EMBER Report Says Transatlantic Interconnection Could Be Cheaper Than Nuclear, Hydrogen

Transatlantic interconnection could be a valuable tool for achieving cheaper energy prices, improving supply security, and advancing decarbonization. Despite the high capital costs, it may prove more cost-effective than other options such as nuclear and hydrogen. According to EMBER research, transatlantic interconnection could help both North America and Europe achieve a more secure and efficient transition to renewable electricity. The report, therefore, advocates for interconnectors as a key tool to accelerate the shift toward renewable energy.

Potential for Interconnection

There is vast potential for developing interconnections between the North American and European grids, two of the world’s largest energy systems. For instance, Germany alone plans to have 374 GW of renewable energy capacity online by 2030, underscoring the opportunity for large-scale integration.

The EMBER report highlights that integrating energy markets, optimizing grid resilience, and aligning electricity prices with real-time supply and demand conditions could bring significant benefits. This interconnection would help manage energy supply in both regions, smooth out price volatility, and improve market efficiency. It would also make both grids more secure by reducing price spikes and mitigating the chances of blackouts. Additionally, interconnection would enhance efficiency by minimizing clean energy wastage—avoiding the curtailment of wind and solar generation during periods of high renewable output.

1. Future Decarbonization: Power grids on both sides of the Atlantic are expected to be predominantly decarbonized in the coming decades. Much of Northwest Europe, the Northeast United States, and Eastern Canada have charted scenarios and committed to achieving near-zero carbon electricity within 20 years—many aiming for as early as 2035. Most of this decarbonized electricity will come from solar, wind, and hydro, which are heavily influenced by weather conditions.
2. Rising Electricity Demand: Over the next 10-20 years, electricity demand will grow significantly from industries such as The electrification of transport, heating, and industry. The report recommends using Increased energy consumption from data centers and air conditioning. It indicated an increase in electricity demand due to climate change and is estimated to become increasingly weather-dependent—rising for air conditioning on hot days and for electric heating on cold days as more homes switch from gas and oil to efficient electric heat pumps.

Impact

The study identifies interconnection as a solution to enhance grid security and efficiency. It could help to reduce price spikes and mitigate the risk of blackouts. It also can help avoid clean energy wastage by minimizing the curtailment of wind and solar generation during excess supply.

To address the impacts of weather conditions and safeguard grid reliability, significant grid flexibility is essential to match electricity supply and demand on an hour-by-hour basis. Flexibility ensures power stability when demand is high and supply is low to avoid price spikes. On the other hand, it prevents the wastage of clean electricity during periods of high renewable generation and low local demand.