Europe is not meeting its cross-border grid connection goals, watchdog warns

7 months ago 31

As EU energy ministers meet in Brussels to discuss grid expansion, the EU electricity market watchdog ACER warned on Friday (12 April) that Europe’s key grid connections are not sufficiently dedicated to electricity trading between neighbouring countries.

The EU’s future power grid is expected to transport, for example, solar power from Spain to Germany or Norwegian hydropower to Slovakia, when needed. To that end, the EU adopted the ‘70% rule’ in 2018 – at least 70% of ‘interconnection’ transmission capacity must be available for cross-border electricity trading.

Interconnectors are wires which link together zones of Europe’s grid network that would otherwise be isolated. Often these zones correspond with the borders of a country or group of countries. As each of these zones has its own power markets, they are known as ‘bidding zones’.

From 2026, the 70% rule will become mandatory – but EU countries are far from being able to meet it, the power market watchdog agency ACER warned the European Parliament and Commission on Friday.

The agency chief called for “structural solutions that would enable the fulfilment of this requirement in a cost-efficient and timely manner”.

The agency suggested a “potential reconfiguration of bidding zones,” additional sanctions, as well as “targeted grid developments”.

Otherwise, the bloc would “jeopardise the efforts invested in the transition towards a carbon-neutral power system in the EU,” the agency added.

The biggest clog in the central European grid is Germany, ACER’s monitoring shows.

While Austria meets the 70% target for one fifth of the time, Germany did not manage to do so a single time in the observed time-period. Instead, the capacity made available for cross-border flows is below 20% more than a third of the time.

The ACER opinion – an unprecedented warning signal – comes right in the middle of a drawn-out political fight over the structure of Germany’s power market: Is a single power price sufficient for a large country?

While Italy and Sweden price power differently depending on location, consumers in Germany’s renewables-rich north pay the same per electron as those located in the energy-hungry south.

Limited transmission capacity between the north and south of Germany means that dividing the country into separate ‘bidding zones’ could potentially boost the network’s efficiency.

The large footprint and capacity of Germany’s power network means that such a decision would also have important implications for the grids of neighbouring countries.

With a key study by the country’s four transmission operators expected for the summer, the simmering fight will likely be reignited – only this time, the integration of the wider European power grid will be at stake, too.

[Edited by Donagh Cagney/Zoran Radosavljevic]