National and business interests have a negative influence in electricity transmission network in Europe. As a result, needed levels of investments in transmission networks are lacking.
The doctoral dissertation of M. Sc. Matti Supponen on this subject will be presented for public examination and debate at Aalto University School of Electrical Engineering in Finland at 12 noon on Monday 31 October. This is the first European-wide study on the subject.
- Companies with both Transmission System Operators (TSO) and electricity production activities tend to optimise their transmission network investments with their own interests in mind, not the overall benefits, says Supponen.
Countries often assess such investments based on the benefits reaped by their own industries, with little regard to overall benefits for Europe. Supponen claims that one billion euros is lost every year compared to a transmission network optimised for the European economy, and this figure will grow.
As a result of the liberation of the electricity market and development of wind power, building transmission networks has emerged as a challenge for Europe. In order to achieve targets set for renewable energies, there are plans to build wind power capacity to the extent that the ensuing transmission needs will exceed all previous requirements manyfold.
- Countries must work together to be able to distribute wind energy over an adequately large area, argues Supponen.
- If the targets for building transmission networks are not met, it may become impossible to connect power stations to the network on time. This may lead to a situation where they will not be able to operate on full capacity due to transmission network bottlenecks, he adds.
For his dissertation, Supponen has also examined how European countries and TSOs have responded to the challenge of transmission network construction. Finland is one of the countries that have continuously been able to invest in transmission networks and to efficiently interconnect its electricity market to markets in other Nordic countries.
The research method is based on analysing the potential to exploit electricity price divergence and examining transmission network investments. The dissertation contains proposals for toning down the impacts of national interests. A key proposal concerns changing the principles of cost allocation in cross-border line investments to better account for the benefits.
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