The assessment of the 10% interconnection target: security of supply, market integration and CO2 impacts

Abstract

The aims of the present paper are twofold. First, it analyses the applicability of the 10% interconnection indicator with respect to medium/long term security of supply and market integration: Does it accurately consider the SOS situation of the Member States? Does it reflect the level of market integration of the neighbouring Member States/regions? Second, it estimates the effect of full compliance with the 10% interconnection target on EU wide CO2 emissions by 2020. We find that the 10% rule that aims at improving both the security of supply and market integration position of countries fails to do so. It disregards factors that affect security of supply (availability of generating capacities and load) and with respect to market integration the criterion misses the level of analysis i.e. focusing on countries instead of borders.