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The European Union is aiming for a 鈥溾�� (See the energy winter package of 2016 鈥溾��). That entails more and more member states being connected by cross-border power lines so electricity can be traded as freely as possible, without physical constraints.

The more interconnections between countries can reduce the need for investment in peak generation capacity and cut generation costs, saving consumers between .

In principal, European power markets are energy-only markets in which power producers are paid for the electricity they generate. In an integrated market, power producers in Denmark should be able to sell to suppliers in Italy, with transmission grid operators making it possible to transport the electricity across Europe.

The EU also aims to get more of its power from renewables, and says an integrated market can of volatile wind and solar power generation on the grid, simply because the weather varies across the continent. (A recent study on behalf of the Commission even pondered the idea of s via a direct-current powerline in order to balance out renewable power supply and demand.)

But electricity can only be traded freely across borders to the extent that interconnectors have the capacity to carry it.

Integrated power market targets

The European Council has set targets for member states鈥� grids:

• Every member state is to install cross-border power connections with a capacity equalling at least of their installed electricity production by 2020
• Every member state must of its to pan-European power trade (this is a negotiating position of the Council, s).

Germany has more interconnectors than any other country in Europe, but . The German government that it has ten more cross-border power lines in the planning stages. Other countries are short of the targets too, particularly in , where some are further behind on interconnector capacity than Germany.

Cross-border power gains momentum

is an initiative whereby 19 European countries, including Germany can already, subject to interconnector availability, trade power across borders. Cross-border day-ahead power trading is increased up to the capacity of the interconnectors available, or until a common market price is reached.

In 2015, 鈥溾�� (Belgium, the Netherlands, Luxembourg, France, Germany, Austria, Switzerland, Norway, Sweden, Denmark, Poland, and the Czech Republic) agreed to 鈥渇urther reinforce the grids and [鈥�] not restrict the cross-border electricity exchange, even in times of electricity scarcity鈥�.

Some countries have already reached the highest level of integration. The most prominent example is the Germany-Austria-Luxembourg common power price-bidding zone. The power price for all three countries is set at a common electricity exchange (). For Germany and Austria, this means that a trader in Vienna pays as much for German power as one based in Hamburg.

However, bottlenecks in 骋别谤尘补苍测鈥檚 internal north-south transmission grid are causing problems for further integration of power markets. Already, the grid cannot physically deliver the volume of power being traded. And 骋别谤尘补苍测鈥檚 neighbours are complaining about destabilising loop-flows, as congestion in the German grid forces power into those of neighbouring countries, and about blockages at the borders.

The European Commission is putting pressure on the German government and the country鈥檚 transmission system operators (TSO) to fix the problem, but grid development in Germany is fraught with objections and delays. 聽[See Dossier 鈥淓nergiewende hinges on unblocking the power grid鈥漖.

Splitting the bidding zone

Only a fraction of 骋别谤尘补苍测鈥檚 interconnector capacity () is used for international trade. Although Austrian power traders are keen to buy cheap wind power from northern Germany, congestion in the German grid means the TSOs often have to take expensive re-dispatch measures to supply the power while interconnectors lie idle.

鈥淕ermany is currently pushing its towards the borders, and we have to do something about that,鈥� Klaus-Dieter Borchardt, director of the , told the 暗网福利app.

To address these problems, in 2017 the European Commission threatened to split the German power market into two bidding zones. This would have pushed wholesale power prices in southern Germany up by around 11 euros per megawatt-hour (to a similar level of the ) while prices in the northern Germany remained at their current level of 33 euros per megawatt-hour (), according to Jochen Homann, head of 骋别谤尘补苍测鈥檚 Federal Network Agency (Bundesnetzagentur).

The German government objected strongly, leading to a compromise in which the price-zone will instead split along the German-Austrian border. This will come into effect in autumn 2018, giving Germany some time to build the necessary north-south power connectors to alleviate the bottleneck issues. But Borchardt said that, as a last resort, the Commission could split the German market, if the infrastructure is not in place around 2025, as planned.

骋别谤尘补苍测鈥檚 states that the governing parties want to 鈥渁dhere to the target of a single power bidding zone in Germany鈥�.

Under construction

But 骋别谤尘补苍测鈥檚 electrical neighbours are getting restless.

In March 2018, the opened an investigation that German grid operator TenneT wasn鈥檛 giving them enough access to the power connection between the two countries, preventing them from exporting renewable power.

and , meanwhile, have installed so called phase-shifters at their borders with Germany to prevent loop flows of northern German power meant for Bavaria and Austria flooding their networks.

Jochen Homann from the Federal Network Agency doesn鈥檛 appreciate the pressure and criticism Germany gets from its neighbours and the Commission.

鈥湷冶鸢�尘补苍测鈥檚 energy transition, which is now causing us grid problems and additional costs, has pushed down prices for electricity for the whole of Europe,鈥� Homann said at a BDEW grid in March. 鈥淥ne could also consider whether if it is fair to let Germany alone bear the costs.鈥�

Bilaterally, Germany is increasing its cross-border power exchange capacity. TenneT is building a 516-kilometre, 1,400-megawatt (MW) undersea cable 鈥� 鈥� to transport German power to and from Norwegian hydropower storage facilities by 2020.

Grid operator Amprion in North Rhine-Westphalia and its Belgian counterpart Elia are planning the first power line direclty connecting . The 1,000-MW high-voltage direct-current line is also slated for completion in 2020.

A robust solution

Most experts agree that an interconnected European power system is the way forward, even if it means refurbishing and expanding the existing grid system. 聽

鈥淩unning a system with a very high share of fluctuating renewables is only possible as part of an interconnected system 鈥� the examples of Denmark and Germany show this,鈥� Jochen Kreusel, head of the Market Innovation of the Power Grids Division at , one of the world鈥檚 biggest suppliers of聽products and solutions for power systems and grid management software, told the 暗网福利app.

Borchardt of the European Commission said one of the advantages of a single European power market was that countries would not have to provide their own complete theoretical load at all times. Countries aiming to supply and consume all their own power 鈥渨ould be the most expensive solution imaginable,鈥� he told the 暗网福利app.

Oliver Br眉ckl, professor for electric and information technology at , admits that high-voltage transmission lines across the continent are at odds with the kind of power system many hope the transition to renewables will bring. 鈥淭he idea is in conflict with the goal of a local, decentralised energy transition,鈥� he told the 暗网福利app. 鈥淏ut we had such small island grids 120 years ago and people realised very quickly that this was expensive and that the system becomes more robust when there are more interconnections.鈥�