In ‘Energy Policies - Hither and Yon’, energy generation weaves geographical advantages and constraints in the political strategies of sovereign states
Access to natural resources is, unsurprisingly, reframed in terms of national independence and economic opportunism
Across Europe, national preferences created a patchwork of diverse infrastructures of energy generation, from the hydropower in Norway to nuclear dominance in France to the mix of renewables and gas in Spain and Germany and in Eastern Europe
The same pattern holds on the global stage in the fossil fuel rich U.S., in coal-dependent India and China, in natural gas-rich Australia or in energy-thirsty South-East Asia
Managed in the national (and State) interest, connectivity between European States or between regional grids in the U.S. has for long been a 'second-order' of priorities
Until now...
Frenzied electricity demand, on a global scale, conflates issues of availability with transmission capacity, hinging on
- the degree of openness to the international energy market, either by necessity (for electricity importers) or by choice (for exporters)
- the magnitude of past and future capex investments in electricity generation requiring amortization (nuclear generation's 50-year outlook or 8/15-year timeframe of off-shore wind farms (down to 3/5-year for on-shore projects)
Energy supply and demand, a mismatch for the ages...
The factors determining price of electricity are like the colored fragments of glass in a kaleidoscope, in continuously shifting patterns
Pricing in every region, and every country, is distinctive - depending on supply and demand, national energy generation, tight or loose regulations, share of imports or exports, and environmental preferences for renewables
National sovereignty is about arbitrage, achieving a delicate balance in the make-up of energy security
Unanticipated but radical shifts in supply (following the Russian war), or in demand, force drastic reevaluations on utility operators and on governments
And electricity demand appears to be unsatiable
Accelerated urbanization around the world and exponential growth in new computing power demand of data centers point to vastly increasing capital expenditure and higher cost to the domestic energy user
The need to scale energy access depends on diversified sources, mainly in renewables and also by nuclear generation...if time allows...
This is the hard part because of non-compressible delays
To restore balance, the time lag will be material
In the short term (1-3 years), the supply-demand gap will keep growing
To additional electricity generation, delays are estimated at 3 to 5 years from additional wind and solar farms and 10 to 15 years for nuclear plants
To bridge the gap and address the mismatch, grid efficiency is critical in boosting electrical power delivery quickly
- by improving access to the grid for 'bursts' of renewable energy generation, currently 'lost' because of lack of transmission capacity
- by optimizing power transmission across regions (Europe or U.S.) where it is most needed
On principle, every country and every American State will be unambiguously supportive of optimal combinations of the energy sources on which they rely
In practice, unequal access to natural resources and diverging energy policies make compromise difficult and perhaps delusional
The roadblocks encountered by the European Union in implementing grid efficiency are the subject of this note
Power politics are the dominant narrative of the 21st century, and energy sovereignty its vindication
International trade, national defense, AI compute and currency geopolitics all rely on the centrality of energy generation and its effective distribution to assert sovereignty
Straightjacket of European energy policy
Regarding energy, European policy is clear-eyed in its diagnosis but lacks cohesion in execution
The collective drive which would ensure economic development and global power is stuck at the planning stage
Jealous protection of sovereign governance by each Member State goes to the heart of Europe's weakness
The quest for compromise between disjointed national interests is reflexive and ubiquitous, even when each State would gain from a unified European policy
Arguably, compromise frames every EU policy at every stage, from inception to implementation
Compromise is the 'polar star' baked into the world view of the Commission...
This is how compromise ends up taking precedence over coherent roadmaps prepared by the European Commission
Decisions are processed in a give-and-take where the common ground is the lowest common denominator, hardly beneficial to any one Member State
The European Commission falls victim of this structural weakness in its own institutional arrangements, even when focus on existential issues matters most
Responsibilities are split between Directorates (the equivalent of government ministries) such as Energy, Trade, Internal Market and Competition, to name a few key directorates
Cooperating side by side, with different mandates, their priorities may overlap - at best - but they do not coalesce in a unique compact pivoting on energy
As it is, the member countries of the Europe Union recognize the urgency of boosting energy generation while simultaneously addressing climate risk
And the Directorate for Energy has responded by prioritizing renewable energy, to meet Europe's climate goals, and energy efficiency, to reduce energy consumption by 2030
European energy goals appear oddly constrained when sweeping policies, required of electricity's centrality, should stamp their mark on all inter-linked action plans
R&D, industrial policy and terms of trade, policies led by different Directorates, are all about energy, somehow viewed through disjointed filters...
Policies set at the European level are the children of awkward compromises, one at a time
The Commission's rainbow of Directorates, each assigned to a member state, is a showcase of commonality
The regulatory power exercised by the Commission in dedicated areas (such as trade treaties, competition rules or customs) stands out, precisely because every other policy is just 'shared' or simply 'supported'
And Energy policy is such a 'shared' competence, where Member States retain the exclusive right to determine the conditions for exploiting their own energy resources and choosing their preferred energy mix
State sovereignty ends up overwhelming the 'sharing' part of EU engagements in existential policies requiring collective action
To assert commonality, European energy policy will downgrade its ambition by projecting some fairly undisputable goals
And this is why transformative and collective energy initiatives just chug along to a painful dead end
Sovereign member states will prevail and everyone knows it out of hand
The electrical grid, a test case of dis-union
The electrical grid is central in bringing the different energy sources across Europe together
Coordination from a central entity - the European Commission - would address exponential growth in energy demand, estimated at 60% by 2030, and secure more efficient transmission of electrical power at lower cost
The March 2026 TTE (Transport, Telecom and Energy Council) unsurprisingly restated broad support by the Member States for cross-border grid expansion 'in principle'
But pushback by the same Member States against the European Commission's effort at coordination should come as no surprise
The attempt to scale a coherent grid to optimize electricity distribution across Europe in response to increasing demand, rebalanced in favor of renewables and at a competitive cost, lays bare critical incompatibilities.
This is because structural differences in energy profiles of the States emerge in every dimension imaginable, from national energy generation to transfer capacity of the networks
While some of the roadblocks can be levelled by mutual compromise, integrated cross-border grid planning must wrestle with national sovereignty and structural differences
A sovereign good
Energy is essentially about sovereignty
Energy is everywhere - ensuring security of the population, accounting for national preferences (for or against nuclear power or prioritizing renewables) and favoring economic competitiveness in global trade
Member States cannot be expected to let such influence slip away, even with the worthiest intentions
Safe and reliable access to power for economic progress and well-being of citizenship has defined public regulatory power over energy production all over Europe
Geography shaped national policies over decades, reflecting the ease of access to import routes by land (via pipelines) or by sea (by tankers) and the benefit of direct access to natural resources such as coal, oil or gas
Whether operating as public entities, such as EdF in France, or as private firms in the US or in Germany, the energy producers were integrated from energy source to the consumer and heavily regulated
Ambitiously, the Commission wades into incredibly controversial inter-state energy flows and price transfers
The central argument supporting an integrated grid rests on lower average electricity costs across the Union for now, and ultimately lower costs in absolute terms
Setting this trend in motion is expected to boost European competitiveness, a common benefit, and to respond to anticipated growth in power demand
A tidal wave ? - No one wants to get wet
Digging into the details of grid integration under the guidance of the European Commission, everything is controversial
Differentiating factors leave vocal minorities of Member States, and often even majorities, feeling aggrieved or actively opposed
- natural energy resources are unequally distributed
- cumulative investments for sovereign energy generation stretch decades at national levels
- national transmission networks may (or may not) be aging, or prove unable to support electricity transfer on behalf of border countries
- pricing strategies may - or may not - rebalance domestic consumption with congestion tariffication, when the demand to move electricity exceeds the physical limits of the cables or interconnectors in an area
And each of these dimensions defines shifting alliances of vested country interests
Arguably, in the long run, everyone wins with attractive energy pricing, insuring competitiveness on the world markets
However, and of more immediate concern, the "less-advantaged" in the new setting, currently enjoying relatively cheap and abundant energy at home, will be uncomfortable with the improvements of "winning parties", living with scarcer resources and more expensive tariffications today
Focal points of disagreement define variable combinations of 'rejectionist' European states
A Commission-led scenario planning for a shared grid would define the roadmap of network integration, upending the balance of existing national networks
Supposed 'lack of transparency' in the study, mandated by the Commission, is fine print for deep skepticism
Projected budget allocations, on European and national purses, are as many aggressive movements of the muleta, triggering the Member States', and bull's, instinct to charge
Every Member State wants a piece, no one wants to share, except a few crumbs (maybe)
A €584 billion investment to upgrade the European electrical grid by 2030, estimated by the Commission, sets the stage for a dog fight
For eligibility of domestic grids for European funding (CEF-E), it is open hunting season - everyone wants in
For revenue sharing - a 25% European tax on congestion tariffication to fill the coffers of the Commission earmarked for grid extension - there are few takers
Cross-border cost allocation, embedding a clear principle where the beneficiary country contributes to the cost of energy infrastructure in the hosting country, puts many noses out of joint
Accelerated permitting procedures for power lines are stuck between multiple layers of local and regional institutions - non-starters in Italy and probably elsewhere
What to conclude (tentatively)
Leafing through reams of studies, published by the mile by the Commission and by EU think tanks, any sense of urgency gets lost
A narrow path needs to be uncovered with urgency by putting the onus on the States to resolve differences between 'importers' of electricity, 'exporters' and the grids connecting the two
If the increase in power consumption (+60% by 2030) is accepted as a realistic projection, this timeline should rank proposals supported unanimously - or at least by a majority without strong dissent of one or more member countries
Those proposals must be consistent with the EU 'master plan' for the grid, but would not require formal validation
'Folding up the muleta', the Commission should probably not be involved in implementation, with all practical aspects left to be negotiated directly between the 'interested' parties
EU financial subsidy of the proposals might set short-term target dates to benefit, speeding-up the State-by-State search of common interest
Such direct negotiations between sovereign states, consistent with the EU master plan, would be of interest for Spain (renewables exporter) and Southern Germany (renewables importer). French grid upgrade would ensure the connectivity of such massive electricity transfer, with costs shouldered by the interested parties (including the European Commission)
On the same basis, direct agreement could be sought between Sweden (hydropower exporter) and Northern Germany
This approach breaks up an exceedingly complex policy which might be left to decay in 'the lone and level sands' of oblivion
With fragmentation, the master plan issued by the Commission might never be fully implemented but this 'second best' option seems attractive
- The core engineering, procurement and construction contractors, such as ABB, Siemens, Bechtel or Schneider, require clear timelines to plan major infrastructure works, backed up by financial commitments
- With order books filled to the rim, response time will be impacted in any case and further delay will push actual infrastructure work beyond 2030
- Negotiation between interested parties will reach beyond technical calculation by aligning the political interests of sovereign states
By creating a space for national commitments regarding generation and distribution of energy, within a European framework, the Community would demonstrate its efficient pragmatism
The approach could inspire some even more fraught shared interests, such as in European defense...