The European electricity market is not fully using its interconnector capacity, so prices are higher in some regions than they need to be, the Agency for the Co-ordination of Energy Regulators (ACER) has concluded. In its annual ‘market monitoring’ report on the EU internal electricity and gas markets it has proposed new rules for allocating capacity and called for Member States to stop reserving so much for national purposes.
The EU regulators group calculated a ‘benchmark’ capacity for each of the interconnections that link national energy grids and found that they were under-used. It said “the gap between the commercial and the maximum possible (benchmark) capacity is on average 15% and 53% of the benchmark capacity for HVDC and HVAC interconnectors, respectively.” An important issue for HVAC connections was the need to accommodate ‘unscheduled flows’. This was particularly acute on the border from Germany to Poland, where 76% of the benchmark capacity is used to accommodate such flows, but it occurred across Europe and ACER found that interconnector capacity was often reserved for such flows in case they materialised.
Among the other reasons interconnections were under-used was individual countries domestic security of supply arrangements. But the Agency said that was a ‘false dichotomy’. Making better use of interconnections could improve security of supply, it said. “The argument that available cross-border capacity needs to be reduced due to operational security reasons should be used by TSOs only in exceptional situations, ie when no other remedies are available (instead of a recurrent and vague justification)”.
At the same time, countries had called on interconnectors to resolve internal power balancing issues, reducing the export/import capacity, when the issue could have been handled without recourse to interconnectors.
Proposing a new approach to interconnector sharing that priorities the joint market over national needs, ACER said, “As the required paradigm shift will require strong political support from Member States, these could consider setting a binding target for the availability of existing and future cross-border capacity.”