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Lack of power market transparency documented
1 June 2007
Only 14% of the EU's most important electricity interconnectors are operated on a transparent market basis, says market analyst Datamonitor. Without reforms, any new investment in European interconnection will not help meet the EU's goal of an open, pan-European energy market, it says, echoing arguments put forward by the European Wind Energy Association (EWEA). Without fair access to the grid, EU goals for wind power cannot be met, says EWEA. Datamonitor points out that in an open and fair market, the price obtained for auctioned interconnector capacity should be expected to respond to the price of power in the interconnected markets. But only five of the 35 major interconnectors across Europe show a consistent relationship between the price of power in the markets and the volume and price of interconnection capacity, it says. Moreover, the EUR 6 billion of investment needed in new cross-border infrastructure identified by the European Commission is unlikely to be met, warns Datamonitor's Anton Krawchenko. "The fact is, vertically integrated utilities have very little incentive to expand an important source of cross-border competition," he says. This point has long been argued by EWEA, which frequently points out that lack of cross-border links, the existence of dominant, integrated utilities and biased grid operators are preventing technologies like wind from entering the market.
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