What are Cross-Border Interconnectors?

Definition

To turn national electricity grids into a large European electricity market, the various national transmission system operators (TSOs) need transit capacity for cross-border electricity trade. These border connection points, also called cross-border interconnectors, enable TSOs at international level to transfer electricity from one national grid to another. Only cross-border interconnectors can turn on-balance-sheet electricity trading into real, physical electricity deliveries. Their expansion is therefore a central starting point of the European Commission's electricity market policy and the implementation of the integrated European energy market.

The European Electricity Grid and its Cross-Border Interconnectors

Until the middle of the 20th century, electricity grids were a strictly national affair -with countless different grid systems and grid frequencies. A patchwork of isolated solutions that made cross-border electricity exchange impossible dominated the European electricity system. The networks in the different European countries had different infrastructures, voltage levels and frequencies that made simply coupling them difficult. Grid, voltage and frequency must be identical in order to ensure smooth cooperation - the technical term for this is synchronous operation.

To enable synchronous operation in Europe, a Central European organization was founded in 1951 in order to coordinate the interconnected grid area of Belgium, Germany, France, Italy, Luxembourg, the Netherlands, Austria, and Switzerland. This Union pour la coordination de la production et du transport de l'électricité (UCPTE) was expanded in 1987 to include Greece, Yugoslavia, Spain, and Portugal, and since 1995 also the Czech Republic, Slovakia, Poland, and Hungary. Due to the liberalization of the European electricity market in 1999, the UCPTE transformed into the successor organization Union for the Co-ordination of Transmission of Electricity (UCTE).

The countries of the UCPTE and UCTE made clear agreements on their grid design: they transmit electrical energy across borders as three-phase alternating current via high-voltage lines with 220 to 440 kilovolts and a grid frequency of 50 hertz; a more recent development are high-voltage direct current transmission lines (HVDC transmission lines).
The European Interconnected System (EV) thus created enables the cross-border exchange of electricity and can ensure the security of supply and stability of each individual member country and provides possibilities for electricity imports and exports.

Border Interconnection Points as the Backbone and Bottleneck of the European Interconnected Network

In order to exchange electricity between the transmission grids of two countries, these countries must set up so-called cross-border interconnectors. These are, in the case of three-phase alternating current high-voltage lines, visually indistinguishable from normal high-voltage lines - only that they cross the borders of two countries and the shape and design of the masts sometimes change behind the borderline. To transport electricity in HVDC transmission lines, however, special facilities have to be built because the electricity first has to be rectified for transport in the cable and then rectified again for feeding into the grid. However, these measures are also necessary for HVDC transmission lines that do not cross national borders.

Cross-border interconnection points are nodes in the Continental European Interconnected System (EV) and should enable the smoothest possible border traffic of electricity from one country to another. However, the expansion of existing capacities and the construction of new cross-border interconnectors is very costly in financial and administrative terms. New high- and extra-high-voltage lines have to be laid in partly densely populated areas, and neighboring countries have to agree on how to bear the costs. Efforts towards a fully integrated electricity grid are coordinated centrally by the European Commission's TEN-E (Trans-European energy networks policy) regulation, which also envisages projects beyond the UCTE member states, for example with Great Britain and the Baltic States.

Negative Effects of Insufficient Cross-Border Interconnection Capacities

However, there is no real alternative to increasing cross-border electricity transmission capacity. Just like at a motorway border crossing where vehicles gather in long queues at peak times, the capacity of the border interconnectors is limited - the lack of transport capacity means that the electricity cannot flow in the quantity that is required under contractual agreements.

On the contrary, if more electricity is sold on the exchange than can actually be delivered, several unfavorable effects occur. One of these is market distortion: the difference between contracted and actually physically delivered electricity must be offset.

Loop flows are a concrete grid-related problem. Here, too, the metaphor of a motorway border crossing is useful: if the crossing is overloaded, the vehicles swerve to the surrounding country roads and clog the cross-town thoroughfares. Similarly, electricity also follows the principle of least resistance (Kirchhoff's laws) and uses the network capacity of other countries. This was the case, for example, between Germany and Austria until 2018: because the electricity there could not pass through the undersized border interconnectors, it diverted to the neighboring countries of Poland and the Czech Republic and caused annoying costs there - a major reason for the eventual separation of the common electricity price zone of Germany and Austria.

Seasonal Load Fluctuations at the Cross-Border Interconnectors

The image of the motorway border crossing is applicable to the seasonal utilization of the border interconnection points again. During the holiday season, there is a huge rush, and in November, which is not very holiday-friendly, less vehicles want to cross. The situation is very similar at the border interconnection points: here, the "travel demand" also depends on the national energy infrastructure, the volume of cross-border electricity trading and, last but not least, on the weather. Thus, meteorological factors have a direct impact on border traffic - for example, on cold winter days at the border interconnection points to and from France. The country relies primarily on nuclear energy and heats houses and apartments with electricity. This pushes nuclear power plants to the limits of their capacity in winter - France must increasingly import electricity from neighboring countries.

Seasonal and Diurnal Cross-Border Traffic of Electricity in the Alpine Region

The Alpine countries also have a seasonally strong fluctuating electricity demand, which has an impact on cross-border electricity exchange: During the snowmelt in spring and early summer, Austria and Switzerland export electricity to the rest of Europe, while in the winter months the countries in the Alpine region import electricity. In summer, a regular interplay has developed between the so-called solar belt of Baden-Wuerttemberg and Bavaria and the Alpine countries on a daily basis: While on a sunny day, electricity flows from German solar panels into the Austrian and Swiss grids during the day, at night they supply electricity from hydropower to the lightless solar regions.

Since little will change in the near future regarding the problem of insufficient capacities of the border interconnection points, the European states of the grid network are called upon to use the existing capacities as efficiently as possible. This is currently taking place primarily in the so-called Central European Market Coupling (CWE Market Coupling), which optimally uses the transmission capacities between two markets through cooperation between the national electricity trading centers and the TSOs.

Market Coupling of Day-Ahead-Markets in Europe
The countries colored green exchange information according to the rules of market coupling, thus optimizing the capacity of their power grids and border interconnection points.

This system called PCR (Price Coupling of Regions) enables 19 European countries to interconnect their markets via interconnection points, taking into account the lack of transport capacity and local network characteristics. The exchange between the electricity markets of the member states takes place automatically between the electricity exchanges, which calculate the optimum use of transmission capacities in a coordinated procedure and thus contribute to the ever-closer alignment of electricity prices in the European countries.

The flow-based market coupling (FBMC) and especially the XBID system for intraday trading were developed to support the PCR. With the latter, cross-border intraday trading between Austria, Belgium, Denmark, Estonia, Finland, France, Germany, Latvia, Lithuania, Norway, the Netherlands, Portugal, Spain, Sweden, and Estonia has been possible since 12 June 2018. The increasing harmonization of European energy markets is progressively encouraging flexibility at national level, which can be used for cross-border trading.

Overview of Major Cross-Border Projects at European Level

Throughout Europe, major projects are under construction that will enable intercountry electricity exchange even across the sea or mountainous regions. For example, the "Nemo Link" submarine cable between Belgium and Great Britain recently went into operation, transporting 1000 MW of power via HVDC (high-voltage direct current) transmission between the British Isles and continental Europe. A similar link already exists with the Netherlands, and a submarine cable between Great Britain and France enables the exchange of 2000 MW.

As described above, the European Commission is monitoring and promoting current progress in the expansion of cross-border interconnection capacities within the framework of the TEN-E Regulation. According to a Commission report, 22 projects for the electricity sector were completed by the end of 2018, 31 will be completed by 2020 and 106 projects are on the long list.

Selection of European Projects on Electricity Market Integration and Expansion of Cross-Border Interconnectors

BEMIP (Baltic Energy Market Integration Plan)

Significant projects here are the completed HVDC transmission projects "North Baltic" between Lithuania and Sweden (700 MW) and the Litpol link between Lithuania and Poland (500 MW), which ended the energy isolation of the Baltic States.

INELFE (Interconexión Eléctrica Francia-España)

An HVDC line between France and Spain (2000 MW) through the Pyrenees has already been in operation since 2014, and the "Biscay Bay Line" through the Bay of Biscay between Cubnezais in France and Gatika in Spain will provide an additional 5000 MW of capacity.

Northern Seas

Regionally optimized connection system between the North Sea riparian states. Great Britain, the Netherlands, Belgium, and Germany are to be connected to the offshore capacities in the central North Sea and the German Bight.

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