| Today, interconnection infrastructures are still developed country by country by TSOs being mostly independent from each other, operating in national regulatory frameworks, and receiving approvals from regulatory authorities with mandates to focus on national benefits with different methodologies.
This results in a suboptimal situation where key internal market infrastructures are only conceived or expanded following the needs of each individual country or TSO and ignoring the global needs of the whole European market or of larger EU policy objectives (notably RES integration, security of supply). This decentralized approach does not work well when the full benefits of one isolated action depend on other isolated actions. It does not work at all when the costs and the benefits of actions are not fairly distributed across countries and TSO control areas.
The recent November 2010 communication of the European Commission, identifying key infrastructure priorities for the EU and the coming infrastructure package, obliges us to rethink how to better conceive and construct our interconnection infrastructures with a common European interest. The next “Ten Years Network Development Plans”, to be issued in 2012 (electricity) and 2013 (gas), should serve as a benchmark for the conception of network planning by offering the first comprehensive European top-down scenarios integrating the EU climate and energy policy targets “20-20-20” as well as longer-term perspectives up to 2050.
This first important step towards a common conception of our networks has to be followed by a corresponding step in the identification of benefits and the allocation of costs. The electricity Inter TSOs Compensation Mechanism (ITC) already offers a frame to deal with existing infrastructures but it has not been designed to steer the investments needed for the achievement of all EU energy policy objectives. It still lacks a robust measurement of both the benefits and the costs of cross-border flows. It is not a tool to take into account ex ante the actual costs and benefits of new pieces of infrastructure.
This raises several questions:
- How to better identify the beneficiaries of future infrastructures? How to better measure these benefits and their corresponding costs? How to allocate these costs among beneficiaries?
- How to realign the higher European or regional needs within an operational regulatory framework at inter-TSO and inter-NRA level, that ensures EU-added value?
- Which regulatory and financing tools to use to implement such a framework? How, concretely, could they be implemented?
These questions are not asked only in the EU, but have been addressed, too, in the USA (California) or in Central America. They may lead to supra-TSO and supra-NRA answers anchored in the coming Framework Guidelines and Network Codes. They might involve the ENTSOs and ACER as the right institutions to handle these issues in close cooperation with the European Commission. |
