16 grids, which transport 70 percent of the world's electricity demand, expect global demand to jump 50 percent by 2022, when renewable energy will equal the capacity of 250 medium-sized nuclear reactors.
"In North America and in Europe, the need for investment is a necessity to connect dozens of thousands of megawatts of solar and wind power," Dominique Maillard, head of RTE, said in an interview on the sidelines of a meeting of the GO 15 lobby, which unites grid operators from the United States, South Africa, China, France and other countries.
The operators, which operate 2.2 million km of transmission lines, say grids will need to be enhanced to ensure the safe connection and transport of renewable energy.
"If we don't succeed in developing networks properly, either the energy transition will remain a pretty expression that was never applied, or we will run the risk of living dangerously," Maillard said, referring to a heightened risk of blackouts.
RTE, fully owned by EDF (EDF.PA), plans to invest some 15 billion euros ($19.2 billion) by 2020.
The European Climate Foundation, a privately funded organization, said last year companies and governments in the European Union would have to spend 46 billion euros on grid systems by 2020 and another 68 billion euros by 2030.
While financing such sums could prove difficult because of the economic crisis, the main problem in Europe is the widening gap between investment decisions and the actual commissioning of projects because of legal appeals from local people.
"There is a financing problem, and it's true that in times of crisis the situation is more tense, but infrastructure projects are generally well perceived by financial investors," Maillard said.
"Some 50 or 60 years ago, electricity was considered a necessary commodity, but now there is this idea that we are in a finite world and that new projects are not necessary," he said.
He cited Germany, which despite massive development of renewable energy, struggles to shift power generated in the north to the industrialized south because of a lack of transport capacity.
Projects such as building a high-voltage power line now require eight to 10 years to be completed, mostly because of the approval process and local opposition, against a total of five to six years a few decades back.
Emerging nations, meanwhile, are rapidly developing networks and building lines with at least double the transmission capacity than those in Europe.
"Emerging nations are a bit in the situation in which we were in the 30 years after the second world war with a doubling of electricity demand every seven years, such as in China, India and Brazil," Maillard said.
($1 = 0.7823 euros)
(Editing by Jane Baird)
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