14 Enabling the Digital and Energy transition A recent Stanford University study modelled grids fully powered by wind, water and sunlight across Western Europe. The costs of ‘fully interconnected’ versus ‘completely isolated’ grids were compared for interconnection scenarios in Belgium, Denmark, France, Germany, Gibraltar, Italy, Luxembourg, Netherlands, Norway, Portugal, Spain, Sweden, Switzerland, and the UK. Climate forecasts, grid integration data, and energy demand profiles were also taken into account. In all modelled scenarios, increased interconnection between countries improved grid stability and reduced energy costs, compared to ‘isolated’ grids. This would also provide protection against supply loss, for example due to extreme weather. According to the study “interconnecting countries can (…) serve as an additional benefit to grid stability and cost reduction in a 100% clean, renewable energy world.” Interconnection can drive down cost by supporting market integration which is an important aspect of price formation. A report from Connect Energy Economics, commissioned by the German Environment Agency (Umweltbundesamt, UBA), states that an affordable largely CO2-free German and European power supply is feasible, if a sufficiently interconnected power market is in place. For all of the ten assessed scenarios with ambitious CO2 targets comprehensiveuseof aEuropean internal electricity market was considered an important. The European Commission expects fossil fuel dependence will diminish as electrification of the energy system increases, driven by the deployment of renewables. Expansion of networks and interconnections across vast areas and borders, linking remotely generated renewable energy to a The EU aims to be carbon-free by 2050 by phasing out fossil fuels. However, yields from renewable sources are often extremely variable: wind turbines won’t work when there’s no wind and solar panels don’t produce power at night, for example. An interconnected European power market allows states to buy other countries' excess energy capacity when needed and sell their own surpluses. An integrated European power market through interconnection Integration of renewable energy, reliability and cost considerations are vital drivers for the European Interconnector Market.
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