The Status of Power TSO Development in Europe

Table of Contents

• DATAMONITOR VIEW
  • CATALYST
  • EU energy liberalization and increasing inter-regional power trade are the major challenges facing transmission system operators
  • SUMMARY
• ANALYSIS
  • Multi-regional cooperation will increase, yet transmission systems will retain their national identity
    • Congestion management is the single most important operational issue facing TSOs
    • Grid interconnection systems are used to enhance congestion management
    • Inter-TSO linkages will increase, but will maintain their separate identities
    • The Nordic region has achieved a high level of network harmonization
  • Vertically integrated utilities have no incentive to divest their network assets
    • The relative high profitability of TSO subsidiaries will be a strong disincentive to divest by the vertically integrated utilities
    • Ownership unbundling would have the highest impact on German and Austrian vertically integrated utilities
    • In the US, independent TSOs have merged into Regional Transmission Organizations
    • The RTO model is inconsistent with the goal of full market liberalization
  • Despite EU legislation, TSO independence is unresolved
    • EU energy policies seek to open grid networks to competition
    • EU legislation has consistently focused on stimulating electricity network competition
    • Structural network unbundling is the major catalyst for grid network reform
    • Full ownership unbundling is already common across Europe
  • Electricity transmission systems are key in achieving overall European power market liberalization
    • The Transmission system operator is the link between power supply and demand
    • Ownership and control of grid networks vary across Europe
    • Ownership and control of grid networks vary across Europe
    • TSOs belonging to vertically integrated utilities play little or no role in organized wholesale power markets
    • The models employed to regulate TSO tariffs by regulators are hardly uniform
• APPENDIX
  • Definitions
  • Methodology
  • Further reading
  • Datamonitor Consultancy
  • Ask the Analyst
  • Disclaimer
  • List of Figures
    • Figure 1: European TSO organizations
    • Figure 2: 2005 Return on Assets
    • Figure 3: EU legislation has consistently focused on simulating electricity network competition
    • Figure 4: Transmission grid system independence
    • Figure 5: TSO ownership structure - Part I
    • Figure 6: TSO ownership structure - Part II