Europe’s power sector pushes back against Brussels’ overregulation

3 months ago 13

Triggered by proposed new rules on electric transformers, European power sector representatives have written to the European Commission to outline their wider issues with the EU’s approach to regulation.

The European Commission has been hard at work over the past five years, crafting rules to facilitate the decarbonisation of the EU’s economy – everything was to become more efficient and use greener materials.

These efforts included a push to make electricity transformers – essential for grids – more energy efficient. Proposed new rules would reduce transformers’ power losses by up to 0.5% percentage points, but to achieve this, the devices would need to be much bulkier.

For industry, this proved to be the final straw.

On 30 May, Stefano Soro, who heads the net-zero industry department in the European Commission, and Madalina Ivanica, head of the raw-materials department, received a letter concerning the Commission’s ongoing efforts to revise energy efficiency rules for grid equipment.

Inadequate planning and lack of communication

The letter, sent by power sector association Eurelectric and neighbourhood power grid assocation E.DSO, targeted the substance of the proposal – but also the Commission’s process, citing “inadequate planning and lack of communication.”

The text, seen by Euractiv, said that the Commission’s entire process was being conducted without “adequate incorporation of stakeholder expertise,” meaning a lack of exchange with the companies purchasing and installing the devices.

Rehashing transformer efficiency standards was also done without a “thorough economic assessment,” the power sector associations argued.

This goes to the heart of concerns with the Commission’s proposal. According to the industry, bulkier transformers use about 30% more material, most of which is copper.

The return on that investment would be negative, the offered calculation goes. The extra 0.5% percentage points efficiency gains would not be sufficient to cover the costs of expensive extra copper.

The industry letter states that this is particularly the case given the 60% increase in copper prices over the past three years.

A history of industrial discontent

It is not the first time a Berlaymont proposal for electrical equipment was met with industry resistance in recent years.

Previously the F-Gas regulation threatened to make electric switches illegal, the industry feared. F-gases are the cousins of ozone-damaging HFCs, with similar industrial uses but large climate impacts. Electric switches are insulated using F-Gas SF6.

“The industry is concerned,” reads a letter by the American Chamber of Commerce (AmCham) from early 2023, particularly regarding a restriction on high-voltage switches, which very few companies could produce.

Both Eurelectric and AmCham worried that the move would “limit competition” – and endanger the build-out of the grid.

The laws, regulating switches and transformers, play into each other because the devices are often made by the same company in the same location.

“A lot of this equipment is also built by the same companies that build transformers – so they also have this [F-Gas regulation] on their plate,” explains Joannes Laveyne, a research assistant at the electrical energy lab of Ghent University.

The EU had passed an unprecedented number of laws in the past five years, but it is “their increasing level of detail in particular that causes problems for companies,” said Holger Schwannecke, secretary-general of the German Trades Confederation ZDH.

While Schwannecke lauded the adoption of joint climate goals, “the regulations devised by the EU administration in Brussels often fail to consider the realities of companies.”

At worst, this could mean a move towards Chinese imports. Transportation grid operators “will inevitably start buying Chinese stuff because they need it and can’t source it in Europe,” says Laveyne.

Another source of discontent is a ban on forever-chemicals, PFAS, currently being pushed at the EU level.

This “blanket” ban risks “decarbonisation goals,” a broad power sector alliance warned – forever-chemicals play an important role in producing long-life equipment for the power sector, they stress.

[Edited by Donagh Cagney/Alice Taylor]