Importing electricity free of CO2 standards

"Cheap electricity, want some cheap and dirty electricity." That's the possibility.

Over the past few days the same topic came up with a few people, importing electricity from outside the EU without a 'carbon tax.' The possibility exists that once Europe gets going on the European Emissions Trading System (ETS), that electricity produced further east could serve not only as a place to locate manufacturing (mentioned further below), but as a location to import cheap electricity from.

Importing electricity from Russia, the Ukraine, Belarus and from whoever else can manage to connect their power plants to the UCTE network, will offer the ability to undercut electricity producers in the EU. And more importantly, it will also undercut the very goal of reducing CO2 and other emissions to prevent the globe from really heating up (as compared to only slightly). Of course importing electricity into the union is dependent on the size of the interconnectors besides the use of existing ones, will we be seeing a huge building of newer interconnectors with the peripherial countries of the EU? Possibly, and here is why.

Poland is 96% dependent on coal and has not acted quickly enough to diversify. Now manufacturers and producers are freaking out about the looming implimentation of CO2 emmission quotas. There is a fear that manufacterers could easily pick up and move next door to the Eastern countries. However, wouldn't it be easier to build interconnectors to an external EU neighbor, which every country has the right to do, then ship this electricity into the country for manufacterers? While I would expect there are no big plans currently for this, particularly with Russia (excluding a merchant line from Russia to Sweden), the situation may arise if the price differential is great enough. Market forces of supply and demand may take over and make such projects feasible, even over current diplomatic relations.

Russia already has plans to not only build a nuclear power station in Kalingrad but to boosts its electricity producing capacity domestically to ship to the EU (as it already does to China). So the question that arises is 1) will the EU impliment a carbon tax on imports quickly, 2) accept imports for the short-term but not the long-term, 3) or do nothing in order not to sneak in some cheap electricity to help out those emerging economies that need a little support?

The last option is lame, and undermines the basis of EU actions, the second option may be the muddled policy response the EU puts together, however, just as there's been a history of EU opinion on the phasing out of long-term power purchase agreements, there also need to be excplicit statements that any infrastructure that is built is at risk for having a carbon tax imposed on imports. Thereby making it clear that power plants and transmission lines built must also be commericaly viable under a CO2 quota system. The first response could still happen quickly enough, but I think ambiguity will reign for a while.

Which ever way carbon taxing goes, it is clear that specific regional associations need to be linked by larger groupings which play by similar rules. But that is a topic for another day.