Electricity without borders
It is an enormous achievement that electricity can be freely traded from Portugal to the Baltic States, and from Ireland to Italy. The internal European electricity market is the biggest in the world, unmatched by other parts of the world where electricity markets are a more local or regional phenomenon. However, since all market players use the same network infrastructure, this gives rise to energy policy debates. How to develop the necessary electricity transport infrastructure to support this market? And how to share the cost of that single infrastructure now that a lot of investment is needed?
The development of a Pan-European electricity network is of strategic importance for the functioning of the internal electricity market in the EU, and to make better use of renewable energy sources. We therefore need to revisit how we share the investment costs of energy infrastructure projects between countries. In a webinar which was recently organised by the Florence School of Regulation, professor Leonardo Meeus gave his view on this topic. The webinar was attended live by 133 energy professionals from all across Europe.
The view of the market
The poll at the end of the webinar showed that:
- 3 % think that we should continue the current practice whereby each country pays for the assets on its own territory (irrespective of who benefits from the investment in these assets)
- 11 % think that we should strictly apply the beneficiaries pay principle;
- 86 % agree with Leonardo that we need to have a case-by-case approach in which some projects will continue to follow current practice, while in others the involved parties will come up with innovative agreements, like in the two cases Leonardo refers to in the webinar (i.e. Norway-Sweden and Italy-Greece)
Want to know more? Watch the webinar recording, or read the policy brief "Guidance for Project Promoters and Regulators for the Cross-Border Cost Allocation of Projects of Common Interest" that Leonardo recently published on this topic.