IEEE Power & Energy Magazine - July/August 2016 - 111

in my view (continued from p. 116)
between cash-in and cash-out flows
would lead to deteriorating key metrics used in defining credit risk and
could therefore put the ability of TSOs
to be financed at risk, thus increasing
the cost of capital. An increased cost
of capital for TSOs would, in turn, result in increased costs for society. The
investment challenge also implies a financing challenge.

The Challenging
Status Quo
If the current transmission regulatory
framework remains without adapting to the present context, the consequences can be serious in terms of
RES deployment, market integration,
and security of supply. Europe would
confront a regret scenario.

ENTSO-E believes the challenging long-term goals of a sustainable,
secure, and competitive European energy system are unlikely to be achieved
if TSO regulatory frameworks are not
adjusted to reflect the new context of
required investments. Europe's electricity industry will find itself in a scenario of regret.
Of course, adapting TSO regulatory frameworks to a context of huge
investment needs will lead to increased
network tariffs in exchange for a larger
net increase in welfare for the European economy. ENTSO-E TyNDP and
regional development plans along with
national investment plans ensure that
grid reinforcements globally increase
the socioeconomic welfare for all EU
countries. It follows that if TSO regula-

tory frameworks are not adapted to the
investment challenges lying ahead, it
will imply a welfare loss.

An ENTSO-E Proposal for
a Regulatory Tool Kit to
Avoid the Regret Scenario
The regulatory framework sets out
the general conditions for TSOs to
run their business. Regulation has a
direct influence on the capability of
TSOs to carry out activities efficiently while properly rewarding shareholders and reimbursing debts as they
mature. Therefore, an adequate design of the TSO regulatory framework
must be at the heart of any sustainable
solution aimed at avoiding the negative outcomes of the described scenario of regret.

Finley provides proven strategies and implementation
plans to take you to the future of energy systems. For
over 60 years, our engineers have taken pride in
designing, engineering, and overseeing construction
of electrical power systems to serve customers in the
21st century.

FinleyUSA.com
july/august 2016

417-682-5531
ieee power & energy magazine

113


http://www.FinleyUSA.com

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