Regulated Cross-Border Transmission Investment in Europe

Abstract

In a liberalized market, generation and transmission investment decisions are decoupled, so that more grid is necessary. The European transmission grid is the backbone of the Internal Electricity Market that besides serving the market has to ensure security of supply and to allow connecting renewables. Transmission grid investments are clearly needed, especially to increase the scarcely available cross-border transfer capacities. The regulatory framework in which these investments are to take place is discussed in this paper. The authors evaluate whether the regulation that is already in place will deliver the investments crucial for the success of the liberalization process in Europe.

European Union energy policy integration: A case of European Commission policy entrepreneurship and increasing supranationalism

“…The 1986 Single European Act introduced measures to establish an internal market by the end of 1992 ( Council of the European Union, 1986 : Art 8a), providing the groundwork for legislation on the internal energy market implemented from the 1990s. An energy plan of action to 1995 focused on putting the ‘concept of Community solidarity into practice’ with the objective of ‘geographical diversification of the Community’s external sources of supply’ and ‘greater integration, free from barriers to trade, of the internal energy market’ ( Council of the European Union, 1986 ). Energy external objectives lacked substantive legislation to achieve them, though the first internal energy market Directives were launched in 1996 and 1998 (Council of the European Union, 1996, 1998) .…”

“…With a small TEN-E budget of €20 million p.a., this prioritises ‘projects of European interest’, mainly to support feasibility studies. Whilst apparently weak, this tool ‘can act as an important stimulator at an early and risky stage’ ( Meeus et al, 2006 : 597), and can lead to new financing routes, including support from the Structural and Cohesion Funds and EIB loans as well as Commission appointed European coordinators of key projects to expedite progress and garner member state support. It is an example of a degree of supra-national network planning, funding and coordination support for key, internal, interconnector projects.…”

Management and control systems for large scale integration of renewable energy sources into the electrical networks

“…One of the major drivers is the emerging internal electricity market in Europe, requiring sufficient transport capabilities between regions to enable competition. Making the grid more suitable for increased transactional power flows can be seen as an opportunity to increase the wind power integration levels into the European power systems [14]. Furthermore, the specific nature of distributed and variable output generation requires the development and implementation of new technology and grid management concepts, as already mentioned previously.…”

“…The adaptation of the transmission network is a complex process subjected to a strategic long term planning, involving mainly the optimal use of the transmission networks with wind power in a short-term and, in a mid and long term, the creation of the Trans European Transmission Networks and Europe wide offshore grids [14].…”

A nodal pricing analysis of the future German electricity market

“…It should be mentioned that this is a strong assumption. [25], for example, states that not only TSO's but also national regulators play a role in the allocation of congestion revenues and that the national regulators show a bias towards adjustment of fixed network charges.…”