Abstract
In the first of a series of four articles covering the expanding market for electrical interconnections in Europe, Jean-Baptiste Vaujour at the Emlyon Business School sets the scene by presenting the main points and current developments around the difficulties of building and financing these assets. Interconnectors allow power to be sent across borders to meet the shortfall where supply is not meeting demand. For example, European electricity markets need to be able to send solar production from Spain and Italy to the Netherlands and Denmark, should offshore wind production in the North Sea fall short. Interconnectors are extremely expensive to build and complex to integrate into the system. But they are of vital importance in an era when intermittent renewables are growing and fossil fuels are in decline. And investment and construction must be timely and coordinated: the recently opened Viking link interconnector between Denmark and the UK has 1,400 MW nominal capacity but can currently only deliver 800 MW because the Danish TSO needs to reinforce the network that spans all the way to Germany to avoid congestion problems. Future articles will cover the example of a privately-financed interconnector (Eleclink), the public incentives to foster investments in interconnectors, and the role of the Joint Allocation Operator (JOA).