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Last Monday morning — a scorcher in Greece — was a bad day at the Lavrion power station. First, a valve linked to unit 2 of the plant, 80 km southeast of Athens, was found to be leaking. Technicians repaired it within a few hours, but then found that one of three transmission pipes feeding water into the station's boilers was steaming up and ready to burst. Its automatic shutdown system kicked in, causing all four units of the power station to halt. That took about 1,200 MW from the country's grid and brought electrical reserves to a dangerously low level. Before the station could come back online, tens of thousands of Greek households, suffering in temperatures above 40C, switched on their air conditioners, overloading substations in the northern part of Greece, where most of the country's power is generated. Within seconds the system came crashing down, as one substation after another automatically cut off to protect itself from damage.
And so at 12:39 p.m., the electricity sputtered off in Athens. Thousands of people, including Transport Minister Michalis Liapis, were stranded in the city's glittering new metro; hundreds more were stuck in elevators for up to four hours. The blackout soon spread to the country's agrarian south and the Ionian Islands, the worst power outage in Greece in decades. Authorities did their best to reassure the public, but on Thursday a fresh power cut caused by a faulty cable struck the Acropolis and two neighboring districts for an hour. Pantelis Kapros, president of the Greek Energy Regulatory Authority, reminded everyone that in 2001 his organization had raised the prospect of a blackout just before the August Olympic Games. "Sadly, that has been confirmed," he said in a local radio interview. But Gianna Angelopoulos-Daskalaki, who heads the Athens organizing committee, insisted "such an incident cannot affect the Games. All our venues have uninterrupted power supply systems." So at least in theory, if another blackout occurred next month, the backup system would make the Olympic venues islands of light in a darkened city.
Last week's blackout was the most dramatic in Europe so far this year. But Greece's electricity problems are hardly isolated. A fire at a Madrid substation last week caused a blackout through much of the central city. Last summer there were two power failures in Italy, including one that lasted 18 hours, and Prime Minister Silvio Berlusconi is warning that more could come this summer. Britain also had two blackouts because of problems with its grid. Even adequate supply doesn't guarantee performance; France, where there is plenty of juice from nuclear power plants, has suffered a series of intentional blackouts caused by workers at Electricité de France protesting partial privatization of the state-owned utility. The blackouts seem to have had an effect, as privatization has been postponed.
Why is Europe's electricity sector so inadequate? There are crises up and down the system: high prices, inadequate supply, creaking infrastructure. The European Commission began liberalizing the electricity market with a directive in 1996, though countries adopted rules at their own pace. The deadline was July 1 for industrial users — although most E.U. nations missed it — and 2007 for households. Peter Claes, president of the International Federation of Industrial Energy Consumers in Geneva, points out that liberalization has so far accomplished very little; electricity prices have risen 35-50% in the last year despite it. Yes, production costs have risen — the price of coal has doubled — but Claes points to a lack of competition. "An oligopoly of five big companies controls the market in Germany, France and the Benelux countries," he says, adding that a lack of cross-border capacity makes it hard for companies to shop around for electricity from another country.
Even if market liberalization were working perfectly, it alone could not add more capacity. Fatih Birol, chief economist of the Paris-based International Energy Agency (IEA), says half the power plants in Europe are more than 25 years old, meaning they will have to be replaced in the
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The problem used to be that prices were too low, averaging €25-€30 per MW-h, so building new plants didn't make economic sense. Prices are now up to about €35 per MW-h — still below the €40 threshold experts say is necessary to make building a new plant economic. Ian Russell, chief executive of Scottish Power, has said prices are still too low for him to invest in building new power stations, but his company did buy an existing power plant earlier this year to help meet demand.
Another problem is finding a cheap way to generate power but still abide by E.U. pollution regulations and the Kyoto protocol to reduce greenhouse emissions. While most countries except France and Finland are phasing out nuclear power, there aren't many attractive alternatives. Coal-fired electricity plants are cheap but notoriously dirty. Natural gas, although cleaner, leaves countries dependent on insecure sources of supply like northern Africa and central Asia. Renewables like windmills and solar panels are part of the solution — the number has grown exponentially in the past five years in Europe — but aren't dependable.
There's an equally urgent need for investment in transmission and distribution, often the chief culprit in blackouts. Colette Lewiner, a Paris-based energy expert at consultants Cap Gemini Ernst & Young, points to two problems. Unlike power generation, transmission and distribution networks are "natural" monopolies that can't be liberalized; it makes no sense to build competing electric lines. Regulators have pressured transmission companies to cut costs, and the easiest way to do that is to stop investing. "Now there needs to be clear room for investment for upgrading the grid," Lewiner says.
In Athens, officials insist that five new substations will come online by next month, enough to ensure that the juice will flow throughout the Olympic Games. But the Continent's electricity system isn't so easily fixed. Regulators have to offer incentives to companies to make long-term investment profitable. Until then, blackouts like the one in Athens will remain the unsettling norm.
- CHARLES P. WALLACE
- Athens, and Europe at large, face power failures