Reforming cost and benefit sharing to support Europe’s electricity grid expansion

In brief

ACER has published a policy paper on how Europe could improve the sharing of costs and benefits for cross-border electricity infrastructure. The agency argues that major grid investments are needed for a more integrated European electricity market, but the current framework can leave one country bearing most of a project’s costs while other countries receive a large share of the benefits. This imbalance can discourage infrastructure projects that would be valuable at European or regional level.

The paper reviews existing mechanisms such as congestion income distribution, inter-TSO compensation and cross-border cost allocation, noting that gaps and overlaps remain between them. ACER does not propose a final solution, but sets out options ranging from targeted improvements to the current tools, to merging some mechanisms into a single ex-post system, or creating a broader EU-level financing framework for infrastructure used in cross-border electricity trade. The aim is to encourage further discussion and strengthen investment incentives for grids that support Europe’s wider energy transition.

Source: ACER

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