To achieve a single European market in electricity, two key requirements must be in place:
- there must be sufficient physical transmission links between member states to transmit demand
- there need to be enough efficient market-based mechanisms to make the most of the transmission capacity.
To fulfil this aim we actively work on:
- GB Interconnector Policy
- European Framework Guidelines and Network Codes for Electricity Markets
- Electricity Regional Initiatives Project.
The GB Interconnector Policy
Our work within this area focuses on promoting cross-border electricity trading and the efficient use of electricity interconnectors.
The overall aim of our work is to maximise the efficient use of existing and planned interconnection by ensuring that users can respond efficiently to differences in energy prices across different countries. To optimise the use of existing capacity, we work to:
- remove barriers to trade
- ensure effective competition
- ensure an appropriate allocation of rights and responsibilities between market participants.
We also work to create arrangements capable of sending clear investment signals for efficient levels of additional interconnection, thus facilitating further development of interconnections between Britain and other European countries.
European Framework Guidelines and Network Codes
We contribute to developing European Framework Guidelines for electricity markets, which then provide a basis for upcoming European Network Codes. Our team is currently involved in the development of European Network Codes on electricity balancing, capacity allocation and congestion management and forward transmission rights.
We play an active role in the Electricity Regional Initiative Project. This was initially launched in 2006 as an interim step to speed up the integration of Europe's national electricity markets.
The implementation of EU legislation aimed at liberalising the European energy markets (called the Third Package), combined with the strong commitment by member states to complete the internal energy market by 2014, adds further impetus to the project.
The UK is part of the France-UK-Ireland (FUI) region. As the lead regulator of this initiative, we work closely with other National Regulatory Authorities (NRAs), member state representatives and Transmission System Operators to identify specific barriers or distortions to trade and introduce practical improvements that will contribute to removing them.
A key priority for the region is the implementation of the CACM FG Target Model for electricity, which sets out the vision for intraday, day-ahead and long-term trading, cross-border balancing and capacity calculation.
The Electricity Regional Initiatives also cover interconnection. Four interconnectors with the UK currently exist, connecting Britain with France, the Netherlands, the Republic of Ireland, and Northern Ireland, with an overall capacity of 4 GW. Additional interconnectors with France, Belgium and Norway have also been proposed.