Benchmark of electricity transmission tariffs in the countries of the internal electricity market of the European Union

Abstract

The purpose of this paper is to examine the implications that the current structure of transmission tariffs in the 17 countries that participate in the Internal Electricity Market (IEM) of the European Union have on the design of cross-border tarification schemes in this regional market. These schemes will be based on compensatory mechanisms between countries, because of the costs incurred by international trade, and some degree of tariff harmonization. The paper describes and compares the transmission tariffs applied in each one of these countries for some representative case examples. The driving factors that may explain the different levels in the transmission tariffs are examined. Finally, regulatory recommendations regarding transmission tariff harmonization and the compensatory mechanisms to be implemented in the IEM are provided.