1. Incentives for electricity infrastructure – ERGEG view

2. Background
Conclusions from ERGEG document - Cross Border Framework for Electricity Transmission Network Infrastructure in 2007 e.g.:
Role of regulators: EU regulators should be given some form of collective duty and competence to oversee and promote (cross border) transmission network provision and approve cost allocation of cross border elements as appropriate. Each national regulator will need appropriate competences, independence and resources.
Role of TSOs: Each TSO should be given a collective role to build and operate the EU grid, under regulatory oversight. TSOs should be given a new collective institutional basis in order that they can fulfil this role.
How to promote transmission network investments and apply appropriate cost allocation cross border?

3. Background
Interconnection capacity (NTC) in relation to installed generation capacity
< 10%
10 – 30 %
>30%

4. EC study – incentive models
Encouraging that proposed incentive models can be applied at the same time; only ensuring that they incentivize decisions taken by the TSOs
Case-by-case implementation depending on nature of problem, national legal and regulatory framework
However, effects of proposed methods have to be carefully studied to introduce incentives of equal effect across the borders
Further work on practical implementation is needed
Question: Is there need for incentive scheme if authorisation process is a bottleneck?

5. EC study – interregional cost allocation
Interregional planning process:
EU/MS policy & objectives
Primary energy resources
Investors, demand forecasts
Scenarios
for analysis
Input to
revision of
investment
plan
Power system analysis (technical)
- Balance between supply and demand
- Grid
Construction
and building
process
Alternatives for
grid enforcements
10-year network investment plan European Regional National
Evaluation of
alternatives
(cost-benefit analysis)

6. EC study – interregional cost allocation
Cost/benefits of different reinforcement possibilities
Socio-economic criteria applied – joint criteria has to be developed
Impact of reinforcements on market functioning
Regional and global EU approach
Impact e.g. on congestion income
Common methods for profitability analysis of reinforcements should be developed
Apply e.g. net present value benefit > 0
Reference solution should be agreed
Reallocation of costs is complex issue, joint approach needed, transparency is vital

7. Thank you for your attention !
More information at ERGEG website: