Beyond the "Grid-Lock" in Electricity Interconnectors: The Case of Germany and Poland

Lidia Puka and Kacper Szulecki

No 1378, Discussion Papers of DIW Berlin from DIW Berlin, German Institute for Economic Research

Abstract: The common European electricity market requires both market integration and transmission grid expansion, including trans-border interconnectors. Although the benefits of increased interconnectivity are widely acknowledged, expansion of interconnectors is often very slow. This paper gathers insights on the reasons behind this “grid-lock” drawing on the study of the German-Polish border. Although two interconnectors already exist, the trade is blocked by unplanned electricity loop flows. A third interconnector has been discussed for years, but saw little progress in spite of declarations of support on both sides. Drawing on the existing literature on the topic of grid expansion we identify four hypotheses for the grid-lock: inadequate financing; diverging interests; governance and administration problems; and different actors’ motivations, trust and security perceptions. We evaluate them using the empirical material gathered through document analysis and stakeholder interviews conducted in Germany and Poland. None of the hypotheses on its own can explain the “gridlock”. However, while financing has not been a major obstacle, divergent interests had an impact on the project delay, administrative and governance problems are a great hindrance on the technical level, while motivations influence interstate political relations and policy shaping. EU support and closer bilateral cooperation provide opportunities to address these challenges.

Keywords: Electricity interconnectors; the European Union; loop-flows (search for similar items in EconPapers)
JEL-codes: N7 N74 Q4 Q48 (search for similar items in EconPapers)
Pages: 37 p.
Date: 2014
New Economics Papers: this item is included in nep-ene and nep-ppm
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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