Missing pillars and roadblocks on the path towards an integrated and decarbonised electricity system in Europe

Written by Nicolò Rossetto

The establishment of a seamless electricity transmission system and the completion of a single market for power in Europe are currently hindered by the lack of adequate answers to several, often basic, questions concerning the coordination of actions and decisions, the sharing of costs and benefits, and solidarity beyond costs and benefits.

The absence of these three core ‘pillars’ explains, at least partially, why the European electricity system is affected by numerous critical issues. In some cases, the EU is gradually developing solutions and moving forward. Unfortunately, in others it is not. Diverging prices for electricity and ancillary services, on the one hand, and a slow and expensive transition to a low-carbon energy system, on the other, are the consequences.

In at least two cases, the EU is facing ‘roadblocks’ that have become more and more apparent in recent years. They are:

• Redispatching actions;
• Capacity adequacy and power crisis management.

Intervention in these two areas is imperative and urgent if the EU is serious about the completion of the internal market and its long-term climate targets.

By thinking in terms of coordination mechanisms, sharing principles and solidarity rules, it is possible to suggest a set of recommendations, identifying key roles, tasks and responsibilities both at national and supranational level.

In the new Policy Brief of the Florence School of Regulation, we propose seven of such recommendations. They must be considered as preliminary to any detailed decision that technical and regulatory bodies can take at a later stage.

Member States, industry stakeholders and society at large can have alternative and even opposing views of these suggestions. Depending on their understanding of the problems, their vision and interests, they can push for different ways to successfully confront the two roadblocks represented by redispatching actions and capacity adequacy and crisis management. However, while developing their proposals and discussing the Winter Package of the European Commission, they should all acknowledge the necessity to deal with the missing pillars and provide explicit and coherent answers to the long overdue issues of coordination, sharing and solidarity.

The interested reader may dig deeper in our ideas by looking at our full Research Report.