No 'one size fits all' for EU power linkage, experts say[fr] 

François Meslier, senior vice president at EDF, the French state-owned electricity group, argued that investment in new electricity interconnections was crucial to establishing level electricity prices across EU markets. 

Speaking at a roundtable organised by the French Institute of International Relations (Ifri) on Monday (6 July), he said the revival of nuclear programmes in many European countries and the strong development of wind energy would only serve to separate national markets further unless infrastructure construction kept up with market changes.

Meslier called on the EU to subsidise electricity companies struggling with insufficient infrastructure. He argued that the revision of the trans-European energy networks (TEN-E) list of interconnection projects eligible for Community funding next year would be a good opportunity to do this.

"Now is the time to consider more balanced treatment for the development of electricity and gas infrastructure," Meslier stated, claiming that the gas lobby had been more successful in getting European money so far.

But Sophie Dourlens, an analyst at the Commission de Régulation de l'Energie (CRE), the French energy market regulator, said improvements in the operation of existing electricity transportation capacity should take precedence over new infrastructure in order to advance the common market project.

"In the short term, efficient congestion management measures should be a priority," she stated. 

Dourlens argued in favour of market coupling, which has led to surprisingly strong price convergence between France, Belgium and the Netherlands considering that France's traditional role as the natural exporter of electricity to both countries.

"At some borders investment in new interconnection capacity may be needed," Dourlens stated. "But at all borders, the improvement of interconnection management and use should be a short-term priority."

More clarity needed on EU framework 

The EU is seeking to drive forward energy-market liberalisation with its third legislative package, adopted last month. The European Commission hopes that a competitive market will improve conditions for investing in transmission networks, avoiding interruptions in power supplies.

But Meslier said the third package was disappointing in terms of compelling transmission system operators (TSOs) to reinvest in infrastructure. According to him, operators made profits of €1.7 billion in 2007 in auctions for cross-border transmission capacity, which should have been poured back into interconnection investments.

Although it was disputed whether the auction revenues would still grow in the coming years when electricity prices are expected to converge further, panellists agreed that the role of TSOs needs to be further clarified in the EU legislative framework.

The Commission sought to give transmission operators greater independence in the third package, but some called for greater transparency. Participants were concerned about the complexity of the EU framework, which among other things creates new cooperation structures for TSOs in both the gas and electricity sectors (ENTSO) and an EU Agency for the Cooperation of Energy Regulators (ACER).

The EU executive was urged to simplify the governance of interconnection capacity and clarify the role between the two organisations, in order to clear political hurdles to market integration.