Consolidating Europe’s electricity market

Resolutely committed to the construction of a robust electricity system based on solidarity

Background

The European Union supports the setting up of a single market in order to strengthen and control Europe’s electricity system. Its architecture has been designed so that the participants (transmission system operators, power generation companies, distributors, electricity exchanges, etc) can trade, optimise their portfolio, manage the risks, plan their positions ahead, etc. To put it in a nutshell: operate the power plants and grids effectively for consumers. As the French transmission system operator, RTE is in charge of implementing the technical and economic mechanisms of this market along with its European counterparts.

Providing a physical framework for the European electricity market

This first of all involves providing a physical exchange framework by developing cross-border connections and guaranteeing their performance. France already has 48 cross-border connections and RTE manages several projects for new lines.

The first large-scale project will be operational in 2015: the new interconnection line between France and Spain, to the east of the Pyrenees. This new direct current line stretching over 65 km, built entirely underground, constitutes a technological first in several regards. The line will double interconnection capacity between the two countries, improve security of supply and optimise use of extensive Iberian wind power generation. Joint implementation of these works with our Spanish counterpart, REE, has resulted in the setting up of a joint venture company (INELFE).

With our Italian counterpart TERNA, in 2013, we launched the worksite for the Savoie-Piémont line, 119 km of direct current connection, entirely built underground. The aim is to provide a sustainable solution to the saturation of trading capacities between France and Italy. As of 2019, this new line and improvement of the existing grid will increase current interconnection capacities by 60%.

Several other cross-border connection projects are currently being studied or implemented with the UK, with Spain in the Bay of Biscay, with the Benelux countries as well as Germany and with Switzerland.

Driving market coupling to open up the grids

On a daily basis, RTE guarantees its customers open, fair and non-discriminatory access to cross-border electricity trading, to its customers based on an auction system for awarding the capacities available to its interconnections. In order to further free up exchanges between European countries, the system needs the national electricity markets to be opened up. This is the aim of progressive deployment market coupling. The purpose is to facilitate alignment of the prices in the coupled geographical zone and optimise use of interconnection capacities. This mechanism is jointly implemented by the transmission system operators and the power exchanges.

2014 saw a significant stage in the process being completed with the extension of coupling of the central and western European zone (France, Germany and the Benelux countries) to Great Britain and the Scandinavian countries. Henceforth, daily transactions (allocation of capacities, prices, etc) and means of generation are coupled to a zone which accounts for 75% of Europe’s electricity consumption. This initiative involved cooperation from 13 transmission system operators, including RTE and 4 power exchanges, requiring testing for 10 months. The next step - Switzerland.

Adopting shared management rules

Reinforced cooperation between RTE and the other European transmission system operators is based on the standardisation of the electricity grid management rules within the member states of the European Union. This is the purpose of the grid codes, which govern the electricity market, connection of power generation companies to the electricity grid and its operation. These codes aim to instil conditions fostering the development of a competitive, safe and sustainable electricity sector. At the request of the European Commission and the Agency for the Cooperation of Energy Regulators (ACER), ENTSO-E draws up the draft code within a year by working with the different stakeholders. ACER then has three months to issue a formal opinion. If ACER recommends the adoption of the code to the European Commission, it submits it to the regulatory committee procedure. The text thus becomes a requirement with direct application for all the member states of the European Union.

Coordinating security of supply with the other transmission system operators

In the same way as the other transmission system operators, RTE sees to supply and demand balance within its territory, and therefore security of supply. Within the context of a single market, this requires coordination to ensure that the commercial exchanges remain compatible with system safety. It is based on a simple principle: managing electricity flows on the respective grids so that supply (generation + imports) strictly matches demand (consumption + exports) at any time. Since 2009, the technical coordination centre, Coreso, which groups together the transmission system operators from 5 countries, including RTE, successfully ensures this coordination.

Tomorrow, development of the smart grids, will provide the level of flexibility and interactivity required to complete the setting up of Europe’s electricity market.

Upkeep of security of supply also constitutes a major priority of our European research programmes.

 

KEY POINTS

  1. 1

    ENTSO-E is composed of 34 countries and 41 interconnected national transmission system operators including, 48 cross-border connections in France, 38 of which are located at 6 borders for import and export

  2. 2

    300,000 km of lines operating at the same frequency (50 Hz)

  3. 3

    600 million inhabitants supplied

  1. 53,000 km

    New high voltage lines to be planned in Europe over the next 10 years according to the ten-year European network development plan mainly focused on the integration and optimisation of renewable energy generation – an investment of 104 billion Euros.

  2. 60 %

    Increase in cross-border electricity trade capacities between France and Italy once the new cross-border Savoie-Piémont connection has been completed in 2019.

The France-Spain interconnection

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Key facts

  • An interconnected Europe

    Every day, at every border, France imports and exports electricity. Due to their increasing demand, and their high levels of saturation, our cross-border links are subject to a large development plan.

A more in-depth view

Providing a framework for cooperation between European transmission system operators

Coreso: a technical centre coordinating security of supply

Based in Brussels, Coreso (Coordination of electrical system operators) is the operational coordination centre for electricity grids in the central and western European coupling zone. Set up in 2009 by five European TSOs, Coreso sees to operational safety of the electricity system and contributes to the integration of renewable energies from France, Belgium, Great Britain, Italy and northern and western Germany.

24 hours a day, 7 days a week, RTE, Elia (Belgium), the National Grid (UK), Terna (Italy) and 50 hertz (Germany) operators coordinate with each other to increase security of electricity supply based on in-depth analyses conducted prior to real time.

Based on the overview of electricity flows in the zone concerned, Coreso enhances the sharing of information between the national transmission system operators. It is also developing a new approach to improving electricity system safety, mainly by conducting safety and monitoring analyses additional to those carried out at national level. Lastly, Coreso designs a coordinated response to deal with the contingencies arising on the grid as effectively as possible.

ENTSO-E: identifying all future needs

Building the European market and successfully managing energy transition, are also based on forward planning and innovation. This is the remit of ENTSO-E (European Network of Transmission System Operators for Electricity), which we set up with 41 transmission system operators from 34 countries. Its role is to pool our expertise and rally round national aims for study and action on the European scale.

ENTSO-E was assigned 3 major projects: drafting of the grid codes, publication of the ten year network development plan and implementation of the European R&D plan. 

As the operator of Europe’s largest transmission grid, we make an essential contribution, mainly due to our capacity for long-term prospects and our innovative strength.

The works jointly carried out with our European partners have enabled ENTSO-E to identify, in its ten year network development plan, the need to build 53,000 kilometres of new high voltage connections. This investment, estimated at more than 100 billion Euros, is mostly dedicated to renewable energies.

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