Electricity interconnections insufficient, huge task for IPTO

Certain EU member states may be reacting against a European Commission objective  calling for interconnections to represent 15 percent of Europe’s electricity network, but this EU policy stands as a key factor in an overall effort to bolster energy security, enable further renewable energy penetration, as well as the liberalization of EU electricity markets.

Though Greece was not pointed out in a recent Euractiv study, the Greek market is among the EU markets that are lagging behind on interconnection target matters.

The European Commission believes EU member states, operators and regulators need to take immediate action if one of three specific conditions are not being fulfilled.

Firstly, member states need to aim for the minimization of electricity wholesale price discrepancies. According to the European Commission, the development of new interconnections or reinforcement of existing ones needs to be made a priority in cases where regional price differences exceed a limit of 2 euros per MWh. Emergency measures need to be taken if price differences exceed this limit, according to the European Commission.

Secondly, member states must ensure that peak demand is covered under all conditions through combinations of domestic electricity generation and imports. If the capacity of local interconnections represents less than 30 percent of peak demand then alternatives for interconnection upgrades need to be considered.

Thirdly, further RES penetration in markets must not be inhibited by a lack of electricity export activity. RES production by member states must be able to be utilized by fellow member states. If the overall interconnection capacity of respective member states is less than 30 percent of their installed RES capacity then plans for interconnection boosts need to be examined.

At present, Greece does not meet at least two of these three criteria. The country’s electricity wholesale price discrepancy in the day-ahead market exceeds 2 euros per MWh, while the country’s interconnection capacity measures less than 30 percent of peak demand. It is debatable whether the RES-related criterion is fulfilled.

Taking these factors into consideration, IPTO, the power grid operator, faces a huge challenge. Besides needing to invest in the country’s island interconnections, the operator must also make plans to upgrade transboundary international interconnections.

The Greek-Bulgarian electricity interconnection has already been classified as a Project of Common Interest (PCI), which will enable EU funding. This status may also need to be achieved for other projects if Greece is to be taken off the list of EU member states not meeting electricity interconnection targets.