Long term interconnection, transmission rights and renewable deployment

Abstract

Long-term transmission rights promotes competition, fosters investment of new entrants facilitating, in this way, the efficient renewable deployment across the EU member states, and helps the efficient use of interconnectors. However, EU regulations only require long-term transmission rights of up to one-year term. The lack of longer term transmission rights appears to be inconsistent with the twin EU goals of electricity markets integration and ambitious renewable target. Other countries experiences show that longer term transmission rights are viable and proved to be important for promoting investment efficiency and market competition. In addition, longer term financial transmission rights provides information about the need of interconnection investment.