Why Interconnection Matters
The EU aims for a fully interconnected electricity system – a true European energy union. By 2030, Europe faces an estimated 88 GW cross-border electricity transmission capacity gap, meaning that additional cross-border capacity is required to facilitate the EU reaching its goals. Closing it requires rapid action from the industry, investors, manufacturer supply chains and regulators.
Across the agenda, the EU is prioritising strengthened energy security, increased competitiveness and the energy transition. A flexible and resilient electricity system underpins progress in all three dimensions. Interconnectors, which physically connect national electricity grids and ensure cross-border power flows, are key enablers.
The Role of Interconnector Transmission System Operators
Interconnectors and Interconnector TSOs help create a more balanced and efficient European energy system. By moving electricity across borders, particularly renewable electricity, they increase system flexibility, strengthen security of supply and help ensure that households, essential services and industries have reliable access to electricity. By connecting markets and grid areas, interconnectors also reduce the risk of valuable renewable energy being wasted.
Unrecognized potential
Despite their growing importance for Europe's energy transition, Interconnector TSOs operate under a regulatory framework primarily designed for traditional control area TSOs. As a result, the unique role they play within the electricity system isn’t always recognised.
Unlike control area TSOs, Interconnector TSOs do not operate a control area, have and serve end customers or collect network tariffs. Interconnector TSOs are specialised entities focused on developing and operating cross-border infrastructure that connects electricity markets and AC grid areas. Their primary source of revenue is congestion income, a substantial share of which is ring-fenced for reinvestment in the European electricity system.
This specialised role also gives Interconnector TSOs distinct advantages. As privately owned companies, they can often move more quickly from decision to implementation, enabling timely investment in new interconnection capacity. However, the current regulatory framework does not adequately reflect these differences and creates uncertainty that delays investments.
To fully utilise the potential of Interconnector TSOs and help close Europe's interconnection gap, the regulatory framework must provide greater predictability and be better tailored to the specific conditions under which they operate. This would support faster investment in cross-border infrastructure, unlock additional transmission capacity and strengthen Europe's security, competitiveness and energy transition.
Strengthened Security
Energy supply has become a security issue. War, geopolitical uncertainty and attacks on energy infrastructure show how closely electricity supply is linked to national and regional resilience. Electricity is essential for almost all societal functions, from healthcare and transport to communication systems and internet services. As global instability grows, safeguarding Europe’s critical infrastructure and ensuring energy availability is criticalvital. The solution: more collaboration through cross-border exchange.
We need a robust and reliable electricity system where multiple countries work together to ensure there are options when things go wrong. Reduced international integration does not increase security - on the contrary, it can heighten vulnerability in times of crisis and power shortages. Greater interconnection, with electricity flowing across borders, is what strengthens system resilience and helps build a stronger, more secure Europe.
Increased Competitiveness
Electricity is the key to fostering European competitiveness, innovation, industry development and entrepreneurial success. The power system is more than just electricity generation. Electricity trading lowers costs for both households and industry and creates a more balanced market. For Europe’s industries, stable prices are even more crucial – as their high consumption makes them exposed to price volatility. At the same time, the rapid growth of AI is driving demand for data centres and the need for reliable electricity supply will only increase.
This requires more energy production, but above all stronger interconnections. A truly competitive Europe, with new companies, growing industries, expanding data centres, and increasing electrification, depends on cross-border transmission capacity to ensure a resilient and reliable power system.
Enabled Energy Transition
To ensure long-term sustainability for Europe we need more clean and renewable energy resources. At the same time, electrification and industrial expansion are driving higher electricity demand and requiring stronger grids. However, the intermittent nature of renewable energy – like wind and solar power – increases the need to balance the power system across countries and regions.
Flexibility is key – and that is why both new generation and increased cross-border electricity transmission capacity are needed. It helps prevent supply shortages, meet unexpected demands and allows electricity to flow across borders, ensuring that clean energy is used efficiently throughout Europe. Through more interconnectors, production can take place at the most suitable locations and electricity can flow to where it is needed – without going to waste.
