Interconnectors can contribute to Security of Supply in the European Electricity
Following the experience of recent major blackouts in the US and in Italy, Security of Supply in the electricity market has become a major policy issue. The key question is whether the market will deliver a stable supply of electrical energy or whether market failures or inappropriate market design could lead to insufficient investment, capacity shortfalls and subsequently power outages.
The Tilburg International Conference on Security of Supply in Power Markets addressed exactly this question and attracted industry experts from around Europe. Prof. Richard Green of Birmingham University discussed how markets for generation capacity in addition to markets for electrical energy may serve to ensure sufficient investment into power plants. Prof. Perez-Arriaga of COMILLAS University in Madrid presented alternative options for the design of capacity markets.
Dr. Christoph Riechmann, Director in the Frontier Energy Practice in Cologne and London, explained how investment into cross-border interconnections can enhance security of supply. He alerted the audience to a number of potential inconsistencies in the EU and national regulatory frameworks that could adversely affect the pay-offs of new investment and lead to insuffient investment.
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