Demand for renewable energy will drive Europe transmission market

A rising demand for electricity and growing environmental concerns across Europe is leading countries to look for more diverse energy sources, which will boost investment in their transmission and distribution (T&D) infrastructure, according to research and consulting firm GlobalData.

Key European countries, including Germany, France, U.K., Norway, Italy, Ireland and France, will spend substantial sums on grid expansion and upgrade programs in order increase security of electricity supply, deploy smart grid technology and accommodate new sources of power generation — particularly renewable energy.

Shivanshu Agnihotri, senior analyst at GlobalData, says, “Renewable energy accounted for around 70 percent of the total power generation capacity additions made in the E.U. in 2012, and further additions are being introduced as a result of E.U. targets aimed at reducing greenhouse gas emissions and increasing the share of renewables total energy consumption by 2020.”

According to the report, European T&D grids are characterized by congestion and the integration of distributed energy resources.

“The aging nature of the T&D networks in Europe has raised concerns regarding the stability of the electricity supply and has prompted a number of nations to frame policies for the incorporation of efficient technologies into the grid,” Agnihotri said.

The need to increase cross-border grid interconnections will be another boost to the European T&D market, as it could lead to competition in the power market and the potential reduction of power prices. By providing a broader generation base, interconnections can improve energy supply security and reduce the need for the additional construction of power generation capacity, according to the report.

“Europe is expected to invest heavily in the establishment of transmission infrastructure as it strives to create cross-border grid interconnections and harness the energy generated from renewable sources around the continent,” he said.

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