Europe is embarked on a once off transition to sustainability. Member States of the EU have committed to reduce their Kyoto Greenhouse Gas emissions by at least 20% below 1990 levels by 2020.
At an average growth rate of 2%, Europe's demand for electricity will double by 2050. At a 3% growth rate, it will more than treble.
Europe is building an "electric economy". Electricity is set to become the dominant source of energy. It will drive the transition to a low carbon, high growth future. By 2050 most of our transport could be powered by electricity, with the possible exception of some heavy commercial vehicles.
As part of this transition, electricity grids will no longer be seen as a national resource. They will become international corridors of trade bringing renewable energy generation from northern marine and southern solar generation to European centres of population.
If we are to reduce carbon emissions by 80% then all of this increased demand will have to be met by renewable energy. Existing coal, oil and gas generation will have to be phased out - completely. By 2030 there will be no more fossil fuel plant built in Europe. New build will consist mainly of renewables. By 2050, all of Europe's electricity could come from zero carbon sources. Already we can see that trend develop, with more wind energy installed in Europe in 2008 and 2009 than any other form of electricity generation.
If we are to fully exploit these renewable resources, and deliver power on a continental scale, then the energy sector has to significantly reduce investment costs through a whole series of innovations, from plant design to voltage source technology. In offshore wind, scale will come from combining large clusters of simplified turbines into wind-fired power stations. These stations are the modules on which the Supergrid will be built.
The efficiencies of scale resulting from larger turbines configured in 500MW modules will reduce unit production costs over time in accordance with the cost curve common to all industries growing to maturity. The supply chain is already expanding to meet anticipated demand, and ports and harbours across Northern Europe are competing to bring these new North Sea industries to their regions.
Further, the EU has embarked on a process to open up the European electricity market to competition, to facilitate cross-broder trade and to reduce the market dominance of existing national suppliers. This competition will drive down prices, increase innnovation and underpin the growth of a low carbon economy acros Europe.
The primary fuel sources for this transition to renewable generation will be wind, solar and marine energy. These assets are by their nature continental and not national resources. To fully harness and deliver over 1500GW of firm renewable power into load centres across the EU will require large-scale interconnection joining the centres of production.