Just how much is enough? EU regulation of capacity and reliability margins on electricity interconnectors

Abstract

The European Union seeks to establish an Energy Union comprising an internal electricity market. The establishment of an integrated market at EU level requires both investment in necessary cross-border interconnectors and the optimal utilisation of existing interconnectors, where the latter utilisation of existing cross-border EU infrastructure currently appears to be surprisingly low. The overall objective of this article is to analyse how the calculation of capacity and reliability margins on interconnectors is regulated at EU level in order to achieve the establishment of an integrated Energy Union. On the basis of the fundamental non-discrimination requirements and prohibitions against abuse of a dominant position in EU law, we analyse the specific EU energy secondary legislation governing reliability management in transmission systems, including the detailed provisions in relevant network codes. We conclude that the comprehensive and complex secondary legislation still leaves considerable room for interpretation and discretion. We therefore question whether efficient enforcement of fundamental principles such as non-discrimination requirements will remain a more pressing need than developing an even more detailed regulatory framework in the continuous efforts to build an integrated Energy Union.